It can be tempting, as a sole trader, to undertake the responsibilities of a bookkeeper by yourself. In many ways, this approach could be seen as a way to save some cash and keep the responsibilities in-house. However, as we will discuss, overlooking the benefits of employing a bookkeeper can prove problematic, with the many benefits outweighing the financial burden of taking on an accountant. Whilst the responsibilities of a Sole trader vary depending on the nature of the business, one thing remains consistent; time is an important resource that can be saved through delegation, and the out sourcing of crucial activities such as financial record management. Responsible for maintaining the financial records of the business, a bookkeeper’s primary activities include organising and tracking the day-to-day financial transactions of a company, ensuring the accuracy and completeness of the financial records.
Highlighted below are 5 key reasons why your business will benefit from employing a bookkeeper.
A Bookkeeper can support Compliance with Tax Regulations:
As a sole trader, you are responsible for accurately reporting your income and expenses to comply with tax laws. An accountant can help ensure that you meet all your tax obligations, including the timely filing of tax returns and payment of taxes. They can help you understand the relevant tax deductions and credits available to you, reducing the risk of errors or omissions that could result in penalties or audits. In Australia, failing to comply with business tax can lead to various penalties from the ATO, ranging from a late lodgement fee to Director Penalities, to serious legal action.
A Bookkeeper can help with Saving Time!
Running a business as a sole trader involves various responsibilities, such as managing finances, invoicing, and customer relations. By hiring an accountant, you can delegate the financial tasks to a professional, freeing up your time to focus on core business activities. This allows you to concentrate on growing your business and serving your customers. The productivity and efficiency required for business success relies heavily on time management and delegation, thus opting to hire a bookkeeper can be a crucial and incredibly beneficial decision.
A Bookkeeper can provide expert financial advice
Accountants possess specialized knowledge and expertise in financial matters. They can provide you with valuable advice on various aspects of your business, such as budgeting, cash flow management, and business planning. Whilst your own personal research may prove valuable, the value of hiring an informed and qualified professional is incomparable. Their insights can help you make informed decisions, identify opportunities for growth, and mitigate financial risks.
Support with Record Keeping
Maintaining accurate financial records is crucial for monitoring the financial health of your business. Record keeping can be incredibly complex depending on the scope and scale of your business, and can quickly become incredibly time consuming. An accountant can set up an organized system for recording and categorizing transactions, ensuring that your financial records are accurate and up to date. This makes it easier to track your income, expenses, and profitability, providing a solid foundation for financial analysis and decision-making.
Professional Networking
Accountants often work with a wide range of businesses and professionals. They can introduce you to valuable contacts, such as bankers, attorneys, or other specialists, who can provide additional support or services that are relevant to your business needs. These networking opportunities can open doors to potential partnerships or collaborations that can benefit your sole trader business, setting you up for success and business sustainability.
Remember, while hiring an accountant can offer numerous advantages, it’s essential to find a qualified and experienced professional who understands the specific needs of sole traders. Finding a suitable bookkeeper can be complicated, so it can be useful to utilise professional agencies such as the Certified Practicing Accountants (CPA) Australia or the Institute of Public Accountants (IPA).