It is an amazing adventure to see your ideas become reality. Due to the current economy, many individuals are starting their own businesses. This is a rewarding venture but there are many facets in which new entrepreneurs must be aware of. Production and marketing, though viably important are not the only areas in which business owners should focus on.
Needless to say, bookkeeping should be one of your number one priorities. Though many individuals feel that this is the unglamorous side of the business, and that they will get to it at some point, I continually find that inept bookkeeping is one of the top difference between making a profit and losing your investment.
If you choose to not hire a bookkeeper you will need to make sure that you are not making any of the common bookkeeping mistakes which are listed below.
- Failure to classify employees correctly
- Businesses have different types of employees ranging from full and part-time, to independent contractors. The classification as to what type of employee you have is regulated by state and federal agencies. Misclassifying an employee is very costly to a business owner and lead to numerous misfilings.
- Miscalculation of Sales Tax
- Numerous sales tax laws are based on your company’s physical address and the physical address of your customer. Numerous times business owners do not know the applicable sales tax laws and fail to withhold accordingly.
- Lacking organizational skills
- It is challenging for many business owners to keep track of receipts, finances, their employees, and their products. Organization usually falls to the wayside when you are dealing with your customers on a daily basis. This lack of organization proves futile when you are trying to prepare documentation for a much-needed loan to keep your business in operation, or you have been chosen for an audit.
- Not separating business and personal accounts
- The most important mistake that happens to business owners’ time and time again is not separating their personal and business accounts. It is imperative for not only tax purposes, but to determine the true profitability of your company to ensure that you are providing a true financial reflection of your business operations.
In order to avoid these common bookkeeping mistakes, I do recommend hiring a knowledgeable bookkeeper. The amount invested in a bookkeeper can not only save you money but can save you time and non-needed stress. If you feel you would like to hire a bookkeeper we would love to hear from you today.
