Money
Issue No. 29 - June/July 2006
Top 10 DIY bookkeeping blues revealed – at cost
Outstanding debtor oversights, tax deduction ‘short-changing’ and use of over-complicated software are among the biggest mistakes made by Australian business owners undertaking DIY bookkeeping, according to business software provider, Cashflow Manager.
Cashflow Manager MD Wayne Burgan says heavy workloads and inadequate or inappropriate procedures and systems are forcing business owners into costly mistakes.
“Small business owners are often juggling a variety of tasks from managing staff and business development through to hands on work,” Wayne says.
“Bookkeeping is often the task left in the 'to do' basket until it’s too late, or undertaken at the last minute, increasing the likelihood of mistakes.
“Mistakes or oversights can cost small business owners thousands of dollars, money I am sure they would rather see on their bottom line. They can also expose owners to substantial fines if uncovered in a tax audit.”
High on the list of most common bookkeeping mistakes are deduction claim ‘short-changing’, incorrect GST-related claims and software usage.
Wayne says small business owners often use accounting software that is beyond them, or their needs.
“Some software programs are too complicated for most business owners who don’t understand double entry accounting,” he says.
“As a result, they are effectively left with a virtual ‘shoebox’ packed with information that will either expose them to risk in a tax audit, or require their accountant to spend extra time sorting out — and accountants charge by the hour.
“Australian small business owners often short-change themselves of tax deductions they can rightfully claim. In most cases this is a simple oversight such as not keeping accurate records of cash expenditure.
“Business owners can also fall into the trap of claiming GST deductions when they don’t have valid tax invoices, or the goods...
