Most Common DIY Online Bookkeeping Mistakes

If you’re a small business owner that does your business bookkeeping, you may be looking to save money and cut costs. Or you’re probably one of those curious people who enjoy learning how things work, or even find it valuable to understand the process.

Anyone who has ventured outside of their expertise has probably felt some fear that they’re making mistakes. And if their mistake were to become an issue, would it be a quick-and-easy fix, or will it come at a major cost? Accounting errors can end up being costly if you don’t catch them right away. And if you skim over them, you run the risk of filing incorrect tax returns, which, if uncovered in an audit, can cost you a lot of time and money.
Here are the five most common bookkeeping mistakes accountants see clients make.

Mistake 1: Mixing Business with Personal

A lot of people don’t understand the negative side of mixing their business and personal finances. If they use any bookkeeping software to keep track of their expenses and income, they’re probably under this impression that it’s OK to commingle.

Here’s the thing about commingling: you’re creating more work for yourself, which means you’re wasting your precious time doing bookkeeping. You are also increasing the chances of making a mistake. If you have more transactions to keep track of, there are more chances for errors.

 

Mistake 2: Missing Transactions

Missing transactions happen. Sometimes the data feed from your bank to your bookkeeping software gets disconnected, and a transaction might not get recorded. Or you could accidentally delete a transaction that you thought was a duplicate. You can also accidentally duplicate already recorded transactions.

Missing transactions can create errors in your records. And errors in your reports mean that your data is incorrect. You don’t want to be making business decisions with inaccurate data.

 

Mistake 3: Falling Behind

If you’re a small business owner who does their own bookkeeping – in addition to everything else – it’s easy to gloss over the bookkeeping piece. It’s easy to tell yourself you’ll deal with the books later. But if you don’t keep up with making sure your records are accurate, then you’re trying to run a business without having your eyes on the right data. You’re flying blind.

Mistake 4: Not Reconciling Every Month

Reconciliation of your bank accounts, credit cards, and loans is one of the most basic accounting procedures. It’s critical because it’s a way to make sure your balances match. If your balances don’t match the bank, credit card, or loan statement, then that means there is an error somewhere. You want to do this every month to ensure that your records are accurate from month to month. If they’re off, making business decisions and potentially paying quarterly taxes or sales taxes based on inaccurate data.

Mistake 5: Not Hiring an Expert

Bookkeeping is not for everyone. Are you good at something that not everyone else is great at? Maybe you’re a graphic designer who is excellent at navigating Adobe Illustrator. You know the shortcuts and you’re basically fluent. Not only are you excellent at navigating the tool of the program, you understand the fundamentals of design. You’ve been doing this for ten years, which means you’ve made a lot of mistakes. All those mistakes and all your experience have shaped your skills at executing a design.

An experienced bookkeeper has the experience. They’ve built their skills, they understand the fundamentals, and they’ve made the mistakes so that you don’t have to.

If you’re looking for a bookkeeping expert, we’re here to help.

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