Team TaxReturnWala
Every small business owners dream is to grow their organization and reach heights and accounting is a very important part of it which is not as easy as plus and minus.
Small business owners plan to do accounting by themselves in order to save money but that might not be a good decision. Because accounting mistakes at times lead to financial and legal difficulties that may hamper the growth of your organization.
Spreading light on it let’s discuss this so that as a small business owners you can avoid them.
- Personal accounts mix with Business: Some people mix personal and business accounts which creates a lot of confusion at the time of finalization. Many people don’t have separate bank accounts for their businesses which is not a good way as it can make it tougher to sort personal and business transactions which will create trouble at the time of filing Income tax returns.
- No Backup of records: Nowadays people don’t keep paperwork for a long time as it’s the digital age but it’s always advisable to keep documents for at least seven years like Payroll records, business tax returns, accounting records, etc. Keeping these can help you in situations of technical glitches or other unforeseen circumstances.
- Not hiring a professional: Everyone makes mistakes and even a professional accountant will make mistakes but still hiring a professional will always minimize the risk of errors and this can help you to manage and invest more time in your business. A professional will always bring more fruits to the table which will help your organization to grow.
- No record of small purchases: In a business, we purchase a lot of things and some people might not keep records of small purchases like stationery items. But these small expenses can make a huge sum in the end and it will be very difficult to justify the expenses without the proper records.
- Opting cheapest mode: Saving expenses in business is a good thing but it should not compromise with quality as it can end up costing you more in the long run you have to hire accountant A over B due to the cheapest rates but if they keep making mistakes then a lot of your time will waste.
- Not Reconciling: Account books should be reconciled with the bank statement frequently like every month which can help in discovering the errors in due time and leads to good financial planning. Most business owners avoid this.
Therefore, accounting is an important part of the business that should be seen as an investment. These mistakes can be made by Small Business Owners and hopefully, the above points may help you in getting rid of them. Correcting even one mistake at a time can lead to profit and growth for you.
All the Best!
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