When you make the switch from employee to subbie you’ll suddenly realise there is a lot more paperwork to look after.
One of the biggest tasks when it comes to paperwork is bookkeeping and lodging your Business Activity Statement (BAS) each quarter.
If you’re like most business owners, this will be one of your least favourite tasks!
Most subcontractors choose to outsource this function to a bookkeeper.
Why use a bookkeeper?
Doing your own bookkeeping and BAS lodgement isn’t exactly the most difficult task in the world.
It is time consuming however, and there is also the potential to make costing mistakes that could come back to bite you.
By using a bookkeeping service you can save yourself a lot of time and also feel confident that a qualified professional is looking after you books.
Some bookkeepers will also offer additional services, such as bank reconciliations and even chasing up your unpaid invoices. These services can be extremely helpful for a busy subbie.
How much does it cost?
If you operate as a sole trader, which is the case for most subcontractors, the cost of using a bookkeeper can be very low.
Prices start from around $80 per month for a sole trader with a low number of monthly transactions.
If you have a high number of transactions, operate under a company or trust structure or employ a number of staff, you will find this price increases to around $200 to $300 per month.
When you consider that doing the books and BAS could take you quite a few hours each month, paying a professional $80 a month is pretty good value.
How does it work?
The process for a subcontractor using a bookkeeper is really quite simple.
All you need to do is bundle up all of your receipts and invoices each month and send them off to your bookkeeper.
Some bookkeepers require that you send the original documents, but increasingly they are happy to take scanned copies. Sometimes it’s easier to just stick everything in a big envelope though!
They will then go through them and prepare a monthly or quarterly report, and will also prepare your BAS to be sent to the ATO.
In many cases your bookkeeper will be able to work with your accountant, which will make the whole process much easier when it comes time to lodge your tax returns.
For more information the best option is to speak with a few bookkeepers in your local area.
There are also a number of online bookkeeping services that are worth considering. Typically these tend to be lower cost and are ideal for a basic subcontracting business.
Once you start using a bookkeeper you’ll probably wonder why you didn’t start sooner!