Five accounting mistakes that could put your company at risk
Accounting mistakes can be some of the most damaging events to happen to a company, whether it is a new start-up or a well-established firm. In some cases, accounting mistakes can compromise the future of a business. This is why, no matter the type of company you run or the size of your business, you need to handle accounting with care, accuracy, and professionalism. Read on to discover more about some of the common errors that are made by businesses.
- Failing to record cash expenses – If you make any purchases in cash, you need to track them so that they can be taken away from your total income when the time comes to do your tax returns. You can easily link debit card and credit card activity to your accounting software, or you can use online banking to track your spending. However, nothing can track cash apart from yourself. So, make the effort to do so, and, wherever possible, avoid using cash to make business purchases.
- Not staying on top of your receivables – This is undeniably one of the biggest and most damaging blunders made by business owners. If you do not keep track of your receivables and ensure you get paid on time, you could find yourself with huge cash flow problems on your hands. If you don’t keep track of your incoming funds, you will find yourself with large bad debts, overpaid taxes, and hours wasted while trying to update your list of receivables in time for your tax returns.
- Failing to keep expenses receipts – Another common error relating to expenses is the failure to hold onto receipts. If you do not keep copies of all receipts for business expenditure, you could experience cash flow problems, as well as issues with accounting and taxes. If you claim for expenses and you do not have the receipts to back them up, you could find yourself in trouble if your business is ever audited.
- Failing to hire an accountant to take care of your taxes – There are some small business owners who do their own taxes in an attempt to save money. However, if you do not handle your taxes correctly, you could find yourself with a bill for under-paid taxes. Moreover, you may be unaware of any deductions and rebates you are entitled to and so be paying more tax than necessary. So dealing with your own taxes may be costing you more money than you realise.
- Failing to get on the same page as your accountant – This is undoubtedly one of the biggest errors business owners make. They hire a chartered accountant to take care of things for them. However, they don’t actually understand much about their own accounts or the service provided by the accountant and don’t ask for an explanation. Here at Tuchbands we are known for our friendly, experienced and approachable service. We explain everything in a way that our individual customers can understand, and are focused on ensuring every business extracts maximum value from our service. Why not get in touch with us to find out more about how we can help you avoid accounting mistakes and grow your business.