Whether you run a small business or are involved in finances in the workplace, it can be a complex area to get a handle on. It’s worth investing time in familiarising yourself with the basics of accounting – as bad accounting can have potentially devastating consequences on your business. Today we’re getting back to basics and taking you through some of the most common mistakes business owners make when it comes to keeping their finances in check.
Sweeping it under the rug
Perhaps one of the most common problems accountants face is businesses who have ignored their bookkeeping and financial paperwork. By sweeping paperwork under the rug instead of staying on top of it, you can risk digging a deeper financial grave for your business.
Organisation is key to successfully managing your business finances, especially when it comes to tracking performance. Failure to confront things head-on could lead to inaccurate financial reports – and these can be particularly dangerous if you’re experiencing cash flow problems.
Mixing your personal life with business
The number one rule for business accounting is keeping your expenses separate. Be strict with your purchases, ensuring all business purchases go on the company card – and make sure you get a receipt! By mixing your expenses, you could be missing out on the tax deductible benefits awarded to small businesses. This is especially important when using company accounts to pay for personal items, as this can result in fines and even legal action.
Not hiring an accountant
Many start-up businesses and entrepreneurs fail to realise the role that accounting plays in establishing and running a business. In an effort to cut costs, it may be tempting to try and handle business finances yourself – however, as work volume increases, it can become quickly apparent that a professional is needed. A professionally qualified accountant can provide a number of services, from providing advice on structuring your business to ensuring legal and financial compliance – not to mention saving you a great deal of money on unnecessary expenses.
For the ultimate protection, leave your accounting to the professionals. Insight Accountancy services clients throughout the North East, providing comprehensive accounting solutions, from payroll to tax planning. Our cost effective accounting services can keep your business on track to success.