Most sole traders don’t think about the full cost of sorting out their financial admin. Our financial admin calculator can help.
A lot of people will just assume that the cost of their financial admin is simply the cost of hiring an accountant; however, there’s a lot more to it than that. The list below breaks down the key areas of cost, when it comes to your financial admin.
The main costs of financial admin:
- Accountant’s fees - If you hire an accountant or bookkeeper to help you with your taxes, you’ll be paying a monthly or annual fee. Usually a traditional accountant or bookkeeper will cost you in excess of $2,000 per year for Income Tax & GST calculations and tax lodgements (making the payments is all down to you though!).
- Accounting Software - These days, having to pay for, learn and use accounting software is mandatory if you hire a traditional accountant. Most accounting software charges a monthly subscription fee, that can range anywhere up to $50 per month and above.
- Spreadsheet/Office Software - Sometimes you will have to purchase a license for spreadsheets or other tools used for tracking your income and expenses.
- 3rd Party Invoicing and Expenses Apps - If you use a 3rd party app to manage your invoices or to store the receipts for your business expenses, then you’re probably paying an annual or monthly fee for access to that software.
- Your Own Time - This is a big one. From making manual internet banking payments, through to to reconciling accounting software and filing tax returns - this all costs you hours of your own time every month. As an independent professional, you’ll be acutely aware of the value of your own time. That’s time that could be far better spent with your friends and family, or working with your clients.
But wait! If I put my tax money into my savings and mortgage accounts, won’t the interest I earn offset those costs?
Not really. Given that current Interest Rates are rock bottom, the amount of interest you might be able to earn is very low. Additionally, with the ATO and Medicare demanding payments at least every couple of months, the days of being able to store tax funds for months on end are a thing of the past. This means that you’re unlikely to pick up that lucrative ‘bonus interest’ on your savings accounts, awarded by the bank if you don’t make any withdrawals.
You can use our Financial Admin calculator to calculate how much interest you could earn if you put all your tax money in a high-interest savings account between payments (using a generous interest rate) - so you can see how much value you could conceivably generate from that effort.
Ready to find out how much your admin is costing you? Just use our calculator below to get the REAL totals 👇
Once you’ve seen the true cost of your Financial Admin, it can be hard to forget. A few years ago, the founders of Hnry got to exactly this stage. We realised that we were spending hours, and thousands of dollars each, just on our financial admin. That’s why we created Hnry - to take care of all the financial admin for sole traders, so that they could spend their time and money on far more useful things!
If you’re interested in finding out how using Hnry could save you money, hassle and time, check out the link below.
Share on: