Steer Clear of these 4 Business Bookkeeping Blunders
One of the most taxing and tedious tasks you have to do when running a business is bookkeeping. Although there are technological advancements that make this job manageable, it is still a cause of headaches for most business owners. Even if they're challenging to fulfil, keeping track of your expenses and collecting essential monetary records are necessary to ensure that your business's operations run smoothly.
Keeping track of your accounts is a great way to know where your company stands and if there are needs for changes and improvements. To properly maintain your finances, you must work with a reliable business accountant. This way, they can assess and store all your records and receipts to avoid confusion and financial problems in the future.
Working with an accountant is a cost-effective and time-efficient way to get bookkeeping done. However, some business owners make a few mistakes that make this job a bit difficult. Here are a few bookkeeping blunders that you should avoid:
Mistake 1. Choosing the wrong program
Ideally, accounting software should make your job easier. However, when you choose the wrong program, it may result in chaos. To help you choose the right software to use, make sure you assess what your business needs and match it with the level of accounting skill required.
For example, if your small business only needs payroll, invoicing, and POS, sticking with a less complicated program can help you with your bookkeeping needs. However, you need to keep in mind that if you want to opt for an expansion in your business, you should use a program that can help you adjust to this change.
Mistake 2. Having an inefficient bookkeeping schedule
A common misconception about bookkeeping is that you cram all the work in one day. Sure, you can do this; however, it isn't suggested. When you run a business, you already have a lot of tasks to juggle. Cramming your bookkeeping duties may cause additional stress and is incredibly counter-productive.
You must ditch "binging" your bookkeeping days and allocate the proper time and part of the day to organise all your receipts and records. This will avoid any losses and complications with your accountants.
Mistake 3. Not being organised
The critical element to smooth bookkeeping is by staying organised. A common mistake business owners make is tossing all the receipts and bank statements in one box. This isn't a good idea because you are just piling paper after paper, and it will be a struggle to organise when it's time for you to start bookkeeping.
Since most transactions are now processed online, it is best to still stay organised. You can do this by following proper bookkeeping practices and inputting all necessary information in a spreadsheet or your accounting program. This will not only benefit you, but you are ultimately helping out your business accountant as well.
Mistake 4. Mixing business transactions with personal accounts
One of the common mistakes of business owners is mixing personal and business accounts when making transactions. When you use your credit card for a business transaction, it is incredibly convenient at that moment. However, when it is time to do some bookkeeping, reimbursing expenses may be a nightmare.
It is best to keep business transactions through your business's bank account to avoid any complications with your personal accounts.
Bookkeeping and accounting shouldn't be challenging to do. Once you've figured out the perfect schedule and style to deal with this task, you might notice that you will breeze through your bookkeeping duties without any problems. The best way to have a positive experience with bookkeeping is by remembering these four common bookkeeping mistakes and working with a business accountant. This way, your finances will always be in check, and you won't have to worry about any financial issues.
Are you looking for bookkeeping and accounting assistance? We handle small business accounting in Australia here at New Wave Accounting. Our company offers expert accounting and bookkeeping services to our clients from different industries. Talk to one of our account specialists today!