Bookkeeping is a part of your business that may not be as fun as the rest, but it is a necessary part. Whether you are new to bookkeeping or you own an established business, but your accounting isn’t always perfect, you might be making some common bookkeeping mistakes that will make your life more difficult in the long run.
Here are some of the most common mistakes business owners make when it comes to keeping their financial records in order:
- Improperly Categorizing Expenses – Tracking income and expenses in the correct categories ensures maximum profitability. You’ll want to make sure to track every expense correctly, even the ones that seem insignificant.
- Not Reconciling Accounts – Keeping your personal and business bank accounts separate is critical. If you were ever audited, you’ll want to provide records of separate business-related and personal transactions.
- Missing Sales Tax – Not reporting sales tax correctly can result in fines and penalties for your business. Additionally, inaccurate reporting could result in you paying more sales tax than is actually necessary.
- No Backups – Even though technology makes our lives easier, it is important to have a backup of all of your bookkeeping just in case there is an outage.
- Mismanaged Petty Cash – It’s important to set up a system for petty cash management so you can track these expenses. You might start with buying a cash box for your office specifically for petty cash and writing receipts for any disbursements.
Developing a system for routine record keeping may seem daunting, but it’s the best way to protect your business finances. If bookkeeping just isn’t in your wheelhouse, hiring a professional bookkeeper may be the way to go. Contact us at Balanced Bookkeeping of NC to see how we can make managing your business finances easier!