Top 5 Bookkeeping Mistakes Small Businesses Make (And How to Avoid Them)
Keeping up with bookkeeping is a must for any small business, but even with the best of intentions, it can be easy to make mistakes. These mistakes can lead to missed deductions, cash flow issues, or even tax troubles. Today the experts at Bee Sting Bookkeeping are providing a list of the top five bookkeeping mistakes small businesses make, as well as some tips to keep your books in great shape!
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1. Mixing Personal and Business Expenses
Many small business owners accidentally combine personal expenses with those of the business. This only brings about confusion and hinders you from knowing your real business expenses.
Solution: Have different bank accounts and credit cards dealing with your business transactions.
2. Not Keeping Track of Receipts
Misplacing receipts doesn't make it easy to document expenses properly. Not only does this complicate tax filing, but it can lead to missed deductions.
Solution: Consider using a digital app to store and categorize your receipts, making them easy to find come tax season.
3. Failure to Regularly Reconcile Accounts
This is one surefire way of ensuring that some of those transactions were never recorded or some expenses have been duplicated.
Solution: set a recurring monthly reminder for reconciliations of bank statements with your records. It is an easy way to catch discrepancies before they grow into larger problems.
4. Ignoring Accounts Receivable
Unpaid invoices can stack up quickly, affecting your cash flow.
Solution: Make it a habit to follow up on overdue payments to keep the cash flowing smoothly.
5. Waiting Until Tax Season to Organize
So many small businesses wait until the last minute to do their bookkeeping; this causes stress and can lead to mistakes.
Solution: Steer clear of the mad dash during tax season by keeping your books current on a monthly basis.
At Bee Sting Bookkeeping, we help small businesses avoid these common pitfalls and stay on top of their finances. Contact us today to see how we can help you keep your books in perfect order—so you can focus on growing your business!
