Small Business Owners - And Common Bookkeeping Mistakes

Small business owners often take on the task of doing their own #bookkeeping to save money, but without proper knowledge and understanding, mistakes can be made.

Following are some common mistakes to avoid:

1. Not keeping accurate records: This can lead to missing transactions and incorrect financial statements.

2. Not separating personal and business expenses: Mixing personal and business expenses can cause confusion and can be difficult to untangle when it comes time to file taxes.

3. Not reconciling bank statements: Not reconciling bank statements on a regular basis can lead to discrepancies in your books and make it difficult to catch fraud or errors.

a) This also, can lead to bouncing checks if you don't know the amount of money in your accounts.

4. Not keeping up with invoices and receipts: Failing to keep up with invoices and receipts can result in missed tax deductions and incorrect financial statements.

a) If invoicing your clients / customers is delayed, your receiving payments also gets delayed. Cash flow can then become an issue.

5. Not utilizing technology: With so many affordable and easy-to-use accounting software options, there’s no excuse not to take advantage of the benefits they provide. Benefits can include:

a) Automated bank feeds vs manually entering all of your transactions.

b) #Multicurrency conversions automated between differing currencies.

6. Not staying organized: Losing receipts or invoices can cause stress and confusion when trying to keep track of expenses.

a) Also, if receipts have not been scanned and filed electronically, you may be disallowed deductions if audited.

7. Not budgeting: Not creating and sticking to a budget can result in overspending and financial difficulty for the business.

8. Not understanding tax laws: Not understanding tax laws can result in missed deductions, incorrect filings, and even penalties from the government.

9. Not seeking professional help: While it may seem like a cost-saving measure to do your own bookkeeping, seeking professional help can actually save you money in the long run by preventing mistakes and maximizing tax deductions.

By avoiding these common mistakes, small business owners can ensure their books are accurate, their finances are in order, and their business is on the right track.

If you have any questions regarding #crossborder bookkeeping, please do not hesitate to contact us and schedule a FREE 30 minute consultation.