Love it or hate it, accounting for a business can never be ignored. It’s just one of those much-needed money management things that need to happen. Whether you run a large corporation, a small team, or you’re doing everything yourself; you need to have your bookkeeping and accounting all properly in place. Mistakes happen.
They are inevitable and unavoidable in the process of accounting. However, these accounting errors are inevitable and can be costly. There are a number of mistakes that accountants make, which could lead to an accounting error. No matter the size of your business, this is something that could land you in deep water. So, here are some common mistakes that could happen during an account that could potentially cost you!
Incompetence on behalf of the accountant
Whether you hire someone, such as doing 1099 filing services, or you’re opting to do this yourself, incompetence can happen. Maybe you hired a student in training to help you out, or maybe you just don’t know what you’re doing. Regardless of what the case is, this can could a lot of mistakes that will cost you. It’s so important to hire someone or even an agency that is well versed.
The accountant is not given enough time to complete their work
Another aspect that should be taken into account would be hiring an account or bookkeeper and rushing them to get the job done. Some businesses will push to do their taxes last minute; this is something that you should absolutely try to avoid doing at all costs!
Accountants may also be responsible for invoices. But what is invoice processing? This is essentially billing, and you can use automation to reduce the workload of your employees.
Not having a complete set of books on hand
Essentially, this means that the accountant (including yourself if you’re DIYing) doesn’t have all the needed resources on hand. This is a surefire way to create some errors.
Not keeping track of all the transactions in the company’s general ledger
All business-related expenses need to be kept; this includes all the invoices and all receipts. This is actually a common mistake that business owners make. You’ll have to keep a record of all of your purchases.
Using the wrong accounting software
This rarely happens, but there are some platforms that seem to be far less reliable compared to other ones. So, make sure if you do choose to use software for accounting purposes, whether it be to keep track or to file, that it’s one that is highly regarded and reliable. So, make sure you do your research, or this could potentially be something that can cost you and your business big time!
Throwing away notes or records without keeping them safely stored
As stated earlier, some business owners will immediately toss out invoices or receipts. In fact, some will throw away records altogether. By any means, this is something that you need to avoid. Instead, keep all the items organized. You could even scan any forms and keep them in a folder. Digitizing your notes and records can help you a lot as they’re more than likely to stay safe.
Using old-fashioned paper instead of digital records
While some people prefer to go the old fashion route, this needs to end. You’re far more likely to have errors if you go about it this way too.