Accounting and Bookkeeping are two vital facets of a company that shouldn’t be cut back on by any employer. Many business owners don’t realize the importance of bookkeeping and how it’s an asset they can use for managing their business and helping it grow. Making bookkeeping mistakes or not maintaining proper books could keep you from knowing the real financial condition of your company. So, as tough and tedious as bookkeeping sounds, keeping your books accurate and up to date is one of the most important ways to lay the groundwork for your company’s success.
If you’re new to doing your bookkeeping, it’s easy to make mistakes and Ontaxco’s accounting and bookkeeping services can help you maintain accurate books for your business.
Here are bookkeeping mistakes that you should avoid helping your business grow.
1. Combining Business & Personal Expenses – If you are a small business owner, you might be using your personal card for business transactions or vice versa. This won’t help you in the long run because you’ll have to sort these transactions later and you may end up losing track of business expenses.
You can get in a habit of avoiding this issue by opening a dedicated business bank account from the commencement of your business. With a business account, organizing and maintaining records is very easy.
2. Not Saving Receipts – Receipts are important but most of us get rid of them after buying everyday items. Doing so for your personal purchases can be acceptable, but losing receipts of any business transaction can cause errors in the process of bookkeeping. Getting hold of all the receipts can help your accountant include all your expenses while doing taxes.
3. Improper Categorization – If you are not categorizing your revenue and expenses, you may be in trouble. Precise tracking of your company’s expenses and revenue can ensure accurate calculation of profits. If you do your own bookkeeping, this error can occur through typos, a lack of understanding regarding expense categories, etc.
4. Not Including Taxes – Many people don’t understand the importance of accounting and reporting sales tax. Avoiding record-keeping of sales tax or tax returns can lead to heavy penalties and fines. Incorrect data entry can also result in a higher sum with a higher sales tax applied to it.
5. Irregular Reconciliation – Reconciliation is the process of comparing your monthly records with your bank statement. Doing monthly reconciliation is a good practice and the best way to find errors in your books. The longer you miss reconciliation on monthly basis, the more difficult it will get for you to have accurate finances.
6. Not Getting Professional Help – Not every business owner can do accounts like an expert. The time these business owners utilize on maintaining accounts and books should actually be used in the business growth. If you’re reporting your finances incorrectly, you’re creating a mess for your business and its finances. Not everybody wants to hire a new employee so many businesses outsource bookkeeping services. This will not only get you professional help but also incur the added expense.
There are several other bookkeeping mistakes that go unnoticed like mismanaging the cash or waiting till the last minute to line up your accounts, resulting in losses. All these errors can be eliminated at once by hiring professional help or outsourcing one.
The experts at Ontaxco can help you ensure your bookkeeping is accurate and organized. If you are looking for a trustworthy bookkeeping and accounting professional who not only gets your financial records straight but also helps in business growth, Ontaxco is your one-stop solution.
To know more, contact us today!
