Are These 9 Bookkeeping Mistakes Holding Your Small Business Back?
Although it isn’t unusual for those running small businesses to take on a range of different roles, bookkeeping shouldn’t be one of them.
Business owners with real vision choose to spend their time developing growth strategies, instead of organizing their books and tracking cashflow. However, financial records that are properly balanced and reconciled are essential for businesses of all shapes and sizes, and that’s where bookkeeping services in Coral Gables come in.
Helping you avoid inaccurate reporting, uncategorized expenses, or the missing of important tax deadlines, books that aren’t properly managed will slow a business down and encourage poor decision-making.
Here are 9 bookkeeping mistakes that could be holding your business back:
- Mixing your personal finances with your business finances
Blurring the lines between your personal and your business finances, is the quickest way to confuse matters when tax season comes around and you need to get your books reconciled. Personal expenses being run through a business account, will raise a red flag for the IRS.
- Classifying expenses wrongly
It’s easy to miss tax deductions when expenses are misclassified, and over time, these mistakes can amount to inaccurate tax filing and budgeting.
- Irregular reconciliations
Transactions can get missed, payments can be entered twice, and unauthorized charges might not be spotted when bank reconciliations are skipped. Over time, these mistakes can lead to tax problems, inaccurate cash forecasting and even fraud.
- Not tracking receipts
Business expenses must be justified with receipts, and if you can’t provide the IRS with them, they may well deny you the deductions you deserve. Proof of work and invoices are also required by auditors when business expenses are being justified.
- Neglecting bookkeeping entries
When bookkeeping entries aren’t accurately logged and categorized on a regular basis, it can lead to the missing of valuable financial insights into the overall health of a business. Up-to-date entries, provided by a professional bookkeeper, can help you make smart financial decisions and keep your books accurate and well-organized.
- Ignoring financial reports
For a clear picture of the financial health of your business, it’s essential to review cashflow and profit and loss statements on a regular basis. Ignoring them could mean you miss early warning signs such as slow-paying customers or overspending.
- Using bookkeeping tools without oversight
While bookkeeping software can help you organize transactions and process data, it can’t tell you when the figures don’t add up, or something is wrong. From missed entries to misclassified expenses, DIY bookkeeping can lead to costly slip-ups.
- Missing deadlines for taxes
Leading to interest charges, penalties and delays in refunds, missing tax deadlines can damage your cashflow and cause you untold stress. With ongoing professional tax guidance, you can prep your taxes quicker, be ready for deadlines, and limit the risk of expensive errors.
- Not seeking professional help early enough
If you wait until your books are in a mess, deadlines are being missed and you’re thoroughly stressed out, before seeking help from bookkeeping services in Miami, a big cleanup will be needed, and these don’t come cheap.
By seeking proactive bookkeeping and accounting help for your business, you can prevent minor issues from becoming massive problems.
Although there are many mistakes that businesses can make when not seeking professional help with their bookkeeping (or when they don’t seek help early enough), they are all avoidable with timely assistance. So, for accurate books that promote growth and control, your books are best managed by the pro’s.