Even the most minor bookkeeping mistakes can end up costing small business owners a fortune and jeopardising their company’s financial position.
One of the biggest misconceptions that small business owners can have is to assume that they don’t require bookkeeping services for small businesses because of their limited accounts, assets, or debts to manage. However, in reality, inadequate bookkeeping of any kind can negatively impact a company’s financial situation, restricting revenue growth and business expansion.
If you are a small or medium-sized business owner who wants to expand their operations, continue reading… We have compiled a list of bookkeeping mistakes that you should avoid. But before we get into that, let’s understand the following:
The Benefits of a Bookkeeping Service
- Small business bookkeeping consulting services help business owners avoid errors in their bookkeeping records and reduce the risk of costly outcomes.
- Small business bookkeeping services in Melbourne provide accounting expertise that ensures support which allows small business owners to focus on expansion and growth.
- By hiring small business bookkeeping in Melbourne, you can alleviate the stress of keeping track of records. Thus, opting for a bookkeeping service will save you time, money, and effort.
Bookkeeping Mistakes Small Business Owners Should Avoid
1) Not Devoting Enough Time To Bookkeeping
As we’ve already mentioned, one of the biggest mistakes made by small business owners is not dedicating enough time to bookkeeping. It is essential that you give every transaction the time and attention it needs to fully comprehend the details and ensure no room for errors, regardless of how big or small the transaction is. One tiny error on your bookkeeping can be costly to your business.
2) Not Keeping Small Purchase Records
Always keep track of all your business-related purchases both big and small if you want your accounts to match. It can be common to overlook one or two records, but persistently ignoring them can lead to costly mistakes for your business.
3) Failing to Keep Track of Reimbursable Costs
Reimbursable expenses are those incurred on behalf of your client. Most business owners forget to record them because they can be charged back to the customer.
This charge should, however, be linked back to the accounting records exactly like your other expenses. You also risk losing out on tax deductions.
4) Not Reconciling
A fundamental task is to match the account books to the most recent bank statement. To assess your financial situation, make sure it is done each month correctly and consistently.
5) Combining Personal and Business Accounts
Many small business owners make the mistake of not separating their personal and professional expenses into separate accounts. Small business owners who combine personal savings and business income can risk muddling their records, creating a confusing bookkeeping process.
6) Not Providing Adequate Funding for Each Project
Starting a project without understanding the potential costs involved is a detrimental way to end up spending more than you had originally planned.
You will find it challenging to restrict your spending if you don’t create a clear and concise budget. This can ultimately force your company to use its limited resources on projects that end up not providing a return on investment.
Understand your ROI and plan a budget for each project accordingly.
Contact Trendsight for Small Business Bookkeeping Services in Melbourne
If you lack the expertise and skills necessary to manage the finances of your small business or have trouble generating steady revenue, get in touch with Trendsight. Call us at 03 9344 1566 or send an email at email@example.com to learn more about our bookkeeping services.