3 of the most common business bookkeeping errors

What are the most common mistakes made by business owners looking to tackle finances themselves?

Businesses of all sizes need to ensure that their figures are kept in check to be truly successful. After all, if finances fall out of kilter, the knock on effect could be a reduction in profitability, or even a variety of compliance issues linked to tax accounting.

While the most savvy companies will seek out advice from the experts, there are a few mistakes that crop up time and again when organisations try to do too much themselves. Here are the three most common bookkeeping errors:

1. Not reconciling often enough

Perhaps one for smaller enterprises, or individuals who have recently started a business in Australia, not regularly filing accounts and keeping financial information up to data can be a big mistake. Simply, reconciling is the process of ensuring that the businesses internal figures match up with its bank accounts.

The joint findings of Xero and Square suggested that this is an issue that compounds over time, with financial mismanagement becoming a much broader issue the longer it is allowed to go on.

2. A lack of long-term thinking

It can be all too easy to get caught up in the ins and outs of bookkeeping in the here and now, rather than focusing on what the facts and figures will have to add up to in the long term. Consequently, Intuit surmised that companies that build accounting practices into their business development strategies will likely be more successful over time.

3. Overly-relying on tech

There are a whole host of technologies and software packages aimed at streamlining the way businesses handle their finances. While there's certainly value in leveraging a digital solution, it's a common mistake to become over-reliant on computing power.

Good decision making and strategic planning is required, as is a discussion with an experienced and savvy accounting firm. After all, while the numbers can be crunched in the digital space, the human touch is what's needed to really understand them.

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