So you think you have the accounting skills it takes to run a small or medium-size business? Good for you! However, there are still some things you should be aware of. You may not think much of these “little things”, but making the following accounting mistakes can cause you to lose that business you have been carefully building up for a long time.
Not keeping track of your receivables –A receivable or debtor is an entry in your books that is created when a bill for services is sent to a customer, and that is good. The problem is that sometimes you’re too focused on getting more work in the door you don’t actually get around to collecting your debtors and by the time you realise you are supposed to be getting those amounts, or that you actually have a fortune in uncollected revenue, it’s usually too late to save your business.
Not keeping your expense receipts – Yes, those little scraps of paper do matter. It might be tempting to throw them away once they’ve built up into a sizable and messy pile, but you have to resist this temptation. The best way to keep track of them is to file them away immediately; don’t leave them lying around looking like trash. We prefer electronic storage of documents, however, you can still designate a filing cabinet.
Mixing business and personal expenses – Your life should be more than your work and it can’t be avoided every once in a while you might have to turn to company money for some personal expenses. This is acceptable as long as you can tell which is which, but can your memory really tell one expense from another when you are in the middle of balancing your books? You come into some trouble if the tax man figures out some items listed as business expenses actually weren’t related to your business. The best way to avoid this is to list business and personal expenses separately or better still, try not to spend any company money on personal expenses.
Putting off bookkeeping – Ideally you should do this weekly, if you can’t then monthly. However, if you decide to do this every three months, or worse, once a year and just before the taxmen come knocking, then you are asking for trouble! Delay your bookkeeping and you run the risk of everything that has been mentioned above; lost receipts and files, uncollected income and misclassified expenses.
Not hiring a professional to handle your accounts – You may be competent enough to keep the books, but aren’t your energies better spent formulating strategies for your business and running your company? You can do so much more if you weren’t burdened by counting beans. Why not leave your books to professionals?
Speaking of professionals, Smartbooks Online is a professional solution that handles the above common mistakes. Smartbooks Online is run by accountants who have been in the business for years and know your time is better spent adding value to your business.
The Smartbooks Online system ensures quality and accurate results due to a rigid multiple-stage review system designed by professional accountants. They also make use of Xero, currently the fastest growing accounting software used by business owners and accountants in the world.
All you have to do is simply to keep all your records and mail them to Smartbooks Online, then let them handle the rest, it’s that easy.
There are many pitfalls you face when you have to do your own bookkeeping, but with Smartbooks Online you can be sure your accounts will always be in the right.