[LINK] private question for off list - consulting

[Robert Brockway]

On Fri, 6 Dec 2013, Roger Clarke wrote:

> 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.

I'm in two minds about in-sourcing book-keeping.  I'm on the board of 
directors of a US not-for profit (Software in the Public Interest, 
http://www.spi-inc.org) and we've recently out-sourced book-keeping. 
Initial results seem positive.

Generally tax preparation wasn't terribly expensive and saved more than 
enough time to make it worth it.  First time around I did own payroll. 
Useful for learning payroll rules and laws but mot much else.

As noted, my last company was in Canada so the tax/accounting/payroll/etc/ 
rules I learnt over there aren't even completely portable to Australia.

> 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

I used SQL-Ledger and (later) LedgerSMB for my privacy consulting company 
in Canada.  They are both Free and Open Source and were easy to work with. 
I highly recommend LedgerSMB for those who do want to do in-house 
book-keeping.  They both run on Linux but use a standards compliant web 
interface.  Naturally always evaluate a product to make sure it fits your 
requirements before adopting it.

> 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.

Interesting.  I thought it had to be 'all or nothing' across the entire 
company accounts.

> 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.

Absolutely.

And register for GST right away.  Not registering for GST is like holding 
up a big sign saying "Hey everyone, we don't make much money!".  Companies 
are fine with GST on invoices - they get input tax credits.

Cheers,

Rob

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