7 bookkeeping mistakes you should avoid committing at all costs

1. 7 bookkeeping mistakes you should avoid committing at all costs medium.com/@pasfirm11/7-bookkeeping-mistakes-you-should-avoid-committing-at-all-costs-74fe9bc38dbb In this article, we have put down the most common bookkeeping mistakes you should avoid committing at all costs. Bookkeeping is the most essential yet the most error-prone procedure that you perform in the course of managing your business. Regardless of whether you are a professional or an amateur bookkeeper, you are bound to make some mistakes absent-mindedly. To help you ensure you do not commit the most horrible mistakes, we have put down the most common bookkeeping mistakes you should avoid at all costs. Mistake of Miscalculation The process of bookkeeping needs you to make dual entries for all the expenses incurred and income made by your business. When you do it, the final balance will depict the same amount on both sides. But in some cases, the clerk doesn’t remember to make an entry or mention the double entry. In this case, the final balance sheet will have a contradiction at the end. At that moment, locating the missing entries among the long list of entries will be a hard task. Here, it is essential to double-check the entries or keep evaluating the books from time to time. Confusion with accounting 1/3

2. A common mistake that generally happens is that the bookkeeper may make an entry in the wrong head. This can happen due to the nature of the expenses or the same amount mentioned. This error has a dramatic impact on your books. So instance, if you mention the house rent under the office rent, the error will create a severe imbalance within the personal and professional expense account. To avoid this error, you should always maintain your personal and professional bookkeeping records separately. Using outdated Bookkeeping Software With the advancement of technology, the traditional method of keeping ledgers has been wiped off clean by the bookkeeping software. To keep up with technology, it is essential to use bookkeeping software to maintain the bookkeeping records. However, businesses consider upgrading to software a burden that can be avoided. Moreover, they also keep using the older version of the software and do not update to the newer version. This results in lower productivity and erroneous books. To avoid that, you can outsource your bookkeeping services and enjoy the benefits of the latest technologies at affordable rates. It’s a good idea to have your books reviewed by an experienced CPA, tax advisor, or outsourcing CPA firms. Also Read: Virtual Bookkeeping Not Appointing Experts Most companies are guilty of this mistake. To avoid spending a lot of money to hire an experienced accountant, they hire a novice accountant to do the work. As a result, they regularly face issues in the bookkeeping procedures. It is more than necessary to hire qualified experienced individuals who can handle the books of your business responsibly. If you find that to be heavy on your pocket, you can always reach out to the Pasfirm to outsource your bookkeeping needs. We are a team of highly qualified bookkeepers that can skillfully handle your books that disrupt your budget. Lack of Budget Plan Despite being the most important aspect of planning your business, most small businesses are likely the sideline budget planning from the start. Reported, more than 15% of the companies fail as a result of not planning the budget and a result are unable to grab the potentially good opportunities coming their way. 2/3

3. Hence, it is advisable to leverage the historical bookkeeping records and past account details to plan the budget ahead of time. This way, your business will be able to make a adhere to the budget, and the record of business expenditures and earnings will be free from flaws. Not Keeping on Your Credits Maintaining a thorough record of the credits is extremely crucial to avoid self-destructing your business. Besides, you should also have a clear understanding of your interest value and the fees to get an enhanced credit score. If you do not do it, you will not have an idea of your credit score despite paying the interests strictly on time. Not Creating Backup Since the bookkeeping process and maintaining the accounts is a completely digital process, there is a big risk of losing the data at all times. For instance, if your computer suffers physical damage, gets stolen or a virus attack wipes off the disk, your data will be gone forever. To avoid this unpleasant situation, it is essential to create a backup of your data. For this, you can use another physical drive or create a backup on a cloud medium. Conclusion Those are some of the most common bookkeeping mistakes you should avoid making in your business to avoid suffering heavy losses. To prevent these, the surest shot way is to outsource your bookkeeping needs to a proficient bookkeeping company like Professional Accounting Solutions. Professional Accounting Solutions, Inc offers timely and cost-effective accounting services including bookkeping, catch-up bookkeeping, accounting, payroll, tax, and QuickBooks consulting from their Miami and Fort Lauderdale offices. Sign up for a free 1-month to try their exceptional services. Contact us today to learn more about catch-up bookkeeping, online bookkeeping services, and other financial services, or sign up for a free trial. 3/3