Do you make these mistakes in your bookkeeping?
Nov 08, 2022I see you there making these bookkeeping mistakes. After all, bookkeeping is just another thing you have to do in your business right? You don’t have time to spend completing data entry every day, or every week, so you are just attending to it monthly or even quarterly. Well, hard truth, the reason you are making common bookkeeping mistakes is because you are rushing through it to get it done and you’re not paying attention to the detail.
Here are the 3 mistakes rural businesses are making with their bookkeeping:
1. Claiming 10% GST on the whole insurance bill
Did you know that most insurance policies have a stamp duty or levy component that does not attract GST? I see so many people claim 10% on the whole insurance bill and don’t account for the GST free stamp duty amount. When entering the insurance bill into your software, you need to make sure you split the bill into GST line items and GST free line items so the GST amount in the summary matches the GST amount on your insurance policy invoice.
2. Not splitting livestock, wool and cropping sales invoices
Have you ever noticed on your account sale invoice that there is a section for the sale of livestock/wool/crop and then underneath there is a summary of the expenses such as levies, freight, insurance, commission etc? These two sections need to be split out into different line items when entering the sale into your accounting software so that they can be allocated to the correct categories. I see so many people just enter the net amount to the sales account and then they miss the expenses. This also means that the GST amount is usually wrong because there will usually be a GST free levy on the sales invoice!
3. Not separating business and personal spending
Keeping business and personal finances separate at all times is crucial! Keeping track of business expenses and income gets complicated when you start adding personal transactions in the same bank account. If you want to reduce your data entry, avoid headaches during peak times and clearly see an accurate overview of business performance, the first thing you should do is keep personal expenses and income in a separate personal bank account!
Want to outsource your bookkeeping so you don’t have to worry about making these mistakes?
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