1. Not saving receipts for small expenses. Such receipts provide backup documentation for the many deductions you may claim and can prove valuable at tax time.
2. Forgetting to track reimbursable expenses. Small business owners often pay for expenses out of pocket or with their own personal credit card then fail to submit the expenses to the company for reimbursement.
3. Not properly classifying employees. This results in misfiling when it comes to filing payroll tax returns since there are different rules and regulations for employees and non-employees.
4. Lack of communication. A frequent mistake is making a payment and not reporting it or providing the bookkeeper with the information or receipts.
5. Not reconciling the books with the bank statement each month. One of the fundamental aspects of bookkeeping is reconciling the books and bank statements every month. Nonetheless, there are businesses that do not do this and others where errors are made by not doing it properly. Again, this is a good reason for hiring an experienced bookkeeper. |
6. No backup. A paper trail, documentation or verification in the form of backup documents should be available, especially if all files are on the computer system, which could be prone to technical problems.
7. Not deducting sales tax. A common mistake in retail businesses is not deducting the sales tax from the total sales. This results in a higher total sales amount and does not lower the amount of taxes due.
8. Petty cash nonchalance. Many offices are nonchalant about using the petty cash fund without keeping accurate records.
9. Mis-categorization or over-categorization. There are fairly standard categories for expenses. However, often expenses are entered into the wrong categories or too many categories are created. This makes the system cumbersome and extracting information time consuming.
10. Doing it yourself. Having a competent bookkeeper handling the books can be extremely beneficial in that they have the skills to do the job quickly and efficiently and will provide a second pair of eyes to find errors and make suggestions. |
