06 Jan Small business accounting errors to avoid
Managing your accounts is an essential part of any small business, and small errors can have big consequences.
It may feel like getting to grips with your business finances is a bit of a minefield, but we’re here to help you avoid these common small business accounting errors.
No time for accounting
Many business owners who don’t take accounts seriously can find themselves in hot water when it comes to tax deadlines. It’s vital that you schedule some time to take a look at your business finances regularly, whether that’s meeting with an accountant or going through your receipts. If you don’t plan any time to do your accounts, it simply won’t happen!
Having one account
If you are just starting out in business, it might seem easier to have just one bank account for both personal and business costs, especially if you’re working from home. However, this can lead to serious issues in the future when you try to tally up business expenditure which is hidden amongst all of your personal spendings. Setting up a business bank account is super simple and can make it far easier to manage your finances.
Again, it is essential that you don’t miss deadlines for payments as that can incur serious fines which will damage your business. Make sure you have an up-to-date calendar which has deadlines for bills, deliveries, tax deadlines and more clearly marked. You can set reminders a day before too.
If you’ve ever had to find a receipt the night before the tax deadline, you will know how frustrating losing evidence of income is. Any good accountant will tell you to keep proof of all of your business transactions, from petrol receipts to rent for premises. It’s still important to keep track of your business spending and income, but nowadays many of our transactions are online. Make sure you don’t lose any important information by correctly storing and filing documents, and make sure everything on your computer is backed up too.
Doing it yourself (badly)
Though many small businesses handle their own accounts if you’re not an expert, you might make some mistakes if you haven’t done the proper research or set up a good accounting system. The best way to ensure that you don’t make any small business accounting errors is to get a professional to handle your business accounts. Get in touch with SQK Accountancy to see how we can help your business today.