Common Bookkeeping Mistakes To Avoid
Like many business owners, you may believe that bookkeeping is fairly a straightforward procedure and fail to spare the adequate attention it deserves. As a result, poor bookkeeping and accounting practices can have a negative effect on the financial health of your business. And in many cases, these recurring bookkeeping mistakes can lead your business towards insolvency.
Therefore, to help you avoid the financial headaches that come with bookkeeping mismanagement, the bookkeeping expert at Your Ledger Pro has put together a list of the most common bookkeeping mistakes you should avoid.
1. Failing to reconcile bank accounts
Reconciling ensures that the balances on the books are right and allows you to track your company’s financial position precisely. Ensure that the books are reconciled at least once a month.
2. Not classifying employees correctly
Many businesses often have a combination of both employees and independent contractors. If you’re one of them, make sure these are properly classified to avoid misfiling and overpayment of taxes.
3. Hiring an inexperienced bookkeeper
It can be very tempting to hire a bookkeeper who is just starting because they will offer lower service rates as they are looking to build their business. However, it’s crucial not to be tempted to save a few dollars by hiring an untrained bookkeeper. Hire a bookkeeper with experience in your niche. They’ll have bookkeeping tips and tricks up their sleeve, specific to your industry. And they should be able to get your books done faster.
4. Mixing business and personal spending
It’s imperative that business and personal expenses are recorded separately at all times, irrespective of the size of the organization. One of the first things you should do as a business owner is to open a business account and keep all of your business income in it.
5. Wasting too much time by doing it yourself
Like many business owners, you may try to do the bookkeeping yourself where you could end up wasting precious time. Although we all know that time is money and time is extremely important to your business, you need to leave such tedious and time-consuming bookkeeping tasks to the professionals.
6. Putting it off until the guilt drives you crazy
Nobody actually enjoys bookkeeping. But if you wait until your shoebox is overflowing with receipts and your guilt forces you into a bookkeeping binge, there are some serious consequences.
To avoid these and other mistakes, reach out to the expert at Your Ledger Pro. My goal is to provide bookkeeping services to help entrepreneurs gain the information they need to make informed financial decisions. Because I believe that automating accounting operations would free up crucial time for business owners, my services are based on a mix of accounting expertise and the ability to use relevant technology solutions.
I offer services like QuickBooks online, bookkeeping and payroll services, tax preparation, and business income tax returns. I offer my services to clients across College Place, Walla Walla, Benton City, Richland, Kennewick, Connell, Dayton, Washington, Hermiston, Pendleton, Oregon, and the surrounding area.