There are several common bookkeeping mistakes that business owners make which can not only cost you money, they can cost you a great deal of time as well.
In order to help you avoid these mistakes, let’s take a look at what they are, and how they affect a business. Give Books Onsite a call on 1300 2BOOKS if you need some further assistance.
Mistake #1: Trying to keep the books yourself
This is an especially big problem for small business owners. It is not uncommon to try to manage every aspect of a business by oneself. Many times people do this in an effort to save money; however in the long run it can lead to errors in the accounting, and a good bit of time being wasted that could otherwise be spent on the products or services being offered. If you're not an experienced bookkeeper, then hire a bookkeeping service.
Mistake #2: Not reconciling your business bank accounts with your books
It is essential that the books always match the bank statements. When all the numbers are properly tallied, you can clearly track where money goes, what money is owed, and what bills are outstanding. This keeps monetary errors from being overlooked.
Mistake #3: Not updating the books regularly
It is very common to simply forget to update the books. Anytime you make a purchase for any type of business expense, and every time there is any type of income or outgo of cash, you need to document it in the entry form.
Mistake #4: Not using, or not using the right type of, bookkeeping software
Bookkeeping software can be extremely beneficial to accurate record keeping. Try to find a program that will work well for your type of business, and train anyone who completes transactions for your business to use it properly. This includes Xero, MYOB and QuickBooks, among other options.
Mistake #5: Not backing up data
You should always keep a backup log of all of the data that is entered into any type of bookkeeping program. This takes no time at all but will mean a world of difference should your computer crash.
Mistake #6: Not categorising entries
Make sure you design your books to have plenty of categories in order to properly explain all entries. This will ensure your records are easy to follow, clear, and consistent.
Mistake #7: Not establishing a separate business bank account
Even if you run a sole proprietorship, you should always have a separate bank account to track all of the transactions that have to do with the business. Doing this will make the process of keeping books much simpler, and will provide easy to track documentation of all income and expenses.
These are just a few of the common mistakes that business owners make when it comes to bookkeeping - if you are finding that some of the above circumstances are visible in your books, give Books Onsite a call on 1300 2BOOKS and we can assist.
