Bookkeeping is an extremely important task for every business owner. A quite tedious process, it usually takes up hours of time for business owners to document and maintain their books. This arduous process is one of the primary reasons why most business owners fail to keep their business finances maintained and updated on a monthly basis.
If you are also worried about keeping up with the bookkeeping tasks for your business, then all you need to do is to look for professional, reliable bookkeeper near you. Choose the right bookkeeping service to fix your bookkeeping errors and keep your books well maintained.
Poor or Improper Record Keeping
Improper record keeping is a common mistake for most small businesses. It is quite easy for businesses to lose receipts and forget about expenses that might seem insignificant. However, maintaining proper records and creating a filing system will not only save time, but also allow you to streamline income taxes.
Proper record keeping can provide all necessary documentation in case of potential audits, helping you save thousands of tax dollars in the best possible manner. It is essential that you maintain proper record keeping for your business on a monthly basis.
Blurred Lines Between Business and Individual Finances
Most business owners make the mistake of mixing up their business and individual finances. While at the start of your business, such mixed transactions may not appear to be crucial. As your business expands, the blurred lines between your finances could end up becoming a serious problem.
Therefore, it is important that you set up different accounts, as well as book records for managing your individual and business finances.
Improper Categorization of Expenses
Make sure you always track your business income and expenses in the right categories. If you lack adequate knowledge of formal bookkeeping and business expense categorization, then it is important that you consult a professional bookkeeping service. Their valuable, effective, and accurate bookkeeping services will help you avoid from landing yourself in a preventable situation.
Non-Reconciliation of Bank Accounts
If you do not have separate bank accounts for your personal and business activities, then it may become an issue for you. In case of a potential audit, you’ll be required to provide complete records of your business-related activities. Therefore, it is important that you set up different bank accounts to minimize errors and improve record management.
Revenue Declaration Before Actual Delivery
Declaring your business’ revenue before you even make the first sale, is a risky approach. Although it might make your finances look better, it doesn’t really help with demonstrating actual profits. Therefore, you must establish your profits before making any revenue declarations.
These are the 5 most common bookkeeping mistakes that you must avoid in order to help mitigate potential risks. For more information, call Virtual Jeannie Bookkeeping Services at (707) 664-1425.