Common Bookkeeping Mistakes And How To Avoid Them
Business accounting involves more than recording expenses and income in a journal. Tax preparation, financial management, and payroll management are integral parts of accounting that can help you strengthen your business and streamline its operation.
Unfortunately, many business owners focus on company growth and fail to devote enough time and effort to organize their business financial matters. Inadvertently, they overlook the little things and commit mistakes that have a massive impact on their company and loss of financial stability.
To help you steer clear of these situations and keep your business from getting into deep water, Reckon Services has compiled a list of the most common bookkeeping mistakes and how to avoid them.
1. Trying to do it all by yourself
As a layperson, keeping up with the laws related to accounting and tax preparation can be difficult. If you try to maintain your accounts by yourself, you’re bound to make some mistakes. Hiring a professional can help you avoid some of these situations and get your accounts balanced accurately.
2. Failing to track receipts for minor purchases
Keeping track of all your receipts, personal and business-related, will you help you organize your accounts in a more structured way. Not only will it record your expenses, but these receipts will also allow you to claim all the possible deductions when preparing your taxes.
3. Failing to negotiate vendor terms
Many business owners make the mistake of not working with their vendors to discuss better terms. Negotiating the payment terms with your vendors can help you optimally ease your cash flow as per your needs and manage your business budget.
4. Failing to report sales and payroll taxes accurately
Accurate tax preparation and filing is an integral part of any business’ financial management. Failing to report your sales and payroll taxes correctly could attract heavy penalties and fines and even lead to an audit. Ensure that you steer clear of this mistake by working with a trusted accountant to help you with the process.
5. Not staying up to date
The initial years of a new business are incredibly overwhelming, but failing to keep your accounting books current will only make the situation worse. If your books are suffering because business is booming, that’s a sure sign you need to bring on an extra hand to help you stay on top of your business’ financial matters. A bookkeeper will make sure that costly errors are caught more quickly, thus making your business operations more efficient.
To avoid these and other mistakes related to bookkeeping, reach out to Reckon Services. As leading accountants and bookkeepers in Mississauga, ON, we help small businesses, enterprises, contractors, and professionals organize the finances of their business and make smarter financial decisions. By using new technology to manage their accounts, we provide valuable, accurate, and timely information and empower their businesses to thrive. We offer a full suite of accounting and bookkeeping services, including management reporting and controller services, corporate and personal taxation, and payroll services to clients across Brampton, Mississauga, Oakville, Hamilton, Toronto, and the Greater Toronto Area.