Don’t Make These Business Accounting Mistakes

newsonjapan.com -- Nov 29
Keeping accurate records of your company’s sales, profit, loss, payroll, and other accounting details is something you don't want to play around with.

However, there are common mistakes that a lot of businesses make (especially small businesses) when it comes to their accounting. We want to help you avoid those, which is why we put together this list of things to look out for.

Trying to Manage All Your Accounting within the Business

In-house accounting may seem like a good idea at first for small business. After all, there's not a lot of data to keep track of and you ensure that no one else sees the sensitive information you're collecting. However, this is a common mistake that should be avoided. Trying to do all of your own bookkeeping can lead to foolish mistakes. There may be some data you're missing or not accounting for correctly and accurately. Trying to do your accounting in-house can also lead to fudged records, where well-meaning employees can try to make the books look good and cause major problems down the line. Also, doing accounting in-house increases the risk of someone trying to skim a little off the top.

Conflating Income with Profit

You might think just because money is coming in at a rate that's greater than it is going out that you're making a profit. That makes sense, right? However, you may not be accounting for some of those periodic expenses. You may not have factored in loan payments, rent, property taxes, or other business expenses that only happen once or twice a year. It's easy to overlook these things when you see the money coming in at a healthy rate, but you want to take into account all your expenses for the year when trying to calculate if you're actually making a profit. There may be some months where a decent income for your business still isn't enough to cover the costs.

Overlooking Minor Transactions

Every transaction your business makes is an important one, no matter how small. One of the common pitfalls that plague small businesses, or businesses of any size, is not taking into account those small transactions. You should definitely be recording all transactions, no matter how small- either through your accounting office, or สำนักงานบัญชี, or through in-house accounting.

The problem with overlooking the small transactions is that they can add up. When you try to account for your expenses, something may not balance out. Businesses end up with inaccurate bookkeeping because they are not factoring in all the transactions their business has done.

Here are a few of the commonly overlooked small transactions that businesses should be watching out for:

  • fuel costs
  • tollbooth fees
  • postage costs
  • break room supplies
  • stationery

Failing to Budget All Parts of the Business

Even small businesses have different components to them that are serving various functions. You will likely have payroll, bills, taxes, and supply costs no matter what your business is. You will want to account for all of those expenses, as well as for all the different aspects of your business. You want to ensure that your business is funded completely and that you're budgeting for everything you are trying to do. If you offer delivery, you plan to expand your business, you want to hire new employees, you want to offer promotions, or anything else you're looking to do with your business, it all needs to be fully funded. You can't operate with the mindset that any part of your business will be able to take care of itself. It all needs to be funded from the source and planned out ahead of time in order to function as it should.

Not Hiring Accounting Professionals

This ties into the first mistake a little bit, but there's a distinct mistake here that can be made. Your business should have its accounting done by a third party, but you also want to make sure that that third party is competent. It's an easy enough trap for small businesses to fall into where they hire friends or family members to take care of the accounting side of things. That is not a good idea for a number of reasons, the most significant one being that you are probably not getting professional accounting services.