At 10:24 +1000 6/12/13, Robert Brockway wrote: >(5) Outsource your accounting. Really. It is a time sink. You would be >better off spending the time writing quotes or doing just about anything >else.
Personally, I'd say 'insource your book-keeping', but 'outsource the accounting and tax' except to the extent that you feel comfortable avoiding the extra cost. If you don't do your own book-keeping, your records become a mess, and your accountant guesses each year based on the shoe-box of partial data thrown at them, and it costs you more for the accountant and more for tax - because, unless you're constructively dishonest, you almost never fall short on the revenue-side, but you always do on the expenses (= tax-deductions) side. By book-keping, I mean MYOB or some better-quality product, up to 'trial balance' stage. (I designed and wrote accounting systems in the 1970s, and spec'd some more in the late 1980s, and I can't believe how poor-quality MYOB is). And if you do that, then of course you can print the P&L as well, quarterly will do, and have some idea of roughly what your business actually looks like. (Even if the accountant does 'correct' a few things later). >(6) I used the 'accrual method' of accounting. I consider this to have >been a mistake. When it comes to late payments you may find yourself >paying tax on money you haven't received yet. I did. The alternative is >called 'cash accounting'. Obviously there are pros and cons. Talk to >your accountant about which system is right for you. For a business like this, I'd use cash accounting, as you say *especially* on revenue. The exception is depreciation, done at year end. I haven't accrued or prepaid anything other than depreciation since I started my consultancy company in 1982. Oh yes, and incorporation does make it look better, and makes insurance easier, and makes it a lot cleaner when bidding in other people as well (even for small quantities of sub-contracting), and being bid in by other people, and it really shouldn't cost much. -- Roger Clarke http://www.rogerclarke.com/ Xamax Consultancy Pty Ltd 78 Sidaway St, Chapman ACT 2611 AUSTRALIA Tel: +61 2 6288 6916 http://about.me/roger.clarke mailto:[email protected] http://www.xamax.com.au/ Visiting Professor in the Faculty of Law University of N.S.W. Visiting Professor in Computer Science Australian National University _______________________________________________ Link mailing list [email protected] http://mailman.anu.edu.au/mailman/listinfo/link
