Finance and accounting is a primary business function. There are common areas when a mistake is made. Accounting is an area that most businesses manage with the necessary care following the generally accepted accounting principles. The accountants or the person responsible can easily look over that mistake. A mistake may cost you!
With the introduction of technology in the accounting area, there are new ways of doing things and also a new approach to handling accounts. Technology increases the efficiency in accounting. It may lead to some common accounting mistakes. In this article, some of the common mistakes are discussed. Are you making any?
7 accounting mistakes you might be making
1. Mixing business and personal finance
Failing to separate personal and business account is a common and sometimes dangerous mistake people make. There should be two different bank accounts, to avoid this. Read here for the reasons why.
2. Trying to do everything yourself
You started on your own and you did everything from making tea to marketing and even deliveries but you are now growing and that could get tricky. Here is why…
3. Hiring the wrong person
Finding the correct fit for your business is critical. Employees can build up your business but more importantly, they can break it down if they are not the correct person. This is especially true when it comes to the accounting role. Read more here.
4. Thinking that technology will solve everything for you
The notion of technology doing everything for you might cost you hence utilize both the technology and the services from an accountant. Why? Read here.
5. Avoiding automation
Some businesses will avoid changes and stick to the old ways of doing things.
6. Neglecting to keep expense receipts
That pile of slips you have just thrown away were important – here is why…
7. Failing to keep regular backups
Accounting information, whether in the computer in the office or on paper, should be backed up in a different location. The most common way to do a backup is in the cloud. Information can be lost at any time for various reasons. You don’t want to lose the accounting information. It is what guides the business operation. It is good to take your time and do regular backups. Read more here.
The above accounting mistakes could affect you if you do not pay close attention to them. This may eventually cost you and your business. It is always good to take action and prevent them. Most of the time hiring services from a professional accountant is what you need as they will help avoid these pitfalls.
Are you worried that you are making one or more of these mistakes, contact us to make sure.
This post was updated in May 2022.