The 9 Bookkeeping Issues We Want You to Address in 2022-23

Not everyone is aware of what is wrong in business.

The first time an organization tries to manage finance on its own, it faces hundreds of challenges, and these rollercoaster rides continue until you find a suitable financial partner.

Running a business means always being on top of your cash flow. It is where bookkeeping plays a vital role in helping you make wise business decisions. The best bookkeeping practices include knowing how you track finances and transactions on a daily, weekly, monthly, and quarterly cycle. It provides the most efficient and effective way of keeping track of money coming into your company and money going out of your company.

Small business owners spend more time focusing on business deals, marketing, and managing customer relationships than they do on their finances. The problem, however, is that by failing to prioritize bookkeeping and accounting, they missed opportunities that could have benefited other business processes. 

As a Bookkeeping services provider in Australia, we have come across many small, medium, and large-sized businesses with a constant struggle to resolve discrepancies and inaccuracies in accounts. It’s all due to the neglected accounting and bookkeeping services necessary for their business. 

Our previous blogs also outlined many ways to address major financial issues related to managing finance and accounting in your business. Here in this blog, we address the most specific and common bookkeeping challenges organizations face, recommend solutions, and help you find the right bookkeeper that fits your needs.

The following are the primary bookkeeping challenges in detail, 

1. Maintaining accurate financial records

The first thing professional accountants or bookkeepers do is maintain your books and record transactions. It may involve the implementation of automation of the daily tasks or outsourcing bookkeeping functions to dependable bookkeeping professionals.

The process of bookkeeping involves organizing, tracking, and recording financial transactions, such as income and expenses. This provides crucial information about the business. So, you get timely financial reports, make wise decisions, or build business strategies. Also, accurate bookkeeping improves the quality of this data, so it stands strong with obligatory compliance and regulatory authorities for a secure and smooth business run.

2. Less or no basic accounting knowledge!

Even if you have a great business running for your initial years, and do not think of anyone better qualified than you to handle your financial hurdles. Still, without a practical understanding of business finances, you will face complications in keeping complete, accurate, and valuable records.

As a result, Accounting and Bookkeeping will appear overwhelmed with inaccurate records and encroachments. There have already been many businesses that have failed miserably to organize money properly. Understandably, managing finances and other business services is not something they manage on their own. So, it is best to hire a professional or outsource the functions to a professional company.

3. Poor management of cash flow

Having a positive cash flow is an integral part of a company. Thus, knowing what is flowing out and why it is essential to control a positive cash flow is something most businesses lack, which may be due to the overwhelming financial challenges, fierce competition, or just mishandling of the books. However, a negative cash flow can hurt the overall business finances. Simply, when the incoming cash flow is insufficient to meet the basic needs, it eventually results in exhausted spending, investing, and other control operations.

But professional bookkeepers help you stay on top of your cash flows by focusing on recurring expenses and transactions. As a result, one can identify and track unused equipment, potential issues, and lease options instead of buying them with heavy capital, thus balancing out the cash-in-hand situation.

“According to many surveys, poor cash flow management contributed to the failure of 80% of small businesses.”

4. Inaccurate and untimely reporting

Companies that manage a broader customer base and conduct substantial financial transactions on a daily basis. They may need to generate monthly reports to show investors and shareholders that all company processes are monitored closely and regularly.

However, in most cases, small businesses do not show any interest in this crucial business process of acting on accurate reports. When the income statement is not updated, negative balances may manifest when expenses are incurred, which hurts the company’s reputation when invoices to be paid are neglected.

Hence, the solution is to maintain monthly records of the business and its finances, either by yourself or by hiring professionals to do it for you. It is advised to create financial reports on a quarterly or annual basis.

5. Delayed payables

Another major bookkeeping problem that small businesses face daily is managing their payables. At times, managing these challenges without a good bookkeeper on board can be a daunting task, not just for the larger enterprises but also for SMEs, who have to deal with all kinds of shortfalls in payable work.

Small business owners do not intentionally delay their payables. They merely have a system in place for tracking and paying bills. And aside from that, more significant problems may arise due to delayed payables. But as a start-up, you would not want to establish a reputation for not paying or being late with payments. So, to receive what’s owed to you by your customers, you will need to ensure you are paying what you want to your vendors as well and paying your bills on time is just as critical as collecting invoices.

6. Delayed receivables

Managing receivables is a critical business accounting process to maintain positive cash flow in the organization. Most small business owners easily fall for fake promises supported by a dull invoicing and follow-up system. Getting paid late or not getting paid at all can lead to your firm’s downfall.

