Small business owners have a lot of their plate. They’re an expert in whatever product or service they offer, but they’re also in charge of an entire business, and that’s a whole job unto itself. Chances are if you’re a small business owner, you’re making some mistakes in your bookkeeping. Here are a few most common.
1. Bad Records
Have you ever lost a receipt and thought it was no big deal? It can be. A strong audit trail relies on having all your source documents accurately recorded. Develop a complete filing system that you’ll be able to stick to. It doesn’t have to be complicated, just thorough! Have you miscategorized an independent contractor as an employer? You could overpay remittances if you do. Different categories of income and expense can have different treatments and knowing the ins and outs could save you money at tax time, so make sure everything is being listed correctly!
2. No Backups
It may seem obvious, but do you have backups of your financial statements? Do you have copies of your financial data on a backup server or drive? If not, you’re in danger of losing important records. A good bookkeeper will ensure everything is saved in more than one spot.
3. Consolidated Bank Account
While having one bank account to do everything may seem like it saves time and is efficient, it’s actually a huge complication! If your personal finances are mixed in with your business finances, it can be hard to keep track of what’s what and make reconciling bank statements harder. Break them up.
4. Poor Expense Tracking
Do you keep a petty cash box? Always make sure you have receipts detailing how that money was spent. Do you simply pay for business expenses with your personal money or credit card? Make sure to document what you need to reimburse.
There are many more mistakes that could be costly, but these are some with easy solutions. If you need help getting your books in order, let KB Accounting help. Our trained bookkeeping staff will save you time and money.
