Every business needs good bookkeeping techniques to be followed on daily basis to keep their records up to date and to save their neck from getting in trouble at the time of audit and tax payment. But due to a few common mistakes that the companies make, they make bookkeeping something troublesome for them which is why it is important to know the common bookkeeping mistakes and the tips to avoid them as well.
- Improper or poor record keeping
When the records and the finances of a company are not updated on regular basis, the company tends to lose the spirit of transparency and the chances for error get more pronounced. So the records and bills all must be cleared on daily basis.
- Improperly categorizing the records
Categorizing the records helps a lot in decision making and in getting a clear picture of the profit and loss. If you are not getting your records categorized at the time you are making them, you will sure get in trouble later at the time of audit.
- Not reconciling bank accounts
Another big mistake that the business owners make is that they use a common account for the personal expenses as well as for the business needs. The best thing to do is to keep the two separate but if you are using a common account, then you must keep the records separately as at the time of audit, you will have to show all the details to the auditors.
- Not having backups
Since bookkeeping requires the use of the bookkeeping software, therefore it is important to pay attention to the backup as the technological means could go bad in not time and we need to stay prepared for the worst as well.
- Neglecting sales tax
Another common mistake in bookkeeping is not maintaining the record of the sales tax. When you do not keep a record of the sales tax, you are asking for trouble yourself. These things require very little time if done at the right time, else you have to pay for all your shortcomings.
- Hiring incompetent people for the job
Hiring the people for the job who are neither skilled nor competent is another problem. So when you are about to hire the professionals for bookkeeping, make sure that you have considered all the options and that you are going for the best. So if you are looking for the best bookkeeper castle hill, make sure you have chosen the best of all.
7. Wasting too much time
Last but not the least is the mistake of wasting plenty of time for bookkeeping. This usually happens when the company does not hire a person separately for the job. If you are business owner and you are doing bookkeeping as well, you sure are wasting a good length of time in it and you are overlooking several other important issues as well. so hire the right man for the job and focus on business making.