It is not unusual for me to meet with small business owners who, having ignored their books for several months, come to Ozlop for help with getting them into shape. Yet time and again, we meet the same business owners who feel that having outsourced bookkeeping, the job is done.
This is a fundamental mistake and let me tell you why: if you fail to keep track of what is coming in and out of your business, it may be that you don’t have enough money to pay the taxman and that could mean the end for your venture.
Let me tell you about self-employed builder Pete, for instance, who came to Ozlop at the beginning of the financial year after receiving a hefty tax bill that he had struggled to pay. Pete had wrongly calculated his earnings for the previous year, while also understating his costs because he neglected to keep track of all receipts and invoices.
At the time, he told us, he was just too busy to focus on the books and, as things appeared to be going well, he assumed he would have enough to pay the tax bill at the end of the year. And anyway, he added, he kept track of his customers in a book he kept in the van, he knew who paid him and when, so why bother with books?
The tax bill was a wake-up call for Pete, who quickly realised that his paper-based systems had failed him. What he needed was support from a dedicated bookkeeping service to keep his books online and up to date. He understood that this meant regularly sending us the information we needed to process his books and promised to set time aside weekly to do so.
Yet, the problem was that while things worked well for Pete for the first few months, he quickly slipped back into bad habits. Pete wrongly assumed that having outsourced the task of bookkeeping, his business finances no longer needed his attention. But how could he make good spending decisions without knowing how much money he had in the bank?
In the end, Pete decided being self-employed was going to be more stress than he needed so he joined a small builders’ firm.
It is difficult to see a trader give up on their business because of the business of bookkeeping, but it is something we hear about regularly at Ozlop
What is more common is meeting small business owners who have all the good intentions of doing the books, but who never actually follow it through. It is akin to joining a gym in January with best intentions but then never going. If you want to get fit, you must actually go and do some exercise. You can’t just pay the subscription!
Let me be clear: managing your books is essential for your business and, as a small business owner, it is your responsibility! At Ozlop we specialise in delivering timely and accurate books that will help your business identify financial troubles before they arise, but we can only do that when businesses send us the correct paperwork so you need to make sure you do your bit by keeping all of your receipts and invoices.
If you want to discuss how Ozlop can help you adopt good bookkeeping habits that you stick to get in touch.