In the age of Social Media, it is tempting for small business owners to handle their bookkeeping themselves. While this might seem like an efficient move, if you are not skilled enough DIY bookkeeping can quickly become a costly mistake.

Let’s take a closer look at the risks and why professional bookkeeping is a smarter investment.

Misclassification of Accounts

One of the most common DIY mistakes is misclassifying transactions. This might seem harmless, but incorrect categorisation can affect your:

• Profit and loss accuracy;
• GST reporting;
• Fringe Benefits Tax (FBT) obligations;
• Income Tax obligations;
• Employee entitlements;
• Payroll tax, and so on.

While this may seem like a minor mistake to the untrained eye, such errors can lead to:

• ATO Penalties and interest;
• Regulatory Investigations (i.e. Fair Training, ASIC);
• Reputational Damage;
• Legal action.

Missing Key Deadlines

We see this all the time that DIY bookkeeping often leads juggling numbers after hours, increasing the chance of missing:

• BAS lodgement dates;
• Superannuation guarantee payment due dates;
• STP reporting deadlines;
• Annual TPAR submissions and so on.

Missing these can result in ATO penalties, interest charges, and even loss of tax deductions (e.g., for late super payments).

Incorrect GST Treatment

GST calculation can be very complex. Common errors include:

• Claiming GST credits on non-taxable purchases
• Failing to report GST on income
• Incorrectly reporting GST on imports and exports

Mistakes here can result in amended activity statements, audits, and ATO penalties.

Lack of Real-Time Financial Insight

When you are managing your own books, the numbers are often updated irregularly. This leads to a lack of visibility over your cash flow, profitability, and upcoming liabilities. Inaccurate records can also affect your ability to make informed business decisions. 

Risk of ATO Audit

Inconsistent or incomplete records are a red flag. The ATO has increased its use of data-matching technology and AI to identify anomalies in tax returns and BAS. If your DIY bookkeeping doesn’t align with industry benchmarks or bank data, an ATO audit could trigger and you will require clean, reconciled records to defend your position.

How We Can Help

At Taxcor Business Accountants, we offer tailored bookkeeping solutions that:

• Ensure full compliance with regulatory requirements;
• Keep your records ATO audit ready at all times;
• Give you real time insights into your financial performance through our monthly management report;
• Free you up to focus on what you do best; Running your business.

Our team is across the latest updates to tax legislation and compliance requirements, so you can rest easy knowing your books are in safe hands.

DIY bookkeeping might seem manageable in the early days, but as your business grows, so do the risks. .

Avoid unnecessary stress, costly mistakes, and time consuming errors. Trust a qualified professional to keep your financial records accurate, compliant, and ready for whatever the future holds.

Get in touch with Taxcor Business Accountants today for an obligation free consultation.