One of the biggest worries that all eCommerce entrepreneurs have is missing out on accounting requirements. Whether done out of sheer neglect or ignorance, this does have big repercussions for the business in the long run. Despite that, there are still some others who consider ignoring it entirely—which poses an even bigger risk for the entrepreneur themselves.
Still, this could be tempting for any business owner who is taking care of their bookkeeping and accounting independently. When things become overwhelming for them, perhaps some might have thought of just dropping everything and hiding from all responsibilities! Unfortunately, the ATO would not let that pass by.
What Happens When You Ignore Your Accounting
If the same thought has crossed your mind, make sure to read through the consequences of not meeting your accounting deadlines. Here are the things that could happen should you decide to neglect your accounting requirements:
1. Trouble in Securing Loan
One crucial requirement every financial assistance provider looks at before lending money to a third party is their good reputation for managing money. That is applicable whether you are an individual or a company applying for a loan. Having an efficient bookkeeping process helps provide your company with complete and well-managed records, increasing your chances of getting approved.
Attempting to borrow money without clean records and a proper system for money management would make any business look deceitful and disorganised. The lenders may not see your business as an organised institution that could pay back, leading to a lost chance of acquiring the money needed to scale bigger!
2. Shortage of Money
An unapproved loan could result in an unfunded business expansion or, worse, no payroll for the employees. If you do not want to experience any of these in the future, consider fixing your financial records as early as now.
3. Wrong Pricing for Your Products or Services
This problem is prevalent in the eCommerce industry. Since the competition is high for some businesses online, they would compete with the rivals' pricing. As such, some of them would lower their prices to capture more customers. As they keep on lowering their prices without referring to their business number, they might end up with a business that no longer makes sales needed to run the business properly.
That tactic would only work well if you allow your accountant to guide you. They know how your business is doing and how else you can increase your profit. However, without accurate records, they cannot help you determine the best strategy or make sound business decisions.
4. Tax Issues
Starting a business includes accepting the fact that you now have tax obligations to fulfil. Failing to handle your tax payments would result in fines that could damage your business reputation and operation. With proper accounting, regardless of your chosen system and method, you can ensure that your business is financially sound, responsible, and following government regulations.
Conclusion
Failure to manage your accounting system could result in many consequences, any of which could utterly cause your business to close. If your company remains diligent about it and makes your preparations early, then your business would be compliant, you can maximise your tax savings, and there would be no problems to deal with later! Staying consistent with your accounting and bookkeeping requirements early on would relieve you from all the possible stress. It would also lessen the chances of inaccurate reporting—which is a benefit in and of itself!
The secret to accomplishing this task with ease and full accuracy is to hire dedicated bookkeepers and accountants to handle the job. If you think doing all these yourself is too time-consuming and confusing for you, then you might need the help of one of Australia's most reliable eCommerce bookkeepers and accountants. Call The ECommerce Accountant at 0755041999, and we would be happy to manage every finance-related responsibilities your business has!