Common Mistakes in Accounting

A mistake in accounting is not very unusual. Small to medium sized companies, even sometimes a big organization can see errors in financial report. In most of the small business organizations accounting reports come with errors in mathematical data calculation, inappropriate data entry and many more. A single mistake in accounting data can show financial loss, may lead to business reputation issue, and many ways your business can easily get spoiled.

In small business organizations the most common accounting mistakes are as below –

Not Keeping Track against Invoices – Every time you receive a payment from your customer you should keep the record against that payment invoice as ‘paid’. Many small business owners could experience such type of accounting mistakes. Due to get involved in some other work they might forget to update the payment status in their accounting book. Later at the time of reconciliation you or your accountant could unable to match the data with bank statement. As a result you’ll become frustrated and waste lots of time in searching, updating and matching the data with bank statement. There are so many software available in the market having high proficiency in accounting that can automatically update your invoice data along with payment status. It’s a great way to reduce your work load and save time. 

Not Keeping & Filing Expense Receipts - Your day to day business expense, payment receipt copies, expense bills etc. are the vital proofs you should submit at the time of taxation. Unavailability of any such document can create problem for you. But sometimes it could be difficult for you to keep all the receipts, bills etc. In such case accounting software can play a very significant role for you. It can store all your bills or payments info with all related details. So later whenever you need to check any data you can simply check out the details from database.

Mixing personal & business expense – Many business owners use personal bank account for business transaction. It’s not a good practice at all. You shouldn’t mix your personal account with business; otherwise later you might come with incorrect data reporting. 

Hiring less experienced accountant – If you work with less experienced professional then you might be playing risky games. A person with lack of work experience can hardly provide you problem solving suggestion or can hardly guide you properly to make business profit. You should always go for hiring the right accountant having years of experience. Keeping an experienced guy can cost you more but the person can offer you right suggestion for taxation, provide you customized data analysis report and can help you to make right business strategies for you. If you want to get high quality jobs and reduce costing then buying a quality accounting software can be the best suggestion for you. Getting a quality software can be quite cost-effective than hiring an expert accountant for taking care of all your financial transactions.

Accounting work in traditional ways – Many small business organizations still do their accounting work in traditional ways with papers. Such type of work is quite time consuming. Making mistake is quite common while doing calculations with lots of accounting data. But doing all such work with business accounting software can offer you error free data report and saves your time a lot.