Are you aware that your business could possibly be making mistakes in the accounting department? Did you know that even the simplest accounting mistake can lead to a lot of issues down the road, especially when it comes to your business’ financial health?
Identify Any Possible Accounting Errors
While it’s easy to panic or worry about the possibility of any accounting errors, the first step is being able to identify the most common mistakes, knowing what the consequences of the mistake could be, and then understanding the solution for it should anything arise.
Here is a table listing some of the most common accounting errors that could happen when running your business along with their corresponding possible consequences and solutions:
| MISTAKE | CONSEQUENCE | SOLUTION |
| Not separating business expenses from personal expenses | Not being able to identify or spending hours just identifying your business from personal expenses. This may lead to inaccurate financial reports, as well as potential IRS audits. | Set-up a separate bank and credit card account for your business |
| Recording your company income and expenses only at the end of the year | Knowing how your company is doing throughout the year will help you make timely decisions. If you only find out how your business did after your fiscal year, it would be too late to make the changes needed to help it be more profitable. | Maintain your company accounting books and try to record and reconcile accounts monthly or quarterly at most. If needed, hire an accountant to help you understand where your business is at and determine the possible changes you may need to implement. |
| Not being aware or caring about tax deadlines | Late or missed tax payments and returns lead to penalties and interests, lien against your business and/or property, or even jail time. | Be mindful of when your tax deadlines are and be ready to file and pay your taxes weeks in advance. If this is difficult, hire a professional to help you plan around it. |
| Not looking at how new technology can help make your back office and accounting tasks easier | You end up spending more time completing back office tasks rather than growing your business. | Do some research and determine how new technology can help you process payables, receivables, and other tasks. You may also hire a virtual team who can help you complete back office tasks, releasing you to focus more on your business rather than being tied down doing back office tasks. |
Want to Ensure that You Accounting Department Doesn’t Make These Mistakes?
While you might never know what’s around the bend when it comes to your accounting department running as smooth as possible, one major solution is to enlist the help of a third-party company that will make sure that your business doesn’t fall victim to these possible errors. LTD Global has been assisting small businesses and nonprofits with their accounting need for years including areas like accounts payable, invoicing, and even day-to-day booking. Contact LTD Global today to find out what we can do for you.