Not all small businesses are considered a start-up; however, most of them are definitely just beginning to gain their footing, much so that they are prone to committing mistakes that may either make or break the future of their venture. Some of these errors have something to do with the numbers, specifically their bookkeeping.
If you happen to be the owner of a small business and you want to be aware of these common bookkeeping mistakes to avoid doing them along the way, you may take note of the following examples below.
1. Not Having a Reliable Accounting Software
The first bookkeeping mistake that you must avoid is to only rely on one or two people to do it for your business. While you may find a few small companies that still resort to the traditional way of doing their bookkeeping, today, you can find the availability of many software that can do the process more efficiently.
It is not just about having the software but rather being able to make good use of it.
2. Not Calculating the Cost of Your Inventory
When it comes to bookkeeping, you need to know your total inventory cost. You must keep track of it as you may be able to cut it down if ever it increases too much. Think of this as a way to monitor your company's spending as well.
3. Not Paying Your Taxes on Time
One of the common mistakes you must avoid is missing tax deadlines. If you wish to prevent paying up a hefty fine, you must pay your taxes on or before the due date passes.
4. Not Keeping Track of Your Expenses
Not keeping track of your expenses is a major offence against your business's earnings. If you fail to keep track of them, you might end up paying much more than expected.
5. Not Keeping Track of Your Receipts
When it comes to your business bookkeeping, you must not forget to keep track of your receipts so you can use them when it is time to file your taxes.
6. Not Checking the Quality of Your Software
When using accounting software to do your bookkeeping, you should install it and make sure that it can do what it is intended for. Remember, excellent software can do you wonders, but a faulty one may harm your business overall.
7. Not Separating Personal and Business Expenses
Many people tend to make bookkeeping mistakes when it comes to separating their personal expenses from business expenses. This may land you in a situation where you end up paying taxes on your business, but their equivalent deductions may no longer be allowed.
8. Not Reporting Your Company's Financial Records Correctly
Not paying attention to your company's financial records is another of the bookkeeping mistakes that you should avoid making. If you do not take note of them all, you may end up paying the wrong taxes.
In order to avoid making mistakes that can cost you in the future, it is essential first to study the bookkeeping aspect of your venture. While many businesses are indeed relying on the traditional methods, you can still see the availability of many software that you can use for your bookkeeping.
That said, you should choose one that can easily be used and understood by you and your employees, in general. Take note of the mistakes above and avoid committing them all.
If you are looking for an experienced accountant for eCommerce businesses, look no further than our experts here at The ECommerce Accountant. We offer a wide range of bookkeeping services that will surely keep your business’s numbers back on track! Call us today and let us manage your venture’s bookkeeping for you.