3 Top Bookkeeping Mistakes Small Businesses Owners Make
- Not saving or recording cash receipts. Small businesses, especially contractors are notorious for overlooking to include out of pocket expenses in their bookkeeping. That’s too bad! If calculated annually, all these discarded receipts could add up to thousands of dollars of missed deductions on their taxes!
- Doing bookkeeping manually. Small business owners make poor bookkeepers, especially when they are starting out. They frequently don’t have enough time to collect and manage all the paperwork, especially tracking A/P’s and A/R’s or just doing simple bank reconciling. Those that attempt to do it manually get overwhelmed and frustrated and either give up or let their accountant handle it. What these business owners don’t realize is that accountants charge about $125 to $150 per hour to do simple bookkeeping that can easily be done on popular and easy accounting software like QuickBooks. Even keeping books on an Excel spreadsheet is better. When I start working with new businesses, one of the first things we do is set them on QuickBooks. They spend five or six hours training with me and then they are own, easily managing their own books!
- Forgetting to reimburse themselves for out of pocket expenses. Let’s be real. Every once in a while you find yourself without a business check or credit card and having to pay instead with your personal money. That’s fine. What’s not is forgetting to reimburse yourself. Not paying yourself back means
a. You aren’t tracking all your business expenses accurately b. Your financial reports will be overstatedc. You are likely going to miss tax deductionsNorth Jersey's and New York City's Premier Bookkeeping and QuickBooks Solutions
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