Whether you own a large or small business, it can be easy to make accounting mistakes. It will not always cause a big problem to your business, however, its best to avoid mistakes altogether.
Coleman & Co will take you through all the common business accounting mistakes that are made and how to avoid them.
Disregarding Accounting Procedures
If you want your business finances to stay accurate, it is important to think like an accountant. By following regular accounting procedures, you can cut out accounting mistakes that could be made. Accountants use the best methods to ensure complete accuracy in all business finances and replicating these methods and processes will help you stay on top of finances.
Choosing to disregard basic accounting methods and choose your own processes can often lead you down the wrong path. Whilst this could be successful, you should always choose to set up detailed finances to manage bookkeeping and accounting.
Regardless of your current financial situation or the number of transactions you’re tracking, you must avoid poor organisation. Poor organisation will always lead to further mistakes, even if you feel like you’re in control of your finances.
This means you should keep receipts for all business transactions, tracking all income and expenses. Failing to stay organised could lead to legal issues if you fall behind with tax returns or paperwork. Organisation is key to ensuring all tax returns are accurate and that you always have access to all financial information.
Whether you are a maths genius or struggle with the numbers, anyone can make mistakes with their figures. There is very little you can do to avoid a genuine error, however, using accounting software should always be a priority.
Even if the error made is minor, it can still influence your financial records and other financial features. Using accounting software will reduce the chances of errors being made, as well as picking up on any possible mistakes you have made. This may not prevent errors, but it could help you identify and resolve them quickly.
Missing Tax Deadlines
In 2018, almost 750,000 people missed the January 31st tax deadline. Too many businesses are failing to submit tax returns on time, which could lead to fines or investigations. This will only cause more problems for your business, making it important to always submit taxes on time.
Submitting your taxes on time really shouldn’t be a difficult process for most clients. Keeping your taxes organised throughout the year will help you prepare for deadlines and ensure taxes can easily be submitted without any issues. If you fail to record taxes throughout the year, it makes tax returns a big struggle and puts you at risk of missing the deadline.
Not Recording Small Transactions
It’s just a small transaction, so why does it need recording? Every business transaction needs to be recorded, regardless of how large or small it may be. Whether you are purchasing a pint of milk or a chocolate bar from the local shop, record these transactions. Not only could they build up, but it ensures your business finances are as accurate as possible.
Your small transactions may not be as simple to record as larger transactions if they are frequent. However, they are just as significant and as they build up, their grand total will need to be included in final finances. Without recording these transactions, there is no evidence of what has been purchased and how much individual costs were.
Another way to avoid accounting mistakes is to outsource to fully qualified accountants. Coleman & Co offer advice and a range of accounting services to all businesses in the Lisburn area. For more information on our services or to hire accountants, contact our team today. Call us on 028 9266 3599 or fill in our contact form to make an enquiry.