Bookkeeping is a time-consuming and complex task, especially when it’s one of many on your to-do list. If you don’t feel confident organising your finances, it’s easy to make mistakes, too, which can have a number of negative consequences for your business. To help you take control of your bookkeeping in Brighton and set your business up for success, we’ve taken a look at some of the most common mistakes to avoid.
Data Entry Errors
Simple data entry errors are more common than you might think! From mistyped figures to duplicate entries, these little mistakes can lead to big issues when balancing your books. It can also result in overpayments or underpayments to suppliers (or being overpaid or underpaid by a client), making it vital you double-check all of your entries when carrying out bookkeeping in Brighton.
Failing to Reconcile Financial Statements
Financial reconciliation involves comparing your financial statements and data to ensure your information is correct. Failing to reconcile makes it far likelier that you’ll have errors in your records, leading to unbalanced books and unreliable finances. To avoid this mistake, always set aside enough time to thoroughly reconcile your finances.
Not Recording Your Outstanding Invoices
Whether you have payments due to your suppliers (accounts payable) or you’re waiting on payments owed to you (accounts receivable), it’s always important to record outstanding invoices. This helps you create more accurate records, track your payments, and develop informed financial forecasts. Ensure that outstanding payments are accurately recorded so you can track cash flow and avoid overdrawing your bank account.
Mingling Business and Personal Expenses
Not separating your business and personal expenses makes it much harder to track your business finances. At Angel Bookkeeping and Payroll Services, we always advise clients to have business bank accounts and to use these for all business-related income and expense payments. When it comes to balancing books or proving purchases in a tax audit, separate finances make these tasks a lot simpler.
Principle Errors
Principle errors occur when one of your mistakes goes against key bookkeeping principles. For example, you might record an expense as a sale, or mislabel a purchase as a tax-deductible expense. These mistakes can be tricky to spot, making it even more important that you can manage your finances confidently and correctly.
Avoid Mistakes With Professional Bookkeeping in Brighton
Making errors in your bookkeeping can have significant implications for your business, from filing incorrect tax returns to making poor financial decisions. Looking for a simple way to reduce mistakes? We can help.
By hiring Angel Bookkeeping and Payroll Services to manage your bookkeeping in Brighton, you’ll have a fully qualified team taking care of your finances. Start organising your finances today by getting in touch with our team.