Running your own business can be incredibly rewarding. There’s a reason that small business owners are consistently ranked as some of the most satisfied workers around.
That doesn’t mean this kind of work comes without many challenges.
Small businesses often have limited resources. One aspect of running a small business is bookkeeping, which involves keeping track of financial transactions such as sales, purchases, and payments. However, many small businesses make common bookkeeping mistakes that can have serious consequences.
What are some of the most common mistakes to be aware of and avoid in your own work? Read on.
Mixing Personal and Business Finances
One of the more common bookkeeping mistakes small businesses make is mixing personal and business finances. The smaller a business is, the more the lines might easily blur between these two parts of one’s life.
This mixing can lead to confusion when trying to keep track of expenses and can also lead to tax issues.
To avoid this mistake, it is a smart idea to keep separate bank accounts for personal and business finances. This can help ensure that personal expenses are not included in business expenses.
Losing Track of Financial Transactions
Another one of the most common bookkeeping mistakes small businesses tend to make is not keeping track of all financial transactions.
This includes cash transactions, credit card purchases, and even online transactions.
Failure to keep track of all financial transactions can lead to inaccurate financial statements, which can be detrimental to a small business. To avoid this mistake, it is important to record all financial transactions in a timely manner.
On top of that, you’ll want to keep organized records that are easy to look through and find information. This should be a basic tenant of your business accounting.
Being Unaware of Deadlines
There’s a lot to handle as a small business owner, and your mind isn’t always on accounting. It’s easy to fall behind on or be completely unaware of financial deadlines that will be important to your business.
This can include deadlines for filing taxes, submitting financial reports, and other similar tasks.
Failure to meet these deadlines can result in penalties and fines, which can be costly for a small business. To avoid this mistake, it is important to keep track of all deadlines and to ensure that all necessary paperwork is filed on time.
If you aren’t aware of what these deadlines are, or what the requirements are for your business, it’s important to educate yourself. Talking with a professional small business accountant can help.
Bookkeeping Mistakes to Avoid
If you’re running a small business, you’ve got a lot on your plate. Still, you don’t want to let this hecticness push you into a business accounting blunder.
The above are some of the most common bookkeeping mistakes made among small business owners. Being aware of these issues can help you to avoid them in your own work.
Need more help with your small business bookkeeping? Give us a call anytime for assistance.