It is common in a family for a partner to start their own small business and as that business grows in order to save time and money on bookkeeping fees they delegate the bookkeeping work to their relatives or friends, who usually do not possess the basic bookkeeping skills. The initial costs of such bookkeeping work are very low, as relatives are often willing to do it for free of charge or for little in return charging very low bookkeeping fees.  However, whether the practice of low or no bookkeeping charges saves business money and reduces costs in the long run is at question.

In our practice we have come across several cases where small businesses saving on bookkeeping fees and charges tried to maintain their own books through relatives and friends  who had neither basic bookkeeping knowledge no the time to cope with the demanding business paperwork . Often this resulted in small business enterprises paying penalties to Australian Tax office (ATO),  as well as high bookkeeping fees to tax accountants due to inaccurate bookkeeping records. In the most cases small businesses failed to keep proper and timely financial records, which sometimes lead to maintaining book keeping records more than one year behind.

Due to the fact that the bookkeeping system was not set up properly from the start the small businesses had to pay overdue fines to the Commissioner of Taxation - ATO, as well as general interest charges on underpaid taxes and additional taxes due to unfulfilled requirements of bookkeeping records.

If you have outstanding bookkeeping work, if you do not have basic knowledge in bookkeeping or you are not sure what you are doing please contact us and we will help you and save you money along the way.

Tags: ATO, Bookkeeping fees, Bookkeeping rates and charges, Small business

Date: December 18th, 2009, Friday. Category Bookkeeping essentials, Small Businesses. Comments RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.