Friday, May 25, 2007

Top 10 Bookkeeping Mistakes By Small Business

I came across an article on which seems to have merit. They compiled a list of top bookkeeping mistakes by small buisinesses. While I don't know what the basis was behind their research, most of the points in their list do make sense. Here is what they list:
  1. Not saving receipts of less than $75: The IRS doesn't require you to save all these receipts; but if it adds further support to all the deductions you take, why not just put them all in a folder.
  2. Doing it yourself: Wouldn't your business be better served if you were able to concentrate on the actual business instead of bookkeeping. A competent bookkeeper can probably do the job with much more efficiency and accuracy.
  3. Forgetting to track reimbursable expenses: So many small business owners pay for expenses out of their own pocket either by paying cash or using their credit card. Care should be taken to account for all of these so they get properly expensed by the corporation and ultimately reimbursed.
  4. Not properly classifying employees: You can run into trouble by not classifying employees properly. See my page on independent contractors.
  5. Lack of communication: Your bookkeeper can only be as good as the information provided to him/her.
  6. Not reconciling monthly: I wish I could tell you I reconcile my personal checkbook every month, but that just isn't reality. As far as your business goes, good accounting starts with a reconciled bank account.
  7. No backup: Even with todays technology, a paperless office is just not reality. For audit purposes, a paper trail should always exist. Most everybody has had experience with a computer failure. Virus software is not perfect. Keep a backup of all your data for when the inevitable hits and don't give up on paper just yet.
  8. Not deducting sales tax: Don't include sales tax in your income figures. Sales tax should be posted to a liability account for future remittance to the taxing authority.
  9. Petty cash nonchalance: Use a formal petty cash system with a set amount in petty cash. Use a petty cash slip or submit a receipt when funds are taken out.
  10. Miscategorization or overcategorization: Use proper bookkeeping to post transactions to the correct expense accounts. Establish a 'happy median' between having too many expense accounts in your chart of accounts (web page on charts of accounts coming soon) and having too few.
Visit my website for more information for the accountant or bookkeeper including career information and links to useful sites.


Anonymous said...

Good day !.
You may , perhaps very interested to know how one can manage to receive high yields .
There is no need to invest much at first. You may commense earning with as small sum of money as 20-100 dollars.

AimTrust is what you need
The company incorporates an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.

Its head office is in Panama with structures around the world.
Do you want to become an affluent person?
That`s your choice That`s what you wish in the long run!

I feel good, I started to get income with the help of this company,
and I invite you to do the same. It`s all about how to choose a correct companion utilizes your funds in a right way - that`s AimTrust!.
I earn US$2,000 per day, and what I started with was a funny sum of 500 bucks!
It`s easy to start , just click this link
and lucky you`re! Let`s take this option together to feel the smell of real money

Anonymous said...

Good day, sun shines!
There have been times of hardship when I didn't know about opportunities of getting high yields on investments. I was a dump and downright stupid person.
I have never imagined that there weren't any need in large starting capital.
Now, I feel good, I begin take up real income.
It gets down to choose a correct companion who uses your money in a right way - that is incorporate it in real deals, and shares the income with me.

You can ask, if there are such firms? I have to tell the truth, YES, there are. Please be informed of one of them:
[url=] Online investment blog[/url]

Anonymous said...

Glad to greet you, ladies and gentlemen!

Sure, you’ve heard about me, because my fame is running in front of me,
my name is Nikolas.
Generally I’m a venturesome analyst. all my life I’m carried away by online-casino and poker.
Not long time ago I started my own blog, where I describe my virtual adventures.
Probably, it will be interesting for you to read my notes.
Please visit my diary. I’ll be glad would you find time to leave your comments.