Top 5 Common Bookkeeping Mistakes Small Businesses Make
Introduction
Bookkeeping is the backbone of your financial health but small businesses often stumble with basic errors that cost time and money. In this article, we’ll explore the top five bookkeeping mistakes and show you how to avoid them.
1. Failing to Track Every Expense
When you skip logging small expenses (parking fees, office snacks), they add up and you lose valuable deductions. Use a dedicated app or QuickBooks to record every transaction in real time.
2. Mixing Personal & Business Finances
Many business owners miss out on legitimate deductions simply because they don’t realize certain expenses qualify as business-related. Mixing personal and business finances makes it even harder to identify these opportunities. Combining bank accounts also makes reconciliation a nightmare. Always maintain separate accounts to ensure accurate statements, maximize deductible expenses, and maintain credible records for lenders and investors.
3. Skipping Regular Reconciliations
Reconcile your bank accounts monthly, don’t wait until tax season. This practice catches bank fees, duplicate charges, and unauthorized transactions before they balloon into bigger issues.
4. Neglecting Sales Tax & Payroll Liabilities
Overlooking sales tax or payroll liabilities can trigger fines and penalties. Automate tax rate settings in your accounting software and schedule payroll runs to stay compliant.
5. Poor Document Management
Lost receipts, faded paper, or disorganized folders slow you down and risk IRS audits. Go digital: scan and store documents in a cloud folder with clear naming conventions.
Conclusion
Avoid these five pitfalls to keep your books clean and stress-free. Need expert help?
Contact MakdaCPA today for streamlined bookkeeping and QuickBooks services.
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