Small business owners are oftentimes the best at multitasking. To run a successful business, a person needs to be adept in management, promotion, advertising, branding, and a myriad of other business related skills. Oftentimes, small business owners make bookkeeping mistakes in the operation of their business primarily due to lack of knowledge regarding property accounting procedures or simply a lack of time.
While many small business owners work tirelessly to master all of the various aspects of their company, the bookkeeping can fall behind, leaving little time for thoughtful and careful record keeping. Some of the most common bookkeeping mistakes made by small business owners can be avoided with proper knowledge and awareness, which is important for the company’s success.
Keeping track of expenses is important to proper reporting in bookkeeping, and it can also become a pitfall for many business owners. Even the most meticulous business owner can occasionally forget to save a receipt for a business related purchase. It may not seem to be all that important, but all of those purchases add up, and claiming expenses without proof of purchase can lead to real problems with the IRS.
With that being said, how expenses are recorded is also important, so make sure the bookkeeping is done correctly, and it is one of the areas in which small business owners tend to make mistakes. How you log bigger purchases, such as office equipment, will indicate what items can be written off at the end of the year and which ones can not.
How the item is logged in the books, such as an asset that can depreciate of time, will make a difference in how that expenditure can work for or against you in the future. Which is why having a concrete bookkeeping plan of action in advance, or hiring a Certified Public Accountant (CPA) can be advantageous to the business’s financial health and longevity.
As many small business owners are capable of meeting the demands of their company in so many different ways, they sometimes fail to realize how their company could benefit from the strategic outsourcing of certain tasks. For instance, many business owners feel they are saving money by not hiring accountants when in reality, they are costing their business more by risking improper financial reporting.
Certified Public Accountants can contract to take on as little or as much of the bookkeeping for a business, giving the owner options that will fit within any budget. Even if used only quarterly, a CPA can make sure that expenditures are logged correctly, payroll and taxes are filed appropriately, bills are maintained and other financial pieces of the business are handled as required.
If you are a small business owner and interested in how the services provided by a CPA could benefit your business, Jack Trent & Company can answer your questions and take care of your needs. For any small business, a healthy bottom line starts with accurate bookkeeping.