The most common bookkeeping mistake is failing to record all transactions in an accurate manner. This can result in inaccurate financial statements and tax returns.
Not Keeping Good Records
If you’re not careful, you might find yourself in trouble with the IRS. It’s easy to make mistakes when recording transactions, especially if you’re new to bookkeeping. Make sure you keep good records by using a double entry method.
Failing To File Taxes
One of the biggest mistakes small businesses make is failing to file taxes. This is because they think they will never owe any money, or they simply forget to do so. However, if you fail to file, you’ll end up paying penalties and interest charges.
Overlooking Small Expenses
If you’re not careful, you might overlook some small expenses that add up quickly. These include things like parking fees, postage, and even phone bills.
Ignoring Sales Tax
Bookkeepers often forget to account for sales tax when calculating invoices. This means customers will pay more than expected, and businesses will lose money.
Forgetting To Record Transactions
If you’re not sure whether you need an accountant, consider these three questions: Do I have any employees who work for me? Do I have any contractors who do work for me? Do my clients ever ask me how much I charge them?