6 Pitfalls Of Not Having Good Bookkeeping Records

pitfalls We all know that for the vast majority of people that when they hear their accountants talk about the merit of good bookkeeping their eyes will glaze over with disinterest, in some cases they may even lose the will to live. Whilst, bookkeeping may be for some a boring, and for others the most arduous of tasks, you must not take it lightly as the errors can cost greatly. Avoiding mistakes in the first place can help you from losses. However, without basic understanding of bookkeeping, avoiding mistakes can become difficult. Remember without good bookkeeping, we don’t have up to date information of which to make informed decisions pertinent to the running of our businesses. Here are top 6 of bookkeeping mistakes that business owners need to avoid in order to run a successful business:

1. Not performing bank reconciliations

As the saying goes, Cash is King, therefore keeping a track of every transaction of all your incomes and expenses on your bank statement and matching them with your business records is very important. This process should be done at least once a month. If this is done correctly, errors can be detected easily. The quicker you notice that bounced cheque, the faster you can chase it up.

2. Not having a proper accounting system

An improper system can cause a number of problems. That is why these days it is very easy to buy relatively cheap packages off the shelf which should provide you with all essential accounting solutions. Not only does this type of software save your time and money but also provides accurate reports.

3. Not keeping paperwork

Many business owners do the mistake of not having the back up paperwork. You should not be one of them and keep receipts of all the purchases and expenses. Also you must ensure that invoices are issued for all sales. In case, of revenue audits the availability of good record keeping mitigates the level of enquiries.

4. Not having organized records

As I mentioned above a good accounting package is relatively easy to obtain, however the system must be kept up to date. Having an up-to-date and accurate books enables you to judge and control the performance of your business. This will further help you to overcome any cash flow difficulties by knowing which Debtors to chase for payment.

5. Forgetting the deadlines

While running a business, sometimes you can easily lose track and forget about the deadlines and end up paying late along with the penalties. Missing the Companies Office deadline can often be the most costly. If as a small business you miss your filing deadline you may lose you entitlement to the audit exemption and this could potentially cost you thousands.

6. Failing to hire an accountant

If you want to make sure your books are managed professionally and error free, hire an accountant. Even though keeping accurate records of income and expenditure seems simple, the finer points related to the accounting matters are better known to accountants than most business owners. So, do not make the mistake of not hiring an accountant.

What Questions Do You Have?

We are happy to help. Please post your comment below or call Des McCann, Partner at Cooney Carey, on 01 677 9000. Alternatively, send him an email: dmccann@cooneycarey.ie To keep in touch, connect with us on LinkedIn.

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