When we start our own business, we do most things ourselves because of the new likeness and excitement which urges us to handle things on our own, even the things we don’t like, including the bookkeeping, and is not a task that comes easy. This is because you would not only have to deal with getting someone who can perform the tasks that you need to be done like keeping your accounting books well-maintained in an accurate manner because you think you have a grasp of the basics of businesses.
Here are 3 most common bookkeeping mistakes small and new businesses often make, along with our handy suggestions about how to avoid them for long-term business growth.
Putting off Bookkeeping Process:
Sounds fun, but it’s not! If you’ve decided to handle those looming and deadlines tasks, then better be prepared for the consequences. Sooner or later, there will be an overwhelming sort of tasks which you need to update. The things can go even worse when you won’t have a clear idea of what’s happening in your business. And soon HST and tax deadlines are looming, and you aren’t ready.
The best thing you can do is put some effort to update your financial information in your dairy and check that you understand what your figures are actually telling you without doing minimum fuss and duplication.
Mixing both business & personal spending:
Thinking of mixing both business & personal spending is actually not a good idea to consider. It’s easy to lose track of what you have done so far as it creates a mess and confusion towards you, and soon you can find yourself out of nowhere.
In just a few days you will begin to struggle to remember all your relevant bank or credit card statements which were necessary for your business, and wasting a lot of time is another task which will frustrate you from inside.
Our recommendation is to go for a separate business credit or debit card so that you will always have a clear view, record and track of your business-related spending. Another benefit which you will get is it helps to avoid tax return mistakes.
Intricate Cash Flow:
Not collecting your receipts and purchase invoices might lose you a clear view of tracking your business cash flow. Not correctly coding all your income and expenditure creates unuseful reports for you and your business which will devastate business in the long run.
Well, it is advised to always keep an extensive record for your business receipts from the biggest to even the smallest expenses as it will help to reduce your HST and tax bills. But it may come handy during scrutiny as HMRC could ask to scan your receipts reports.