You may have been in business for years or you could be a young start-up finding your feet, either way, if you are spending time carrying out your own bookkeeping, make sure you are not falling foul of any of these errors……
Combining personal and business bank accounts
Don’t get too caught up in the early stages of starting a new business to overlook this one – it’s an important one! Even for sole traders, not separating your finances can cause serious headaches. Get a separate bank account organised and ensure all business income goes in here from day one.
Not reconciling bank accounts
Reconciling your business bank accounts is really one of the basic fundamentals of good business bookkeeping. Where I work it is done daily – that way any data entry errors are picked up whilst everything is easy to recollect. You may only need to do it weekly or monthly. Viewing your bank statements on a regular basis will also help keep you in tune with your cashflow situation. Simply put, reconciling means that your bank statement matches your business books. Bank account fees and interest get entered into your books and unpresented cheques can be followed up. Most online accounting packages can be set up for automated bank feeds – doing much of the work for you.
Not keeping receipts
Get into the habit of keeping every business related receipt – claim every expense you are entitled to and ensure you have proof of purchase if you are ever audited. Good organisation and filing will help with this one. Get employees into the routine of emptying their work vehicles of any parking tickets, promptly file away paid bills, or better still start using an App like Receipt Bank, it will make sure you don’t have to worry about crumpled fuel receipts or printing off invoices from online purchases, it really is a bit like magic! If you are not sure whether you can claim the expense – ask your accountant.
Getting behind with the books
Small business owners often have to juggle many roles and bookkeeping will sometimes slip to the bottom of the “To Do List”. If you are at the point where you cannot keep on top of your bookkeeping, consider hiring a professional freelance bookkeeper or part-time bookkeeper. It is important that at any time you can look at your books and establish the financial health of your business – whether you are making a profit, whether your customers are paying within terms, what you owe etc. If hiring a bookkeeper isn’t an option, get into the routine of doing a little of the bookkeeping often.
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