Anyone who runs a small business can tell you it’s no cakewalk. Between the constant strategizing, never-ending to-do list and maintaining day-to-day operations, it’s no wonder that every now and then, things can fall through the cracks. Our team at Yeater & Associates, CPAs wants your small business to be as successful as possible, so today we are sharing some easy accounting mistakes to avoid:
Getting Rid of Receipts
We can’t stress this enough – never throw away a receipt until it’s been properly tracked and filed. Should you come across any gaps in your accounting, it is crucial to have easy access to all your receipts to solve the issue. Plus, if your business gets audited by the IRS down the road, you will need proof of your transactions.
Not a fan of the paper trail? We don’t blame you. Try one of these small business apps to track all of your receipts safely and digitally.
Not Recording Every Transaction
Having enough hours in the day can sometimes feel like a pipe dream to small business owners. Still, it is important to make enough time for keeping up with the books. Be sure to record every single transaction – no matter how small or seemingly unimportant – so that you always have a solid idea of your business’s financial state. To avoid missing transactions, set aside a period of time at the end of every day to double check your accounts so that you can catch any mistakes early enough to fix them.
Blending Business and Personal Finances
Business finances and personal finances should always be kept separate. Mixing up the two can create quite the headache when tax season comes around. Plus, you may miss out on some easy tax deductions that are granted to business owners.
In order to avoid this common but detrimental error, open a bank account that is solely tied to your business so that you have a designated credit card to use for all business purchases.
Failing to Budget Out Every Project
It’s no secret that some projects and financial undertakings can wind up costing a bit more money than originally planned. Depending on the severity of such scenarios, having a loose budget can cost your business a significant amount of cash. Before embarking on a project, carefully budget every expense, conducting research to stay as accurate as possible. Be sure to consult your budget frequently throughout the project to ensure a strong financial outcome.
Avoiding Accounting Technology
While in many situations, we could agree that there’s “no school like old school,” this phrases does not apply when it comes to managing your small business’s finances. Handwritten books are great for backup, but they can easily become damaged, misplaced or stolen. Using digital accounting programs and apps will not only make your life easier, but it also increases the security of your finances.
Turning Bookkeeping into a DIY Project
Taking on too many tasks is often a small business owner’s greatest weakness. Between meetings, phone calls, and emails galore, solely managing your business’s accounting can be overwhelming. Relinquishing control is tough, but it’s worth it to know that a professional is handling all transactions and keeping a close watch on your company’s finances.
Need a professional team of CPAs to advise and assist with your business’s finances? Call our accounting professionals at Yeater & Associates to get started – 970-378-4830.