5 Accounting Mistakes You Might Be Making
Accounting for many businesses means a sizeable amount of head scratching and chin rubbing. To help smooth out those frowns, we've pulled together 5 common accounting mistakes that we see small and medium businesses making.
1. Not Taking Bookkeeping Seriously
Bookkeeping, the day to day of good accounting, is not only beneficial to the end of the year account filing. It also provides a business with up to date information on the cash flow of their company. This can help identify areas for attention or growth. Keeping a handle on the numbers is crucial to growing a strong business.
Find out more over on our blog, What's the Difference Between Bookkeeping and Accounting?
2. Working Without a Budget
Budgets are the bread and butter of good accounting. When driven by data and information, a budget will help drive your business forward with realistic financial goals. Without it, a business cannot get an accurate representation of how well it is meeting its objectives.
3. Data Entry Errors
Mistakes happen. But in accounting, we need to ensure all recordings of income and expenditure in your business are correctly classified to ensure the year-end accounts accurately represent the company's financial situation. Failing to do so could result in a penalty from HMRC.
4. Not Keeping Records and Receipts
As a business, we are all required to keep a record of all income and expenditure for 6 years from the end of the last accounting period. If you don't keep all these records and receipts, you could be facing penalties from HMRC.
So, next time you're making a purchase for your business, don't forget to ask for the receipt and keep it in a safe place!
Read more on our previous blog, How Long Do I Need to Keep Records For?
5. Taking It All On Yourself
If you're taking on all your accounting and bookkeeping tasks, you'll know just how time consuming the jobs can be. Time is precious in business and it could be better used adding your unique value to grow your business.
Hiring an Accountant could be perfect for you, especially if you're growing quickly or registering for VAT. If you're not sure where to start with choosing the right Accountant for your business, head to this blog to discover our top tips.
If you would like a helping hand with the financial side of hiring your first or next employee, get in touch today to book your FREE initial consultation. Give Catherine a call on 01423 431889 or email email@example.com.
Please note: all stats are accurate for the 2021/22 tax year.