Learn Six Financial Mistakes Business People Make

As a business person, it is imperative to get involved in every aspect of your business operation.  However, this does not imply that you are a professional in everything.  You may have the ability to handle customer relations, but when it comes to accounting, you may need help from a competent accountant.  Financial mistakes can greatly affect the growth of your business, or tarnish the reputation of your business. Moran Accountants - Accountant in Melbourne helps you avoid these common mistakes you are likely to make.

Lagging Behind in Reconciliations and Entries

For business persons, time is definitely not on your side as you have too much to do within a limited period of time. If you let months pass without making the right entries in your books or reconciling credit card statements, business checking statements, or sales tax accounts, you will require a lot of time to have up to date financial records. Making good financial decisions will also be very challenging.

Not Understanding the Accounting Software

After selecting an accounting software, it is imperative to understand it fully. However, due to the hurry of setting up a business, some business people rarely take the time to understand their accounting software.  This can make them make heinous financial mistakes.

Not Knowing How Financial Reports Can Help

You do not do financial reports to avoid problems with the government or know the amount of money you have in the bank.  Accounting is a powerful tool to help you make sound financial decisions. It also acts as a yardstick to measure if the business decisions you make are worthwhile. Moran Accountants – Accountant in Melbourne can help you make use of financial records for the benefits of your business.

Mix Personal and Business Finances

Most business people mix a costly mistake of mixing their own personal finances with that of their businesses. You need to separate the two in order to clearly understand the amount of money you use for business and that which you use for your personal needs.

Trashing Receipts

All receipts need to be retained as they give answers to any gap or mistakes in accounting records, and also offer numerous deduction opportunities during tax computation.  Also, receipts can save you when IRS comes to verify your business records. Lack of the right receipts can lead to IRS deeming related financial entries as untrue deductions thus penalizing you.

Making Math Mistakes

In a hurry to maintain the day’s record, it is very probable to make math mistakes, even when using reliable accounting software. Math mistakes may result from making typos or posting the wrong entries on an account.  If not checked, these math mistakes can be carried forward to subsequent months, leading to poor decision making.

The above are some common mistakes business people make when they do an accounting work on their own.  As you know, a small financial error can be detrimental to the financial health of your business. Do not risk your business health. Hire Moran Accountants – Accountant in Melbourne to help you out.

Post Author: Harry Bennett