Tips to avoid bookkeeping errors
Hey fellow business enthusiasts! Bookkeeping might not be your favourite part of running a business, but it's undeniably one of the most crucial. Having spent years in the trenches of virtual assistance and bookkeeping in NZ, I've witnessed some common pitfalls that many businesses stumble into. Let's talk about these blunders and, more importantly, how to avoid them.
Neglecting to reconcile accounts on a regular basis is one of the most common bookkeeping mistakes. It's so easy to slip behind when you're focusing on other areas of your business, but failure to catch discrepancies as early as possible will give you a financial headache later down the track. Set a routine for reconciliation to ensure your records align with bank statements.
Separating your personal spends from your business spends is crucial, we're all guilty of a sneaky weekend brunch on the business card! It happens more often than you would think but avoiding to use your business card for personal expenses will save alot of headaches when tax season comes around. I would highly recommend a dedicated business card and a dedicated personal card from the get go!
Using a digital tool for receipt management is a great idea when it comes to storing those pesky papers. A classic mistake is not keeping track of your receipts. I highly recommend a digital tool so you don't have to worry about keeping those bits of paper.
Receiving petty cash? Not keeping track? Classic mistake! No matter how small a transaction is, it is crucial to ensure you keep track of all petty cash transactions. This prevents discrepancies in your financial reports and also maintains accuracy.
Backing up your financial data is a no brainer. Technology is not always perfect and mishaps happen more often than you think. Using Dropbox or Google Drive for cloud-based solutions is a great idea and will prepare you for any unforeseen events.
Stay in the loop on latest tax laws and regulations! Regularly consult with your bookkeeper or accountant to ensure you're aware of any changes or updates from a reputable source - this will avoid any missed deductions or compliance issues.
Trying to handle your own books but don't have the correct knowledge? This is one of the most common mistakes I have come across throughout my 10 years as a bookkeeper. I can't begin to count the many financial mishaps I have come across and fixed (although one of my absolute favourite parts of my job!). Investing in a professional bookkeeper or accountant is crucial and the biggest tip I will provide in this blog post.
Steering clear of these common bookkeeping pitfalls isn't just about avoiding mistakes; it's about setting your business up for financial success. Take the time to establish sound bookkeeping practices, and you'll find that navigating the numbers becomes a smoother, less daunting task. Happy bookkeeping, everyone!
