Nowadays, it is common knowledge for all sorts of businesses to start paying attention to their finances because of how intrinsic it is to the success of one’s efforts—no matter what stage they’re in.
Regardless of how big or small your business may be, taking the time to keep track of your facts and figures will serve your desire to grow and succeed. The problem, however, is that the process that mainly revolves around dealing with finances—or the accounting process itself—isn’t the easiest or most effortless process around.
The main hurdle of small business accounting
Apart from the select few that actually love to dive into their numbers and ratios, the general consensus with accounting that small business owners share is that it’s a handful to deal with.
Although it can seem like such a straightforward process at first—as its mathematical work merely boils down to addition, subtraction, multiplication, and division—it’s far from being merely simple once you get into the details. In the case of small Australian businesses, in particular, the challenge of getting accounting work done right is even bigger because of the increasingly-difficult standards set by the Australian Tax Office!
With your business growing, and the need for a firm hold on your finances being even more important, there’s one specific aspect of small business accounting that you’ll need to focus more on: avoiding common accounting mistakes.
Common accounting mistakes you should avoid
Even though it’s common knowledge that mistakes are always going to be troublesome for any kind of aspect, it’s an especially detrimental outcome when experienced in the context of accounting. As a matter of fact, the smallest fumbles can easily thwart the progress that any kind of business is making, as these result in significant oversights, hefty fines, and company-killing penalties.
However, here’s the thing: avoiding mistakes isn’t as difficult as you might think because all it really takes is watching out for and recognising the most common ones! To give your business the head start it needs to stay a few steps ahead of figure fumbles, here the most common small business accounting mistakes you should avoid:
Mistake #1: Budgeting your finances poorly
As overplayed as it may sound, the way you budget will either propel your business to success or hold it back until it can’t move anymore.
Sure, going over your expenses from time to time and subtracting them from your profit may seem like a reasonable thing to do as you track your progress, but the truth about your standing doesn’t come until you budget properly. Unfortunately, many people overlook this key fact and become complacent, to the point where they’re not as sharp with their budgeting as they should be—leading to a lack of stability and huge losses, in the process!
Mistake #2: Being complacent with paperwork
You might not realise this at first, but effective accounting and good paperwork habits work hand in hand to give you the control that you need to best handle your finances. However, many business owners still neglect this fact, to the point where they put off their books and record-keeping responsibilities until they’re at a point where they can’t catch up.
Although it can sound quite tiring, taking the time to stay organised and stay updated with your paperwork is something you shouldn’t overlook—in fact, it doesn’t take more than half an hour a day to do so. If you start taking care of your paperwork and exercise the needed diligence to keep everything organised, only then can you make your accounting process feel a whole lot easier in the long run!
Mistake #3: Overlooking the opportunity to bring extra help in
As the maxim goes, “no man is an island”—it just so happens that this quote is especially true when it comes to dealing with accounting.
While you’d probably want to remain hands-on with most, if not all, parts of your growing business, it would be a mistake to not leave your accounting in the hands of an expert instead. For what would seem like an extra expense at first, hiring an expert like The ECommerce Accountant to help you out will eventually prove to be an invaluable investment because:
You get to avoid all sorts of costly mistakes that will minimise the potential profit that you make over time.
It becomes easier to minimise the risk of incurring errors that you’d make if you were to handle your accounting on your own without the necessary experience, skills, or training.
You’ll get to increase your profit margins after The ECommerce Accountant’s experts find more opportunities for you to save money and maximise your returns!.
As a growing business that is set on realising its full potential in the long run, it’s critical that you ensure that everything’s in order when it comes to your finances. Thankfully, you won’t have to worry about making any costly or inconvenient accounting mistakes as long as you stay mindful of what to watch out for along the way!
We’re an eCommerce accounting firm that assists big companies, online start-up businesses, and influencers all over Australia. Get in touch with us today to learn more about how we can help you stay up to date and on-track with your finances!