While business owners tend to focus their goals toward developing their business, they tend to treat bookkeeping or the need to be up-to-date with records, as a burden. It is important for a business owner to be aware of the common mistakes in bookkeeping so that problems can be avoided. Listed here in this article are some of the common mistakes bookkeepers usually do in bookkeeping.
1. Do-it-yourself bookkeeping
This mistake has been rampant to small business owners as they tend to make their own bookkeeping method. By trying to do the bookkeeping by yourself you waste time since it is vulnerable to mistakes leading to penalties for late or incorrect information. Bear in mind that you do not know everything, one of which is bookkeeping. The solution? Hire a professional bookkeeper to record your day-to-day transactions, reconcile your bank accounts, forecast cash flow, payroll and a lot more. You can then allot your time, skills and expertise to do other important tasks such as managing and controlling your business.
2. Using a software that is unfamiliar
We should thank technology because we are able to find ways to make the process of bookkeeping easier. However, you should also bear in mind that technology can cause a negative impact on the business if not used properly and effectively. They all appear to be user-friendly but in reality, it still requires someone who is well aware of the software. It is advisable to let a professional bookkeeper advice the right software for your business. Also, familiarise yourself with how to navigate the software for you to be able to use the information stored in the software for strategic decision making. Having accounting software can give you real-time information and can be pulled up anytime you want.
3. Lack of time for checking of cash flow
There is so much to consider when it comes to managing your cash flow. That is why it is important to check your cash flow often to spot critical issues on your business. You have to keep track of your outflows and inflows for you to be able to know whether you are improving or not. A bookkeeper can do this work for you. They can keep a regular check on your cash flows, do regular bank reconciliations and cash forecasts so that you would know your day-to-day position and can plan ahead if there are problems. In this way, you can prepare yourself and the business for whatever crisis that may come.
4. Late invoicing
Invoicing can be a boring task which is why you always tend to de-prioritise this. However, you need to integrate a proper system and discipline in place for you to have accurate data. As much as possible, always collect on the spot. Invoicing is an important part of the business. That is why your bookkeeper should always get statements out early and run reports immediately so that you can take the necessary actions for overdue debtors.
These common mistakes can be avoided by having a bookkeeper who can effectively fulfill their duties. If you want to hire a professional bookkeeper, Eclat Accountancy Ltd offers you a great deal of accounting and bookkeeping services that suits your needs. Visit their website now to get free bookkeeping services.