If you have a business, your accounting & bookkeeping practices can often make or break your business. Below are three common accounting & bookkeeping mistakes that many business owners make.
1. Not Keeping the Right Records
A lot of people lose their receipts and think that some expenses are insignificant. But maintaining records that are accurate each month and having the right filing system can save a lot of money and time when it comes to income taxes. It also gives you the documentation necessary if you’re audited.
2. Categorizing Expenses Wrong
If the person that is doing the books doesn’t have any formal bookkeeping training or knowledge, this is going to be problematic. Tracking expenses and income correctly in the right categories ensures that you know what the profits are. When they are categorized correctly, it also can help you save money at tax time.
3. Not Reconciling Your Bank Accounts
When you don’t keep your business and personal bank accounts separate, this can be a problem. If you’re audited, it’s possible that you’re going to have to give them the complete records of any activities related to your business. That’s why you want to keep everything separate. These are three accounting & bookkeeping mistakes that people make when they have a business. If you’re a business owner, make sure that you remember these three mistakes that a lot of people make. Knowing about them ahead of time can help you avoid them. And if you need help, you can always hire a professional accounting & bookkeeping company to take care of these things for you and give you peace of mind.
