Bookkeeping Insights: Most Common Accounting Mistakes That Could Hurt Your Business.
Many small business owners tend to handle their accounting and bookkeeping, especially when they’ve just started. However, keeping track of the finance side of the business– everything from income to expenses to tax compliance– can be overwhelming. Our bookkeeping insights will help get you back on track.
Mistakes can happen quite quickly and can have costly consequences to your business. Below are five of the most common DIY accounting errors that you should avoid.
It takes excellent organisation skills to be able to do your bookkeeping and accounting right. For example, you would need to record every transaction, keep receipts or digitise them for future reference, calculate taxes accurately, and more. If your records are disorganised and not updated, you’ll likely miss something out, which could get you into trouble during the tax season.
No Accounting Schedule.
As a business owner, there are many other things that you need to attend to; accounting can easily be pushed to the bottom of your seemingly endless To-Do list. Yet, it is imperative to set an accounting schedule to add your current income and expenses into your records. If daily updating is not possible, dedicate some time once a week to do your accounting.
Regularly check if your bank account reflects the same balance as you record your cash flow and other financial data into your books. If you find a gap, there is likely a mistake somewhere that you need to find or even a fraudulent transaction. Taking immediate action will help you prevent worse problems further down the line.
Failing to Take Into Account Small Transactions.
It can be easy to forget about minor transactions such as the office supplies you picked up on your way to the office or the freebie you sent a loyal customer. However, no matter how small you think the transaction is, it’s essential to keep a record and get a receipt. In addition, you will need to present all business expenses in case of a tax audit, even these small ones.
Not Backing Up Data and Using an Accounting Software.
Imagine if the laptop where you store all your financial data was stolen, lost, or broken beyond repair, and you don’t have a backup. You would need to redo everything from scratch, which could be a colossal waste of time.
If you’re still using a spreadsheet or paper ledger to keep track of your business finances, you might want to consider upgrading to cloud-based accounting software. By migrating to the cloud, you will quickly back up your accounting data and even access them wherever and whenever you need to.
These cloud-based accounting systems also integrate well with your bank account and other influential business apps. The results are streamlined processes, less manual work, enhanced efficiencies, and better overall business performance.
While being aware of these common accounting mistakes could help you avoid them, the most convenient and efficient approach to stay on top of your business finances is still to entrust your accounting to the experts. Our team of experienced accountants can integrate the most suitable cloud accounting software for your business and even train your in-house staff on its proper implementation giving you the good oil with our bookkeeping insights.
Let us take charge of your bookkeeping while you focus on growing your business. So get in touch with us today!