4 Accounting Mistakes to Avoid and Learn From

4 Accounting Mistakes to Avoid and Learn From

With the use of technology and the ready availability of the accounting software has made the accounting easy for small to mid-sized business. But it has not eliminated the costly accounting mistakes.

With the use of technology and the ready availability of the accounting software has made the accounting easy for

small to mid-sized business. But it has not eliminated the costly accounting mistakes. Some mistakes may have minimal effect on the company’s financial and can be corrected easily. Then there are other mistakes which can have a significant impact and may misrepresent the true health of the company. Here are some of the most common ones:

Reconciliations in Timely Manner The balance sheet account needs to be reconciled like the bank accounts and other accounts. If they are done on a monthly basis it is good for the business. In reconciliation, the account balance listed on the books is accurate and correct. It helps in identifying the problems before they get out of the hand.

When it is done properly, you will know how much cash or credit you really have available. It also ensures that there is no fraudulent activity, and catches the bank errors. You will also come to know whether the customer payments have bounced or failed to post. There is a reconciliation feature available in most software to make the process easy and efficient. Or you can hire a Manhattan accountant as well.

Errors of Data Entry Human error when entering data is one of the most common causes of money loss. While you cannot prevent all data entry errors, you can surely have procedures in place to ensure that the entries are identified and corrected in a timely manner. Here are a few best practices to help eliminate data entry errors:

• You should not overload your team for the data entry work.

• You will have ample time to review the work to ensure that there is another set of eyes on the books.

No Documentation Procedures Your company could lose on the tax deductions if you fail to document certain expenses. IRS will not consider the expense items valid if they are not accompanied by the supporting documents.

Not Doing it Regularly

If you have been procrastinating bookkeeping, when the business is growing, can be detrimental to the success of your business. A better way would be to schedule time on your calendar to work on your books.

Finally, When you avoid these common mistakes and seek help when it’s needed, it will surely help you. You should consider hiring a Manhattan accountant if needed.