Common Accounting Mistakes Smaller Businesses Make - 109th September 2013
Small businesses without access to an accounts department are guilty of some common mistakes and misconceptions when it comes to their financial management...
The first mistake is 'not keeping accurate records and not keeping them up to date'.
How often do you hear people say they're frantically pulling together a years' worth of receipts for their accountant/book keeper. I'm sure you've encountered this 'supermarket carrier bag' mentality - the bundles of receipts shoved into a shoe box for someone to make sense of at the eleventh hour.
Most people venture into business to make money. Financial fear; through lack of understanding; makes them ignore it. So my advice to you is get help! A 'once a year financial position' is asking for trouble.
If you aim to maximise financial returns for your business you need up to date, accurate information to understand how you're doing (good or bad) so you can take appropriate action.Those that are making an attempt to keep and maintain records tend to fall into the group that sees 'doing the books' as a 'chore'. Quite simply, they're not a chore! They can be the difference between failure and success and whilst I may argue that the owners time may be better spent driving the business forward this is an essential business discipline that must be carried out regularly and well.
we'll be posting more 'common accounting mistakes' soon... meanwhile you're welcome to share your thoughts on the subject with us.