Many of you may or may not come up with such issues. But not getting paid for a long time for the work you have invested money and effort into can easily hamper the organization’s stability and reputation among other customers and your employees.

To avoid getting into this cycle. It is necessary to track your receivables and establish effective invoicing habits. You can even hire Bookkeeping firms for automated billing and follow-ups with the best offers. They not only manage your accounts but also consult on future business decisions.

7. Tax preparation and planning

Whenever tax season arrives, a lot of us tend to become quite confused. When planning a tax return, it can be exhausting to keep track of each step of the process and development, causing us to run into tax problems. So many factors need to be considered, so many points need to be reviewed, and so much information needs to be collected.

As a result, most small business owners find tax preparation and planning a complicated process and fail to pay their taxes on time. There are many ways that a skilled bookkeeper can help you with your finances, such as managing missed quarterly estimates, under withholding, missing out on necessary deductions and improper tax filing.

The best tax planning strategy aims to put you in the best financial position possible and avoid such compliance issues. Thus, finding someone who can professionally manage your books and guide you through the taxation process should be a priority for your business.

An effective tax planning strategy focuses on:

  • Reducing your tax-liable income,
  • Increase your deductions.
  • Leverage the lower tax rates for benefits

8. Tracking the expenses

A lack of cash is the most commonly cited issue small businesses face, and not keeping track of expenses has been the most crucial reason for this. We must know that tracking business expenses is a lot more painful without the right tools and the right accounting partner. Such issues require an efficient expense tracking process that can streamline your business’s bookkeeping while eliminating errors and simplifying daily tasks of accurately keeping track of paper receipts and digital invoices, managing reimbursements, and tracking recurring expenses.

When you keep a closer eye on your expenses, tax time will be a lot simpler, as you will be able to avail of the potential deductions and claim expenses as write-offs. It also helps you identify your business’s current financial state, avoid unnecessary expenses, and predict what costs you have coming up. How a bookkeeping firm can help you with expense management.

• Digitize all your receipts, invoices, and expense sheets.

• Use expense management software to categorize and keep your expenses all in one place.

• Have a dedicated business bank account for expenditures.

• Organize and review your business expenses on a monthly, quarterly, and annual basis.

9. Fraud Prevention

Small businesses find it hard to manage all aspects of their accounting departments on their own. However, when they do, they miss out on efficient handling of business accounting and bookkeeping. Overlooking these crucial processes also undermines the overall financial stability, which contributes to recurrent irregularities, discrepancies, internal fraud, and everything that causes you to fall flat on your face in the market.

Bookkeepers for small businesses can help you establish a reliable system of managing your finances and follow a consistency and transparency pattern in your accounting department. Also, having someone managing the books, like a controller, sets up a checks and balances system, runs internal audits regularly, and ensures everything is secure and with appropriate accountability. Some of the most common fraud cases include:

• Payroll schemes

• Cash larceny

• Inventory theft

• Expense reimbursement schemes

• Checks tampering

By choosing the right bookkeeper for your small business, you will be able to solve any bookkeeping challenges, find facts and accuracy in daily business transactions, make well-informed decisions, as well as prevent discrepancies and potential fraud. In some cases, outsourcing a business’s bookkeeping needs also helps companies to focus on other activities of their business while improving the efficiency of their accounting department.

For the best bookkeeping services in Melbourne

Since 2002, Mizael Partners has continued to provide bookkeeping services for businesses. We specialize in ensuring all financial records accurately reflect the position of an individual or organization. 

Mizael Partners can provide the best small business bookkeeping for your business. Our bookkeepers in Melbourne can help you maintain detailed and accurate records of the financial ins and outs of your business, including your current and projected financial standing.

Contact us

To speak to one of our accredited accountants/bookkeepers, please call us at +61 (0) 466 228 000.

Industry Experience

Are you a business located in Ringwood, Bayswater, or Croydon? Looking for business accounting and tax accounting solutions? We would love to help you grow.

some of our happy clients

Don’t just take our word for it. Hear from some of the clients we have had the pleasure of working with.

Our friendly staff are ready to help you. Enquire below for a response within 1 business day.

Please note, we cater to business, corporate and organisational based clients, and unfortunately cannot assist with individual tax returns at this time.

Typical response time: two business hours.

About Mizael Partners

Mizael Partners is proudly run by founding director, Ryan Mizael. Ryan and his team have been providing innovative accounting, auditing, financial advisory, tax and cloud-based technology solutions since 2002.

Why Us?

  • We have a team of experienced chartered accounting professionals.
  • We specialise in accounting services for top companies.
  • We provide a wide range of services tailored to meet your needs.

Call Ryan Mizael at +61 (0)466 228 000 today for a personalised business accounting experience.