THE 6 WORST ACCOUNTING

MISTAKES SMALL BUSINESSES MAKE & HOW TO AVOID THEM

IntroductionAs a business owner, you’re probably taking up the responsibilitiy for most parts of your business.

One of those responsibilities is as a business manager. But then you’re also a consultant, a customer service representative, sales and marketing manager, and last but not least, sometimes your own accountant.

To help you out, let’s look at how to avoid these 6 common small business accounting mistakes so that you can make your business a success.

1. Business is personal

When you are a small business owner, it’s a big mistake to have your business and personal finances mixed up:

• it will lead to horrible accounting practices• you can get into tax authority problems• you won’t be able to accurately track expenses

Do yourself a favor and stop mixing those two types of purchases. You should have separate bank account for each and never mix the two.

Although your receipts are usually tiny white pieces of paper. However, this doesn’t mean you should discard them:

• you won’t be able to accurately list your business costs• you won’t have records for tax purposes• you can’t track your expenses or maintian your budget

When you’ve decided to save your receipts, don’t put them in an old shoebox. Instead, use online invoicing software that will allow you to upload an image of your receipt to the cloud.

2. No receipts

3. No payments received

Receivables, in accounting lingo, are crucial for accurate bookkeeping:

• it’s very important for determing cash flow• helps you keep accurate payment records• very important for your tax purposess

In order to record payments received, you’ll best use InvoiceBerry’s online invoicing software to quickly add payments from anywhere at anytime.

4. Overdue accounts

Although one of the more common and unavoidable accounting mistakes, it is also something that you can at least lessen:

• lower the payment due date from 30 days to 14 days• send out your invoices on time to the right place• follow-up on late payers and don’t let them off the hook

If you follow these simple steps, you should be able to collect payments faster and minimize your overdue accounts.

5. Not recording cash

Payments by credit or transfer are easy to record. However, when you get paid in cash, it can be much harder:

• always record your cash as soon as you get it• when possible, create a receipt as proof of cash payment• it’s generally important to track all revenue and expenses

By recording cash, you’ll make it much easier for you or your accountant when tax time rolls around.

6. Too much responsibility

Although you feel that you are responsible for everything (and you mostly are) just remember to delegate if possible:

• you can’t be good and thorough in everything• doing a lot of things means you’re not doing anything well• send out accounting services with many different options

At some point you’ll have to get professional help with your taxes, and so it’s important to remember that sometimes we all just need a little bit of help.

The 6 Worst Accounting Mistakes and How to

Avoid Them

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