5 Small Business Accounting Mistakes to Avoid
Few things can be as damaging to a company as accounting errors. One mistake can cost a business thousands of dollars, or more. Let’s look at some common mistakes that small businesses in particular make, regarding their accounting practices.
1. Family Members Aren’t the Answer
Although it may seem like a good idea to save a few bucks and hire your Uncle Tony to do your accounting, don’t! This could ultimately stir up a can of worms that’s won’t benefit either party. There is enough stress associated with the financial realm without bringing any family drama into the mix. This is one of the areas that you don’t want to cut corners in. After all, the livelihood of your company is on the line.
2. Invest When Necessary
There will come a time in your business’s maturity, when your base level accountant may no longer be the best match for the issues you’re facing. You must realize that eventually you will need a senior member on your team to deal with intense problem solving. Experience is the only solution when it gets to this point. As a business matures, financial decisions carry more and more weight.
3. Don’t Get Carried Away on Tech
When you are just starting out, don’t go out and buy the latest and greatest high end accounting system, there are many small business solutions will suffice. Your money needs to be spent elsewhere, like for hiring someone who actually knows how to use the software in question. It’s always a good idea to start with the bare minimum until there’s a point when you really NEED to upgrade for one reason or another. If not, your just throwing money out the window.
4. You Need Help
It is common for a small business owner to want to do everything themselves. Not only to save money, but because no one else can have the attention to detail that you do, right? Wrong. There are plenty of valuable assets out there, you just need to learn how to train them to have the attention to detail you are looking for! Don’t drive yourself into the ground.
5. Leave Your Personal Finances Out of It
Although it may seem efficient to have business and personal expenses rolling through on checking account, it’s not. You must be sure to document your business expense write-offs. This is crucial if you ever get audited, which does happen, let’s face it. It’s better to have a clear differentiation between business and person from the beginning, to avoid added expenses and stress down the road.
For more information visit forbes.com
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