Even if you’re a professional accountant, mistakes happen. So if you are running your business and trying to perform accounting tasks at the same time, mistakes can easily occur if you’re in a rush or have too much on your plate. However, when you keep the following mistakes in mind, you might be less inclined to make them.
Misclassify Expenses
If you’re using accounting software that does not allow you to enter your data into the program easily you might be more apt to misclassify expenses. This is a problem because your software is supposed to give you an accurate picture of your business expenses so you can make sound business decisions. Remember to scan your expenses periodically to ensure that the information appears reasonable. One way to prevent this problem from occurring is to switch software platforms so that applying expenses can be done automatically.
Paying Vendors Twice
As silly as it seems, paying a vendor twice is a common problem particularly when a business has a large number of vendors or more than one person is involved with the accounting functions. Forgetting to check for open credits before you send payments to vendors could be costing you extra money. One way to ensure that this doesn’t happen is to purchase accounting software that allows you to provide an A/P Aging report. If the values in this report seem odd when comparing it to others on the report then there could be a problem. Be sure to read how to make a pro forma here.
Losing Receipts
Even if your bookkeeping software is error-free, you’ve got to have receipts to back it up if you’re ever audited. It’s simply good accounting practice to keep diligent track of all paperwork including receipts. If you’re receipt bin is looking cluttered, take time to straighten it out; you’ll thank yourself later.
Failing to Ask for Help
If you run into a snag and don’t seem to know how to get out of it, you’re not doing your business any favors by failing to hire a professional to help you fix the problem. Sometimes you have to seek the services of a professional accountant if only to prevent small problems from becoming giant ones. You may even be able to learn a few tips so that such problems don’t occur again.
If you can avoid these common mistakes, you’ll find that your accounting tasks will be a lot less daunting. Keeping track of your business numbers is vital when running a business, so follow these tips to avoid these accounting missteps.
Sources
1. Red Wing Software, “Accounting Software–What Matters Most?” http://www.redwingsoftware.com/Blog/post/2011/01/07/Accounting-Software-What-Matters-Most.aspx
