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Do you already have a bookkeeping system in place? If you don’t have one yet, your business accounting could be in big trouble. There is no better way to have a strong bookkeeping and accounting system in place than now. Not only will it make managing the accounts easier, but it will also help you pay your taxes on time and without delay. After all, poor bookkeeping means poor financial management and that’s not how you want to run your business, right?
How do you make sure you are doing your bookkeeping right? Here is a list of mistakes that you could be doing. If the current practice that you haven’t isn’t listed here, you are on the right track.
· First, are you shoebox bookkeeping? You know that you are if you are if you practice putting off all the listing of the finances like how you put all the paperwork in the shoebox. Although referred to as shoebox bookkeeping, this isn’t booking keeping at all.
· Second, are you still using the manual method of accounting? Although the manual process, including the simple use of the spreadsheet, allows you to make a list of the flow of money, it, however, fails to help you identify where the money comes from and goes to. The complicated process of tracking the movement of finances from multiple accounts can be quite tough. It is best to utilize a bookkeeping software that does the job for you.
· Third, not being involved in business processes including the financing could put you in deep trouble. Although it is natural to delegate tasks, it is not always a good practice to ask others to do your financial report and simply have to sign it be involved and learn the process. Even if a professional accountant is doing the work, it is best to learn from what they do to gain a better understanding of what it is you still need to be done.
· Fourth, refusing to reconcile accounts at regular intervals could spell out a financial disaster. Remember that it is best to match the statements in the general ledger to the official business accounts that you have. This may be a simple step, but it allows you to save yourself from bookkeeping mistakes that could cost you your investment.
· Lastly, sticking to the DIY attitude is not going to be helpful at all. Making errors in the accounting system of your company could have huge implication for the success or failure of your business. This may perhaps be considered the most significant mistake a business owner can make.
Save yourself from all the trouble and hire a professional accountant today!