Accurate bookkeeping is necessary when running a small business. Minor mistakes can potentially trigger tax audits, inaccurate accounting reports, and other financial headaches. Here a few of the most common bookkeeping errors small business owners make and how to avoid them.

What Are Some Frequent Bookkeeping Mistakes?

1. Procrastinating

With all the pressures of running a small business, keeping up with daily transactions may seem like a project that can wait. However, the more these financial chores build up, the more overwhelming they can seem.

This can lead to confused records and cause you to miss important tax filing deadlines. Update your records daily to prevent inaccurate numbers and late filing.

2. Throwing Away Receipts

Small business purchases like printer ink or gas may seem fairly inconsequential, but they can add up to major tax deductions. Save receipts for every business purchase to ensure you take advantage of all possible deductions. This also gives you the necessary documentation to present to auditors if you’re selected for an audit.

3. Mixing Personal & Business Finances

Making personal purchases with business funds or vice versa can complicate your books and potentially draw unnecessary attention from the IRS. Whether you own a thriving business or work as an independent contractor, use separate accounts for your business and personal finances.

4. Not Looking at Financial Statements

Your bank statements, annual reports, and other financial documentation give you insight into the health of your business. When you get your financial statements, review them carefully for discrepancies and pay attention to the bottom line. The information in these statements will help you create accurate annual budgets and perform important financial analyses.

5. Failing to Reconcile Your Accounts

Reconciling your bank accounts with your records is an often overlooked but essential bookkeeping task. With accurate, consistent reconciliation, you’ll always know exactly how much cash you have on hand. It will also help you discover bank errors or other issues as soon as possible.

If you need help with bookkeeping and other financial tasks for your small business, contact Roy E. Carter, CPA, PC, in Staunton, VA. Since 1998, they’ve helped business owners with a range of financial services. They specialize in QuickBooks® to ensure accurate and timely recordkeeping. Visit their website for more on their expertise, or call (540) 886-6251 to speak with a team member.