14.01.2022
ENTREPRENEURSHIP: THE MOST COMMON MISTAKES IN CORPORATE ACCOUNTING
Accounting is a pen of every business, which is not just necessary, but absolutely mandatory. Accounting is an integral part of the development of a successful company. The financial part of the business should be calm and be a source of reliable information that can be used to develop your business.
Financial reporting implies a relatively high risk of error, as accounting involves taking on large responsibilities and working under high pressure, meeting deadlines and strict procedures, resolving cases on a daily basis and wandering through the tax and accounting regulatory jungle.
However, the desire to save in important aspects such as accounting would certainly be a bad joke for any young entrepreneur. See the most common mistakes that most small business owners and growing businesses tend to make.
Self-management of your accounts
When your business is small, with limited income, keeping accounts at home may seem like an attractive alternative. But instead of saving you some money, this option often leads to unforeseen costs. A professional accountant would cost you more, but it would also save you a lot of money - from tax breaks that you don't know about, to avoiding mistakes that you wouldn't otherwise notice but are easy to identify by a professional.
Trusting an unqualified accountant
Delegating accounting responsibilities and activities to employees and associates without the necessary accounting knowledge can become a huge problem. For a growing business, sometimes outsourcing (accounting services outsourcing) to an accounting firm can help you focus on other important business endeavors.
Doubtfully cheap services
Choosing the cheapest services is not very good. Quality work costs money. Remember that accountants are qualified experts who are constantly updating their knowledge, because tax regulations and laws change frequently. If you invest more money in professionals who keep quality accounting, you will probably soon start making profits.
Proximity to your office is not a factor
Don't trust an accounting firm just because it's close to your office. The opportunity to have an accountant very close to you is really tempting, but it narrows your circle of potential companies whose services you could use. Such tactics are not recommended, because in this way you really limit your choice and opportunities to get quality and effective accounting services.
Accounting services have certain prices
Don't be fooled by the prices of accounting services. There are many unscrupulous companies that allow themselves to deceive their customers solely for profit. Find out in detail how the prices for the services are calculated and how flexible the offered packages are. Accounting firms usually have a basic package of accounting services and any change in it must be reflected in the price.
After finding the right accountant
When you find a qualified accountant, you need to take the time to incorporate it into the intricacies of working specifically for your company. Without proper knowledge of your accounting procedures, any seemingly minor mistake can lead to a loss of serious income. No less important is the existence of an internal control system to reduce the risk of human error or professional fraud.
However, if you yourself have the necessary knowledge and ability to personally deal with the accounting of your company, you should keep in mind some major mistakes made in the process of work.
- You do not issue invoices on time for the due payments and when preparing tax reports you find yourself overwhelmed with a bunch of undescribed customer payments and income statement, which makes no sense;
- Do not keep information and receipts for expenses incurred, which in turn can lead to a number of tax, accounting and other problems;
- You do not report payments made in cash and forget about them, which can cause many inaccuracies and errors;
- You postpone keeping records for later, which can lead to inspections, increased debts that will never be paid, and errors in invoices that will be difficult to prove at a later date;
- You make mathematical mistakes such as entering numbers in the wrong place, inability to correctly round numbers or errors in incorrectly transferred data;
- You allow discrepancies between bank statements and accounting records, and from time to time small expenses and amounts that you do not think about remain outside the records;
- Genuine omissions in the recording of small transactions, especially in retail sales, where multiple payments are made in cash and when small amounts go unnoticed;
- You start working on projects without determining the maximum costs you can afford, which is due to gaps in setting budgets for your individual projects;
You assume that sales are the equivalent of cash flow, but this is not correct, as it distorts the real state of your business and can mislead you and your business partners.
If your accounting budget is still really limited, you can always take advantage of automated accounting sites that make tedious processes more accessible. They give you the opportunity to enter documents yourself and make inquiries in real time. In this way you ensure a monthly closing on time and at a significantly lower price.
