For some, managing finances and accounting for a small business might not seem too difficult a task at first glance. However, while accounting mistakes may be uncommon, they can still happen. And if they go unnoticed or unresolved, could be seriously detrimental to the growth of your company. As a small business owner, it might be time to reevaluate your processes to make sure you are avoiding these most common mistakes:
- Trying to Cut Costs on Accounting – Whether you believe it is a good idea to hire a young finance manager instead of investing in a more expensive experienced one, or you try to handle all the accounting yourself, it’s usually not worth it because of the costly mistakes that often happen. Invest in an experienced financial officer or team of accounting professionals to guide your company and consult you on the best investment opportunities.
- Letting Paperwork Get Out of Hand – Many might think that small business finance doesn’t involve much. On the contrary, small businesses must have a surefire system in place to track all paperwork going in and coming out. Especially when checks come in! Just because you received a check doesn’t mean you have a healthy cash flow. Set a schedule for reconciling your accounts and stick to it.
- Not Automating Enough – There are many online accounting programs and cloud programs that make payment receiving, invoicing, employee time tracking and payroll easier than ever. Talk to other small business owners, accounting consultants and/or product developers to find one (or a couple) that fit well with your company’s needs. Embracing technology will make your life much easier.
- Refusing to Rely on the Professionals – While your online accounting software may give you the feeling of being in control, it’s better to hand the reigns over to a true accountant or accounting firm, especially to handle taxes and yearly audits. You may have been a master at filing your own personal taxes throughout your adult life, but your business is in a completely different ballpark. You may not even be aware of some of the deductions you could or should make or how to keep in line with the latest tax laws. Hiring an accountant could save you large amounts of time and money in the long run.
- Having Clearly Defined Budgets and Goals – No matter how big or small the project at hand is, it is important to know what your expectations are and whether or not you are meeting them. Without these tools, you might not realize when you are wasting too much time or resources on matters that won’t bring a profitable return.
Contact us to meet with one of our certified accountants or tax professionals to find the support you need to avoid accounting mistakes.