All businesses regardless of size will have to do bookkeeping. They can’t ignore this task because it can have a negative effect on their bottom line, if errors occur. One mistake in the accounting books may cripple a small business.

 

It is important to identify the common bookkeeping mistakes to avoid mismanagement and a financial disaster.

 

Failure to Reconcile Books

An important task of determining your company’s financial standing is books reconciliation. A mistake in reconciling may cause problems. Reconciling your accounting books gives you a glimpse of the amount of money you have at any time. You need to do this consistently and properly to avoid errors. This process requires attention to detail and an experienced eye to identify mistakes immediately. Experts on bookkeeping services for small business owners can help you with this while you focus on your business and productive work.

 

Mistake in Categorising

One of the mistakes that many small businesses make is that they either over-categorise or miscategorise. Small business owners often make the mistake of entering expenses into the wrong category or having redundant categories. This leads to confusion and errors in your accounting books. Seek assistance from an experienced outsourced bookkeeper to make sure your chart of accounts are clear and organised. They will also help you implement category guidelines to simplify your bookkeeping.

 

Errors in Monitoring Reimbursable Expenses

Negligence when it comes to monitoring reimbursable expenses may result in losses for your small business in the form of money or tax deductions. You can use apps or programs to make tracking consistent, smooth and up-to-date. Start a habit of monitoring expenses as they come instead of doing them all at the end of the month. Begin small to make the task more manageable. You can also hire experts on accounting services for small business owners to do this for you.

 

Misclassification of Employees

Today’s workforce now includes not just employees, but also freelancers and independent consultants. Some owners may misclassify who works for them directly from outsourced contractors. This may cause problems such as tax penalties. Be mindful when classifying your workforce whenever a project starts and ends. An outsourced bookkeeper can do this task of bookkeeping and classifying for you.

 

Doing it on Your Own

Bookkeeping is a time consuming and tedious task that takes away resources from productive work. As a small business owner, you are better off outsourcing this task. This allows you to focus all your attention, time and effort in growing your company and doing productive work.

 

We at Robookkeeper can assist you with bookkeeping and eliminate mistakes for this important task. See if any of our services can meet your needs. You can also contact us at [email protected] for more information.