Bookkeeping Mistakes by Small Businesses
Bookkeeping is a core part of a business. Successful bookkeeping can make for a successful business. From one-person entities to major corporations, bookkeeping is a significant part of any business endeavor. While it is typically not one of the more glamorous jobs, bookkeeping is at the heart of a company’s success, and errors can cost the company significantly. But if you as a small business owner do not necessarily understand the process of bookkeeping or do not completely know how your bookkeeper handles your finances your business might not have a long future ahead. Below are common mistakes that should be avoided while employing the bookkeeping process.
Not Saving Receipts!
Small business owners will sometimes pay for expenses out of pocket with their personal funds then make the mistakes of failing to track these expenses save receipts, all receipts, not just the big ones. While small purchases may seem mundane, they add up. These receipts will also provide backup documentation when you claim all your tax deductions. Keep a folder throw them in there and before you know it that folder will be full.
Doing It Yourself
Don’t do your book keeping yourself. You run a business, you are busy enough. However, many small business owners insist on handling their books themselves. However having a knowledgeable bookkeeper coming in to handle the books is greatly beneficial for a business. They possess the skills to do the job quickly and efficiently giving you more time to handle everything else that is on your plate.
Incorrectly Filing Employees
There are tax filing rules and regulations that are different for employees and non-employees. Because of the rise of independent contractors, consultants, and freelancers sometimes it can be problematic to determine who is on staff and who is not which can result in misfiling when it comes to your taxes.
When employing someone to handle your bookkeeping you should keep constant communication with them. While it is their job to keep up with the books, at the end of the day it is your business in their hands. In order to ensure that the bookkeeping is done effectively make sure you are keeping your bookkeeper up to date with all financial transaction so they are able to file efficiently.
Whether you’re bookkeeping is done manually or electronically it is important to back up your books. You should keep an updated paper trail and have your back up readily available to you in case a problem arises.
Not Deducting Sales Tax
Make sure sales tax is deducted from total sales, this is a mistake that is commonly made in businesses. If you do not deduct it your total sales will be higher in your final calculations than it should be.
Bookkeeping service in Long Island
Goodbookkeepersoncall.com (or simply GBC) was founded in 2016 as a division of Nazaire & Co, an accounting and business consulting firm located in Garden City, New York. Our services include remote bookkeeping, QuickBooks assessment or troubleshooting, installation, setup and training, all with the goal of assisting our clients in navigating the financial obstacles that come with running a business.