Many businesses operate under the assumption that keeping good books is something that can be handled internally by their staff. The only problem is, if these staff aren’t trained accountants, they’re prone to make a whole host of mistakes when handling a company’s finances. Here are some of the top ones:
Failure to keep detailed records
Because your staff will be busy doing their jobs and running the business, they may not have the time to keep the kinds of records needed for your books. It could simply be a forgotten transaction here or there, or it could be a few weeks of unrecorded payments. Either way, your accounts will suffer as a result.
Even when using a calculator, human error is rife in the bookkeeping of the inexperienced. Pressing one wrong number can lead to all of your calculations going awry, which you might not be able to see until it’s too late. This could mean that you end up overspending, or even paying too little tax, which has serious repercussions. You need to take full responsibility for the information you submit regarding your books, so you need to make sure it’s accurate.
The same bank account
You might think it’s a smart idea to use the same bank account for your business expenses as well as your personal funds. After all, if everything is in one place it must be easier to keep track of, right? That’s not the case at all and having only one account means your finances can be very confusing. It might take you much longer to record your expenses and profit, or you might even get the amounts wrong completely. Always keep business and pleasure apart, both in life and accounting.
Hire a professional
The only way to be sure you’re not falling into any of these traps is by enlisting the help of an experienced bookkeeper. They’ll always make sure your records are in order, as this will be their sole purpose, meaning they’re not juggling lots of other jobs on the side. You’ll be able to trust their mathematical skills as well as their advice, so get in touch with Propeller Advisory today.