Whether you are a large corporation or a one man business, bookkeeping is an integral part of any business endeavor. It is at the foundation of any company’s success and errors here can cost the company significantly. With that said many small business owners get bookkeeping wrong more often than you would think.
Below are 3 common mistakes small business owners often make that can compromise the financial state of their business.
1. Not saving receipts for purchases. Receipts for purchases provide backup documentation for the many of the tax deductions you can claim, and will likely be required during an audit. One easy way to keep track of these is to use a named folder such as receipts. Another way to keep track is to use an online document management application such as LedgerDocs to store and share all receipts efficiently regardless of your location.
2. Failing to track reimbursable expenses. Small business owners often pay for expenses out of pocket or with their own personal credit card and then forget to track these expenses and to submit them to the company for reimbursement.
3. Doing it yourself. Many small business owners insist on handling the books themselves. However, if you are not qualified or skilled to keep your books accurately, hiring a competent bookkeeper can be extremely beneficial (and not to mention stress relieving). By hiring a bookkeeper, you have someone who is qualified taking a look at your books and you will also have a second pair of eyes to find errors and make suggestions. They can also prepare meaningful financial reports that can help the owner to make better business decisions. These days, hiring a bookkeeper is very affordable and with the rise of the Internet several companies like LedgersOnline offer their bookkeeping services online and that makes bookkeeping more efficient and affordable for small business owners. And not to mention, allows them to finally focus on the tasks that actually bring in the money.
We provide customized bookkeeping services for your business.