There are many tasks and duties you may have to fulfil as the owner or manager of a small business, and bookkeeping may not be one of your favourites. This is entirely normal, as not many of us are adept or well-versed in bookkeeping, and it’s often seen as a tiresome endeavour fraught with challenges and complexities. But if you are in charge of this task and want more than anything to do it right, one of the keys is to avoid specific common errors that many people make. So what are the top mistakes in bookkeeping small business enterprises make? More importantly, how can you prevent them? Let’s find out.
- Neglecting to record deductible expenditures
As a business owner or manager, it’s essential to keep track of everything – every transaction – including all your expenses, even if it seems minute. Seemingly small transactions and amounts can still add up over time, so make it a point to keep a record of all your deductible expenditures. It doesn’t have to be too difficult, either – write them down as you get the receipts, and make sure to ask for the receipt with every single transaction.
- Not keeping all receipts, no matter how ‘insignificant’
It’s related to neglecting to record all deductible expenditures – make it a point to keep all your receipts, regardless of how small the amounts are. You may be able to claim on these receipts come tax time, so it’s worth storing it all. You can place them in a specific box, file, or drawer and make use of them when the time comes.
- Neglecting to have backups of your data
More than a few business enterprises have made this mistake – and faced disastrous consequences. It’s also essential to have backups of your financial data on your computer because where will you be if your entire system crashes or breaks down? It’s easy to lose every business record if you don’t have a secure backup in place, so back it up as soon as you log it in, as recommended by accountants in central London at Griffin, Stone, Moscrop & Co.
- Trying to deal with bookkeeping all on your own
There is a certain ‘art’ to bookkeeping that most of us take for granted, but it’s a process that can take a lot of precious time (and patience). If you try to deal with your bookkeeping requirements independently, you may be doing yourself a disfavour. So do yourself a favour and seek help from a bookkeeper or bookkeeping service. By doing so, you can avoid more crucial mistakes and errors and save your time for other worthwhile endeavours.
- Not having hard copies
Whilst storing everything in an in-house system or on the cloud is already a given, it also pays to have hard copies of all your financial records. If the entire system fails or goes down, you will at least have your hard copies to which you can refer. Store them in a safe and secure place.
- Not being careful with your petty cash
Small amounts of cash may seem insignificant, but they can also add up. So take better control of your petty cash and be careful with it – you never know when you might need it for a rainy day.
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