Small business accounting mistakes can cost you and make it harder to make solid decisions for your operation based on your company’s financials. Below are some of the most common small business accounting mistakes we see and how you can avoid them.
- Improper recordkeeping—No one likes the mundane tasks of filing and recordkeeping, but for the sake of your business’ financial health, it’s something that has to be done. Although digital technologies have eliminated the need for filing cabinets, this doesn’t mean that keeping proper records is an obsolete practice. Put as much care into managing your digital records as you would with your paper ones.
- Overstating revenue—If you use bank feeds to enter data or issue invoices to your customers for payment at a later date, it is incredibly important that you do not overstate your revenue. Without the proper systems in place, many businesses can easily show revenue at an amount nearly double of the actual revenue shown on their profit and loss statement.
- Relying too much on automation—Many small business accounting practices have been simplified because of automation. And although automation is helpful, it is not infallible. Watch for transactions posted to the wrong expense accounts, transactions with the incorrect payee listed, and distributions posted as a transfer to your asset accounts.
Our goal is to help you avoid common small business accounting errors like these. For more information, contact us at DKC Financial Inc. today.