Accurate Bookkeeping: Avoid These Mistakes

It’s difficult to always be consistent and make sure your bookkeeping is accurate. Unfortunately, seemingly small bookkeeping mistakes can lead to serious financial damage in the future. 

Without quality bookkeeping, you are opening your business up to unnecessary risks and potential penalties. Here’s a few bookkeeping mistakes to look out for:

• Not recording all transactions accurately and timely: This can result in inaccurate financial reports, making it difficult to make informed decisions about the business’s financial health.
• Failing to reconcile bank accounts on a regular basis: You can experience errors on your financial statements and it makes it difficult to track expenses. It can also result in overpaying suppliers or not collecting from debtors.
• Incorrectly categorizing expenses: Such as recording personal expenses as business expenses. This isn’t allowed and will lead to tax problems.
• Not separating personal and business finances: This can lead to confusion and make it difficult to track expenses and profits accurately.
• Failing to keep proper documentation for expenses: This can result in problems during tax audits with the ATO.
• Not tracking accounts receivable and payable properly: You may experience cash flow problems and it makes it difficult to keep track of money owed to the business.
• Failing to record fixed assets and depreciations correctly: This can result in inaccurate financial statements. It could also have a negative effect on your tax liabilities.
• Not backing up financial data regularly: It could lead to the loss of important financial data and make it difficult to recover financial information in the event of a system failure.
• Forgetting to adjust inventory levels: It makes it difficult to track inventory accurately and could result in overstocking or under-stocking inventory.
• Failing to keep track of sales tax obligations: This can result in tax problems.