1. Only big businesses earning lots of money need a bookkeeper
Often the businesses who think they can’t afford a bookkeeper yet are exactly the ones who really need one. In the early stages of running your business you may find yourself feeling completely overwhelmed at the breadth of tasks that need to be performed. Hiring an external bookkeeper can be really beneficial in the long run as they’ll be able to identify where savings can be made, not to mention the fact that they’ll free up your time to concentrate on bringing in more income.
I also speak to a lot of sole traders who are unsure about what they can include in their self assessment tax return, so end up paying more tax than they really to. Often they’ll save much more than what it will cost to get someone to prepare it for them.
2. Anyone can do bookkeeping
They probably can, if they study the qualifications and develop a strong understanding of the theory that underpins it! When someone says this they normally mean that their husband/wife/child/dog can do data entry, which is a very different kettle of fish to knowing exactly how things should be categorised and what is and isn’t allowable for tax purposes.
Although it’s true that anyone can call themselves a bookkeeper, or an accountant for that matter, anyone providing bookkeeping services (including invoicing and credit control) must be supervised under the anti-money laundering regulations. They should belong to at least bookkeeping or accountancy professional bodies – our supervision and license to practice are provided by the CIBA – Chattered Institute of Business Accountants
3. My accounting software does my bookkeeping for me
No, it will help you, but it doesn’t do it for you. Accounting software nowadays, particularly if it’s cloud-based, is fairly simple to use, but as I mentioned earlier, bookkeeping isn’t just data entry. Pretty much anyone can enter numbers into software, but do you know what the numbers mean? Care still needs to be taken to make sure that the information is being recorded accurately…rubbish in means rubbish out!
4. Bookkeepers are only needed during tax time
The building blocks of financial accounting. In its purist sense, it is a series of debits and credits reported in various general ledger accounts. A proper double-entry bookkeeping system is essential for all businesses that require annual financial statements. The benefits of having a proper bookkeeping system are in the accuracy of the financial reporting. A sole proprietorship does not technically require a double-entry bookkeeping system but may choose to employ one for internal control purposes. For example, a proper bookkeeping system reconciles the banking records to the accounting records to avoid double entries, missing entries, and transpositions.
5. Bookkeeping and Accounting is the same
Bookkeeping is the systematic recording of daily financial transactions, while accounting is the broader process of analyzing, interpreting, and reporting on those financial records to provide strategic insights and make business decisions. Bookkeeping is a fundamental part of the accounting process, providing the necessary data that an accountant then uses to prepare financial statements, conduct audits, and offer financial advice.
Take action. Start working on improving your finances today, not tomorrow.
Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.
Matsobanemetja Business Consulting (Pty) Ltd is your accounting partner that you can entrust with the bookkeping function, right up to financial reporting. We helps you keep accurate records of your business finances.
We have well trained and qualified staff that manages the aspect of both business and individual taxes.
We are the fast growing accounting service-providing agency in South Africa and across the globe.
If you need a consultation with us with regards to your business, any type of business – please reach out to us by email hello@matsobanemetja.blog
Matsobanemetja Business Consulting (Pty) Ltd offers a wide range of bookkeeping and accounting services, tailored to your business needs at an affordable price.
You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za
“The best accountants are not just number-crunchers; they’re financial storytellers.”
– Jessica Turner
Matsobanemetja Business Consulting Pty Ltd 