Common bookkeeping mistakes

Bookkeeping, Business - 24/05/2021

Bookkeeping is an essential part of any business. It needs to be done accurately and efficiently. Unfortunately, we can’t all be experts in everything. You’ll naturally specialise in what your business does best, but the bookkeeping still needs to get done. 

While you’re focusing on running your business, it’s easy to overlook mistakes if the bookkeeping has taken a back seat. This week we wanted to highlight some of the common bookkeeping mistakes you can look out for to make sure your business stays on track. 

Using manual systems

The digital world can seem scary, especially if you’re new to it. That’s why some businesses opt to keep manual accounts records, rather than using automated systems. It’s possible to do your accounts manually using a spreadsheet like Excel or Google Sheets, but you’re exposing your accounts to a lot more risk.

For one thing, human error will be common. Spreadsheets don’t offer a high enough level of safeguarding against incorrect data entry and other bookkeeping mistakes. It only takes one typo to cause chaos with your accounts. You don’t want to find a mistake like that when it’s too late to fix it.

We highly recommend using automated and digital accounts systems. Not only are they better equipped to catch simple errors that can cause major problems further down the road, but they offer extra security features too. For example, most online accounting software will back up your data automatically every 24 hours.

Many people now choose to use cloud-based software that can scan your receipts, input information about your cash flow and even generate invoices.

Poor record keeping

Keep accurate, detailed records. That means keeping copies of every single receipt, no matter how small. 

If you can’t provide the required evidence for business expense claims, you could be liable for additional penalties and fines from the HMRC. Not only that, but staying on top of your records will give you a clearer picture of where your business is financially, which can play a big part in business planning going forward. 

Make sure you’re updating your records at least once a month. That way if mistakes are spotted, they won’t be too far gone.

Winging it on your own

It sounds simple enough to keep accurate records of the money coming in and out of your business. It’s the fine details that tend to see mistakes crop up. 

If you’re managing your accounts in-house with no real knowledge of how to do it properly, you could end up paying too much tax, or being fined for mistakes. You don’t want to be wasting time on fixing bookkeeping mistakes when you could be focusing on how to better your business. 

Leaving it to the last minute

Doing your own bookkeeping means it might not be your priority as a business owner. If you leave your bookkeeping to the last minute, you’re much more likely to slip up. It might seem harmless to procrastinate. You’ll get it done when you get it done. 

However, this is a commonly made mistake. With bookkeeping, the workload piles up and it can quickly get to the point where you don’t have the time or energy to catch up. 

In this case, slow and steady don’t win the race. You need to be on the ball always when it comes to managing your accounts and staying up-to-date. It may not seem like the most important thing on your to-do list, but it should be.

If you’re still unsure about bookkeeping, Numero can help. Specialising in a number of automated accounts systems, with an expert team to guide you through them, Numero can work with you to ensure you’re getting the most out of your accounts. 

Get in touch with us today if you’d like to find out more about services.