Accounting is often seen by the entrepreneur as a necessary evil. Everyone knows that accounting is crucial and necessary for any business and yet the vast majority dread it. It is true that accounting still requires a little discipline and rigor and some knowledge.
You possibly have a disfigured view of the financial reality of your business or affairs, without good accounting management, in this article, we’re going to shine a light on the most common accounting mistakes, so you don’t get caught up in the trap and get a good look at the financial health of your business.
Mix your personal and business expenses
It is often in your best interest to clearly distinguish between personal and business accounts and expenses. We suggest that you quickly open a business bank account and apply for a corporate credit card. In this way, it is easier to differentiate your types of expenses. Getting a corporate credit card upfront will help you develop a good credit report, which will help you in the future if you want to borrow money.
Do not keep and sort your receipts and administrative documents
Entrepreneurs or self-employed workers may lose their receipts for professional expenses. If you ignore these reimbursable expenses, you risk losing tax deductions. So make sure you keep your receipts safe, categorize them by date and type of expense for better organization. Also, take care to keep your administrative and accounting documents for at least the minimum period required.
Do not do the bank reconciliation
The bank reconciliation is a process used to ensure that the company’s books are in line with the bank statements. Skipping this validation step could result in asymmetries or errors in your books. To have your books in order, be sure to do your bank reconciliation every month.
Do without experts
The main reason behind encountering financial losses in a business is an error in data entry. While we cannot avoid data entry errors, we can follow some defined procedures for making data entry so that the errors are identified and fixed on time.
As a manager or self-employed, you can’t do it all yourself. Know your strengths don’t hesitate to ask for help where you know you need it. You are not an accounting, for example, you can ask for the advice of an expert to do your business taxes or establish an accounting chart adapted to your type of business. Do not delay in asking for help when you need accounting and auditing services, as only then you will avoid costly accounting mistakes.
Do not hesitate to consult a certified accountant, he will be able to guide you to make informed business decisions and ensure the financial health of your professional activity.
Accounting service providers are particularly useful for doing your bookkeeping, your bank reconciliation, and generating your financial statements. We recommend choosing a company that will allow you to do your accounting efficiently with its top-notch accounting and auditing services. It will save you a lot of tedious calculations, data transcriptions, and precious time.
This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.
Posted by:
CA Aman Aggarwal
AKGVG & Associates