Introduction
Starting a business in Brisbane can be an exciting venture. But it also poses quite a challenge — managing business finances. Many startups brush off bookkeeping and accounting in Brisbane for sales, product, or marketing, thinking it’s over-advanced. However, if things are not maintained properly, you can run into cash flow problems, issues with the ATO, and even risk business failure. At Milan Accountants, we’ve noticed many startups make the same mistakes — mistakes that can be avoided with reasonable guidance. In this blog, we’ll outline the top five bookkeeping mistakes Brisbane startups make and show you how to avoid them.
Mistake 1: Combining Business and Personal Money
Startups in Brisbane often can’t draw a clear line between their business and personal finances. Existing entrepreneurs often use a personal bank account for their business leading it to become messy and it becomes hard to find. This hampers the tracking of business expenses and profit calculation. This additional risk causes confusion and the potential for errors when lodging BAS or tax returns.
You can’t truly claim legitimate business deductions if your mix up your finances. For instance, using a personal credit card for groceries and office needs creates a mix of expenses.
Startups must open a separate business bank account and, if possible, a separate business credit card. All transactions will be traceable. Moreover, bookkeeping will be easier for you. It will also establish your creditworthiness with lenders and investors. Milan Accountants frequently assists Brisbane startups in establishing financial systems to avoid this problem.
Mistake 2: Not Tracking Records and Missing Receipts
Another mistake startups do is not maintain proper records. Customers lose their paper receipts, forget their invoices, and don’t document a transaction. The absence of documents, when it comes time to lodge GST, PAYG or income tax, generates headaches and ATO penalties.
Startups also cannot trace cash flow, measure profitability or budget without accurate records. When a company doesn’t keep good accounting records, it shows that they lack professionalism and financial discipline.
Use cloud-based accounting software such as Xero, MYOB or QuickBooks that allow you to scan and upload receipts instantly. These tools also link with your bank account for easy reconciliation. Getting professional bookkeepers in Brisbane ensures accuracy and compliance while freeing up your time to spend on growing your startup.
Mistake 3: Do-it-Yourself Bookkeeping, in the Absence of Skills
To save on costs, several startup founders try their hand at bookkeeping. Using accounting software can seem reasonable at first. However, lack of experience leads to mistakes. For example, wrong GST coding, not reconciling the accounts and wrong classification of expense. Eventually, these inaccuracies add up leading to wrong financial reports and compliance issues.
When you do your own bookkeeping, you spend a lot of valuable time you could spend building your business. Often, correcting errors becomes much more expensive than hiring an outside bookkeeping firm would have been in the first place.
Fix it: We outsource the bookkeeping to experts who know the Brisbane startup scene and ATO compliance. Companies such as Milan Accountants deliver inexpensive bookkeeping services for start-up organizations to keep your books accurate, current and compliant.
Mistake 4: Not Managing Cash Flow!
Cash flow problems are often cited as the primary reason startups fail; generally, poor accounting is to blame for these issues. Entrepreneurs in Brisbane sometimes showcase profit and loss but don’t keep an eye on when payments are due or when clients will pay. Because of this, the business can look like it is profitable, but not have enough cash to pay wages, rent, or supplier invoices.
Startups cannot plan for financial needs, taxes, or growth opportunities without cash flow tracking.
An accountant may help you develop an effective cash flow forecast to determine your expected inflows and outflows. This helps startups predict shortages and plan financing ahead of time. To maintain liquidity and financial soundness, you must constantly check your account receivable, account payable, and reserves.
Mistake 5: Forget to become conscious of compliance
New businesses often forget that complying with the law can become more complex similar to BAS and GST as well as superannuation, and payroll. The ATO can impose expensive fines if you lodge your BAS late, have unpaid super or make PAYG tax errors. For a new business, these penalties can be devastating.
Another mistake startups make in compliance is they do not register on GST on time. Once the yearly turnover exceeds $75,000 registration of GST is necessary. Not registering can cause you liabilities from the time you started.
It would be helpful to hire specialized tax accountants and bookkeepers that are familiar with the rules in the Brisbane area. Milan Accountants assist startups with meeting deadlines, managing GST and PAYG obligations, and preparing accurate BAS lodgements. This ensures compliance and credibility with the regulators or government and other stakeholders.
Why Good Bookkeeping Matters for Startups
Not making these 5 mistakes can help you comply to regulations and lay foundation for growth. How to do it? Good bookkeeping provides.
- Accurate insights into your startup’s financial health.
- Better cash flow management and financial planning.
- Compliance with ATO regulations, avoiding penalties.
- Confidence when seeking funding or pitching to investors.
- More time for founders to focus on scaling the business
When bookkeeping is done professionally, startups can take better decisions, get investors and scale successfully.
Conclusion
Brisbane’s startup scene is vibrant, but not every startup here is destined for success. Mixing finances, not keeping records, doing-it-yourself, not looking at cash flow, and not bothering about compliance are all bookkeeping mistakes that can derail the journey even before it begins. You can easily avoid these problems with the right systems and expert guidance.
Milan Accountants help Brisbane startups set up their bookkeeping as the foundation for their future growth. When you outsource bookkeeping, you can rest easy knowing that your finances are as accurate as your business plans.
Brisbane startups can avoid these common mistakes by contacting the team at Milan Accountants. Let us help you set up the right financial framework for your business.
