Being a small business owner is hard enough without having to worry about bookkeeping. But whether you like it or not, keeping track of your finances is a critical part of running a successful business.
That’s why it’s so important to avoid making common bookkeeping mistakes that can trip you up. In this blog post, we’ll explore three of the most frequent blunders small business owners make when it comes to bookkeeping—so you can avoid them at all costs!
1. Not Keeping Regular Financial Records
One of the most important things you can do for your business is to keep regular financial records. This means tracking all of your income and expenses on a monthly basis, as well as keeping important documents like receipts and invoices organized.
If you don’t stay on top of your financial records, it will be difficult to track your progress or make informed decisions about your business. And if the IRS comes knocking, you’ll be in for a world of hurt.
2. Failing to Separate Personal and Business Expenses
Another mistake small business owners often make is failing to separate personal and business expenses. This can lead to serious problems come tax time, not to mention a total headache when it comes time to reconcile your books.
To avoid this mistake, be sure to open a separate bank account for your business and use only that account for business expenses. Then, when it comes time to do your taxes or balance your books, everything will be nice and neat—and you won’t have any unwanted surprises.
3. DIY-ing Your Bookkeeping
Last but not least, one of the biggest mistakes small business owners make is trying to DIY their bookkeeping. Unless you have experience with bookkeeping or accounting, chances are good that you’re going to make mistakes—and those mistakes could cost you dearly come tax time.
Save yourself the headache and leave the bookkeeping to the professionals. That way, you can focus on running your business and leave the number crunching to us!
Donna Harris holds a BSci in Accounting and an MBA, and is the owner of Bookkeeping Made Simple.
Donna Harris, BSci Accounting, MBA, founded Bookkeeping Made Simple with the understanding that small businesses is the heart of the American economy. After offering to do books for a friend who said he didn't have enough work to keep someone in the office 20 hours a week, she recognized the need for an efficient, online system. She has 20 years of bookkeeping and accounting experience and is excited to help small business owners achieve their goals. She enjoys spending time with her family and traveling whenever possible. She also loves reading, hiking, camping, cooking, yoga, and fitness. A huge believer in lifelong education, she is currently working on her master's in Accounting.