The Burden of Bookkeeping and Why Australian Businesses Fail
Australia has a love affair with starting businesses. In fact, the “Land Down Under” is now one of the number one places for startups in the world, with around 350,000 businesses founded in the country from 2014 to 2019. While this entrepreneurial spirit is something to be celebrated, the success rate of these businesses leaves something to be desired, especially since 97% of Australian businesses fail eventually.
One of the leading causes of business failure is a lack of preparation. More often than not, budding entrepreneurs do not do their due diligence when it comes to chasing their dream. Starting on hasty decisions can lead to expensive mistakes such as under capitalisation, lack of research, underdeveloped business skills, poor cash flow management, and so on.
The burden of bookkeeping
Bookkeeping is perhaps one of the most tedious aspects of running a business and is often the skill least developed in new entrepreneurs. After all, the fun part of the business is raking in the profits, not counting every single dollar that goes in and out. All the numbers and math can become annoying, but they are unfortunately one of the most important elements of success.
Bookkeeping is the key to understanding your history of transactions to determine what you can do in the future. With accurate records, you can analyze the success of your endeavours. Are you overspending? What do you need less of? More of? What can you do? These are just some of the questions you can ask to determine what you can do in the future.
Depending on the accuracy of your data, you can also use this to determine patterns and make projections. These projections, though just theories, can help you plan your finances in advance. This is especially important if your business has higher revenues in certain parts of the year. The more accurate your data, the more accurate your projections can get.
There are ways to make it easier
Gone are the days when entrepreneurs had to write down their sales and expenses in a notebook with a pen. Nowadays, there are plenty of digital solutions to help make bookkeeping easier. If you have a brick and mortar establishment, a Point-of-Sale device can do all the maths and tracking for you.
Such software can help you track your profits and expenses in real-time, providing an easy-to-understand interface. Coupled with some other technological advancements like cloud-based solutions, you could take all the hard work out of bookkeeping.
You can even take it a step further by outsourcing the job to small business accountants. After all, not everyone is trained for it; why not leave it to the professionals? There are plenty of affordable small business accountants out there who can help you run your business.
What many people discover about running a business is that it is much easier said than done. The world of commerce is challenging, especially since there are so many ways to fail but only a few ways to succeed. With the help of small business accountants, the right habits, and well-planned strategies, however, you have a recipe for longevity.
If you’re looking for the help of small business accountants on the Gold Coast, send us at New Wave Accounting a message. We have helped start, grow, and scale the businesses of over 600 entrepreneurs. We can do the same for you.