Common bookkeeping mistakes you need to avoid

by | Jul 15, 2021 | 0 comments

Steer clear of these 3 mistakes

Books are the heart and soul of any small business. It is often seen as a task most of us would prefer not to think about, but we all must face it at some point along our business journey.

Over the years, I’ve come across a few mistakes that I know all bookkeepers (including myself) like to steer clear of – aka a big no in the world of bookkeeping.

We’ll let you in on a secret. Bookkeeping can be a gamechanger when it comes to managing and growing your biz. However, when you’re a small biz owner, it can be difficult to know where to start with your books.

That’s why it’s time to take control of your books and avoid these three common mistakes…

1. Poor record-keeping
Did you know that business paperwork must be filed for 5 years (ATO) and 7 years (Fair Work)? When it comes to record-keeping, it’s extremely important to stay on top of things and keep records up to date. These include those small purchases and transactions that may seem insignificant but can save you time and money down the track.

2. Unreconciled accounts
Account reconciliation is simply comparing your books with your bank statement to check for discrepancies. Failing to reconcile often enough means it can be difficult to determine the financial state of your biz. Missing this key step can have a flow-on effect with other records and business decision-making, yikes!

3. Mixing business and personal
This may be an intervention for some, but business and personal expenses need to be distinguished and for good reason. Not only can it lead to messy books, but it will also be difficult to have a clear view of how your business is performing. And yes, I hate to break it to you but that means having separate bank accounts for the business and personal.

Remember, it’s okay to make mistakes. They are a great opportunity to learn something new. The sooner you address any mistakes the less it can cost your business in the long run, yay!

If bookkeeping still isn’t your thing, the team at IM Business Solutions is here to help with all of your bookkeeping needs.

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