Owners of small business find bookkeeping, the most important and toughest task. Well, it sure is. Bookkeeping takes hours and hours to get completed and is a very mundane and tedious activity. This is the prime reason most companies don’t keep track of their accounting tasks monthly, which indeed leads to failure. We’ll discuss the errors one can miss while bookkeeping so that they are easily avoided.
- An error of Omission– when the transaction or the financial activity is not recorded; It can happen when the bookkeeper is distracted and missed the entire entry to record; as a result, it doesn’t appear in the document.
- Improper categorization of expenses. If the owner or a person hired in business who does not have the knowledge of proper bookkeeping, it’ll definitely result in causes many errors. Proper measurement of profit would be to track down expense and income in the correct category accurately.
- To not have a separate Bank Account. If you establish a business, one of the most foremost works should be to have a separate bank account for your personal and professional use. A time comes when you are asked to show complete bank statements, and your personal expenses are also given.
- An error of Commission – Mistake while recording the calculations. Such as when a sum add while it should have been subtracted instead.
- To not have Backups. In a world of today, we are entirely dependent on technology. We never know when things might go wrong, and you end up losing all your recorded data. Therefore, it is essential to have your data backed up to avoid potential mislaying.
- To neglect sales tax. It is a very common error not to report the sales tax. The omission in reporting the sales tax may lead to penalties and fines. Also recording to false data may result in a greater total amount of sales.
Sure bookkeeping is tedious, yet it is also the secret weapon of the growth and success of any business. For a successful and lawful business, you need to keep a record of every financial transaction taking place. In the region of Australia, Irena’s Bookkeeping Sydney is where you’ll find professional bookkeepers for your business. Visit the site to hire skilled bookkeepers; they’ll help you avoid common accounting errors.