Common Mistakes Business Owners Make With Bookkeeping
Bookkeepers are heroes for those who are clumsy with keeping their financial records. They can also assist with preparing financial reports and statements, making it easy for one to pay bills and invoices.
If you face trouble managing your finances, hiring a professional bookkeeper is the best choice. They can plan and budget for future financial needs by providing advice and guidance on financial matters.
To help you avoid some basic errors that could prove costly, Robin Loupus Bookkeeping has put together a list of the most common mistakes business owners make with bookkeeping.
1. Mixing personal and business funds together
When it comes to tracking business finances, the easier way is always better. When a business owner is always attempting to determine which purchases were commercial and which were personal, it may make an already difficult task even more difficult. It is also tough to keep up with business purchases made out of personal accounts, leaving potential tax deductions on the table. Not to mention that the IRS can get irritated when money is mixed.
2. Not maximizing deductions
Did you know that your start-up costs can be deducted from your taxes? Clients tend to overlook deductions that are forgotten about when filing business taxes each year. Keeping track of your expenses can help catch these deductions.
3. Not using technology appropriately
There are numerous cloud accounting platforms available today. All are intended for small and medium-sized business owners. These programs help track expenses, income, receipts, invoices, etc. All are entirely portable and may be used on smartphones, PCs, or other app-enabled devices. For example, QuickBooks Online allows you to photograph all the receipts and keep them in the cloud. This is extremely useful in the case a company gets audited. These apps make it simple to keep track of finances on the go, and everything is done in real-time!
4. Mismanaging cash in a business
Fewer and fewer businesses are operating on cash, but it is still being generated and transferred. Cash handling is a tricky business. Cash payments should be accompanied by duplicate receipts and recorded to the deposit. Cash should never be taken out of a bank account unless there is a specific, documented justification. Due to the lack of a paper record, it is not suggested that you make ATM cash withdrawals from your firm. Money should be sent via cheque or wire transfer to a personal bank account.
Payments to others should be made by online bill payments, ACH, bank account funds transfer, or checks. Check the restrictions for conducting business using cash transfer apps like Zelle, Cash App, PayPal, Venmo, etc.
5. Not hiring a professional
We live in the age of DIY, but some things are just better with a professional. A business owner can avoid the mistakes mentioned above and costly errors by hiring a professional. Accurate bookkeeping in a small business is crucial to the business’s survival. At Loupus Bookkeeping, we take the guesswork out of your finances to help maximize your potential!
To avoid these and other mistakes, reach out to the experts at Robin Loupus Bookkeeping.
Our services include bookkeeping, payroll, accounts payable/receivable, QuickBooks training, advisory services, household staff payroll, and budgeting.
We serve clients across Gastonia, Belmont, Mount Holly, Charlotte, Huntersville, Norman, Lincolnton, Lake Norman, Dallas, Shelby, Pineville, Matthews, Weddington, Denver, North Carolina, Lake Wylie, Rock Hill, Fort Mill, York, South Carolina, and the surrounding areas.