6 Important Questions Your Bookkeeper Will Ask About Your Small Business

Updated: Jun 3

Using a professional bookkeeper makes life much easier for small- and medium-sized businesses.


Not only can you be assured that the information needed to complete your tax return will be accurate and complete, but bookkeepers also ensure you have the correct systems and processes in place to record all the financial information you need for managing and growing your business effectively.


Before commencing work on your books, your bookkeeper will want to know the answer to six important questions about your business.


Read on to discover what these questions are and why they matter when it comes to your financial management and record-keeping.



What Kind of Business Are You Running?


There are a variety of different bookkeeping methods and options, some of which are going to be more suitable for particular businesses.


In addition, more complicated businesses will likely require more bookkeeping time, which will affect cost. Knowing the scope and nature of your business helps your bookkeeper decide on the best way to keep your books in good shape.


What Assets Do You Own and What Liabilities Do You Have?


Assets and liabilities don't just help to determine the financial health of your business, they also have tax implications. For example, some assets depreciate over time, and some liabilities may be tax-deductible.


In addition, if your liabilities are draining your business of capital, a bookkeeper can often come up with ways to reduce them or manage them more effectively.


Do You Have an Inventory and Is it Listed On Your Balance Sheet?


An inventory contains details of all the materials, items, and components your business has in its possession. An inventory should be updated in real-time so that you always know what, exactly, you're currently in possession of.


The inventory also plays a key role in prompting the ordering of fresh materials, chasing invoices, and similar tasks.


For accounting purposes, an inventory is classed as an asset. Listing it on your balance sheet provides a more accurate and comprehensive view of your true financial position. For example, a business may only have a small amount of working capital, but a large inventory.


Do You Have Payroll?


If you have employees, the law requires that certain payments and deductions are made. Payroll is a key part of bookkeeping activity if you have one.


Are Your Tax Returns Correct and Up-To-Date?


If your tax returns are error-ridden and/or behind, the ATO may penalise you. Although some leniency is granted due to global events in 2020, this isn't inexhaustible.


In addition, without accurate tax returns, you've no way of working out the true financial position of your company.


Do You Have Plans to Expand or Scale Back Your Business in the Next 24 Months?


If your income is likely to change significantly in the next couple of years, this has implications for the amount of tax you'll need to know.


The more notice your bookkeeper has of your intended plans, the more likely they are to be able to streamline your tax obligations.


Contact Us



To find out more about how professional bookkeeping services could benefit your company, call the team at Early Bird Accounts (02) 5701 5562.



About the Author


Rachel has over a decade of industry experience, an advanced diploma, a passion for taking the stress out of running a business and enabling businesses owners to go on doing what they do best.

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