Are you bad at bookkeeping — and would you know if you were? Accurate bookkeeping is a cornerstone of business success, and even the smallest inaccuracies can substantially disrupt your company’s potential. Take it from the experienced bookkeepers at TheOfficeSquad, we know all too well that errors can snowball out of control. Before you know it, everything from your cashflow to taxes may be inaccurate, leaving you to wonder what went wrong.
Common Bookkeeping Mistakes
There are many reasons bad bookkeeping is a serious concern, but these five should immediately catch your attention.
- Inaccurate Balances First thing’s first: you need to keep track of every cent you have. Inaccurate tracking of your income and expenses can result in an inability to pay your employees, bills and suppliers on time. If either of these parties is left without their timely compensation, it can severely harm your professional reputation, which can be even costlier down the line.
- Difficulty Spotting Errors Will one bookkeeping mistake doom your business? Of course not. However, a single mistake can be easily overlooked. It may be months, or even a full fiscal year, until you spot the errors that are preventing your books from balancing correctly.
- Effortless Increase of Errors Once errors are made, it’s also easy for them to snowball into more errors. For instance, one inaccurate figure reported in a single week then impacts the month, which impacts the quarter, and finally, impacts your annual reports.
- Tax Issues Where do all of these errors really become troublesome? On your tax forms. If an IRS audit uncovers any inaccuracies, you could be penalized. On the other hand, good bookkeeping practices can actually produce better records that ensure you’re getting the maximum from your tax refund.
- Business Uncertainty Ultimately, your bookkeeping is one reflection of your business’s financial health. You need accurate reports to make informed decisions about your business. Relying on inaccurate information could steer your business in the wrong direction.
Thankfully, accurate bookkeeping isn’t out of reach. Business owners have two options when it comes to tracking finances: learning how to take care of it in-house or outsourcing it. There are multiple resources that help business owners learn how to correctly manage their books, including training in QuickBooks. You could also hire an experienced bookkeeper to work alongside you. Alternatively, you could outsource your bookkeeping services to a dedicated team. TheOfficeSquad’s bean counter extraordinaires are ready to responsibly manage your books the right way. We can help with everything from accounts payable and receivable to generating monthly reports and managing your payroll. Contact us today and leave those bad bookkeeping days behind!