Balancing the books probably ranks low on the list of tasks you look forward to undertaking each month. Nevertheless, unfortunately it’s an inescapable part of doing business and is something you have a duty to stay on top of, no matter how large or small your commercial outfit. It’s also in your best interests to do this, since bookkeeping mistakes can lead to significant financial consequences and expenditure.
Common Bookkeeping Errors
Here are some of the errors we’ve seen cropping up frequently over the years, along with advice on how you can prevent your business from falling prey to the same blunders:
1. Failing to file receipts and expenses.
While this requires effort and can feel unimportant during busy periods, organizing your receipts and tracking expenses in the correct categories is crucial for justifying deductions and reimbursements you claim. It’s part of managing payroll for the company. Create a system for doing this consistently, and make sure your team is fully briefed too.
2. Classify employees incorrectly.
It’s vital to correctly distinguish between non-employees (such as independent contractors, freelance workers and consultants) versus employees. Different rules and classifications apply to these groups of workers, and getting it wrong can result in misfiling taxes.
3. Failing to reconcile your books with your bank statements.
This must be done religiously on a monthly basis, in order to protect your final exposure and avoid getting into potential difficulties further down the line.
4. Neglecting to maintain records.
You would be surprised at the problems potentially caused by not keeping a paper trail of documentation, including financial statements, which may be required for audits and tax returns. This includes having a backup system for electronic records, which are always susceptible to corruption or loss.
5. Avoiding the help of experts.
The ins and outs of bookkeeping are complex, and running a business can be overwhelming enough without having to worry about compliance. There’s no shame in delegating all bookkeeping services to professionals, who are adept at quickly and efficiently handling what’s required, as well as spotting and alerting you to past bookkeeping mistakes and accounting discrepancies.
Looking For Professional Bookkeeping Services
If you’re on the lookout for professional and affordable bookkeeping services, Larry L. Bertsch, CPA & Associates has been a trusted member of the accounting community since 1964. Take a quick peek at the full range of bookkeeping services we offer here, or call us at (702) 471-7223 to make an appointment or to schedule a free consultation.
