4 Common Accounting Mistakes That Can Put Your Business at RiskBrian Jang ON April 25, 2016
Accounting is a major factor in the success of any business. And the more a business grows, the more challenging and complex managing a company’s finances can become. So, if you decide to handle your own accounting, you might be making a huge mistake that can put your company in the red. Here are some common accounting errors business owners will want to avoid.
Failing to separate business and personal finances
A common mistake that many new business owners make is neglecting to separate business and personal finances. It might not seem like a huge deal when you are first starting out, but it can cost you big down the road. One of the first things you should do when your business is in its infancy stage is open a separate business account. This will enable you to keep a more concise record of all your business income and expenditures, helping you take advantage of valuable tax deductions.
Neglecting to record small transactions
Regrettably, countless small business owners fail to keep track of minor expenses, thinking it won’t amount to much. No matter how insignificant, those little business transactions can add up over time. Before you know it, you will have accumulated a sizable amount of tax-deductible business expenses. What’s more, staying on top of the smaller expenditures will make managing the larger ones much easier.
Overlooking cash expenses
Although it is fairly simple to keep track of credit and debit card transactions, cash payments are easy to ignore. Forgetting to record cash expenses is a common slipup for many business owners—a mistake that could wind up costing you a lot come tax time. So, make sure to create an effective system for tracking all your cash expenses. And remember, always ask for a receipt.
Trying to do everything on your own
When it comes to starting up a business, many entrepreneurs have to wear a number of different hats. Handling your accounting yourself, however, might not be in your company’s best interests. While it is important to cut expenses whenever you can, just one small mistake could cost your business money. If wearing the hat of an accountant is not a comfortable fit, hiring a professional will free up time and save you money in the long run.
If you are hoping to avoid these costly mistakes, contact BCJ, Chartered Professional Accountants today.
- Who Can Claim Moving Expenses?
- What are the Implications of Being Declared a Personal Services Business?
- How to Charge Provincial Sales Taxes on Online Sales
- Why You Should Rethink Your Accounting Strategy
- What Can Happen If You Submit Your Taxes After the Deadline?