Beware Small Businesses: 2 Common Bookkeeping Errors

Every business owner, no matter how big or small, needs to perform correct bookkeeping. Unfortunately, even the smallest mistakes in bookkeeping or calculations can result in financial losses. Tax services in Manila also emphasize that bookkeeping affects tax compliance. Erroneous records, even unintentional mistakes, would result in penalties like interest arrears and surcharges.

As an entrepreneur, you must be able to account for every single centavo. If you want your business to thrive, you have to track and follow the inflow and outflow of money. The last thing you need is stress from preventable mistakes. Bookkeeping mismanagement will make things worse because you’ll have to painstakingly backtrack and trace the problem. It’s best to avoid that altogether by being aware of the two most common bookkeeping errors. 

Error 1: Not Getting Professional Assistance and Advice

Many entrepreneurs do not particularly enjoy doing math. This includes working with spreadsheets and basic operations like addition, subtraction, multiplication, and division. However, most businessmen are surprisingly averse to professional help and insist on doing their own books to supposedly save. Unfortunately, someone with no experience takes more time and makes more mistakes compared to an expert. These errors could lead to cash flow issues and increase frustrations. In the long run, intending to save can cost even more money.

It’s best to seek help from bookkeeping services in the Philippines because the pros have skills, knowledge, and experience. They will help you manage your books efficiently. Since they are trained, they can do things swiftly and with precision. Hiring a CPA to work on your accounts can be a godsend. They can help you spot existing errors to reconcile your cash flow. Furthermore, they are abreast of regulation changes which could have a huge impact on your books.

Most of all, seeking help from professional accounting services in the Philippines equates to free time and peace of mind. When you’re not wasting your time number crunching and stressing over your ledgers, you can have more time to focus on other tasks, whether it’s developing new products, marketing your goods, meeting investors, supervising employees, etc. Having a bookkeeper gives you an ally with a fresh set of eyes to monitor your financial records and ascertain your financial health stays in tip-top shape. Although you have to pay a small retainer fee, the time, money, and energy saved from professional help are priceless. 

Error 2: Failing to Organize and Reconcile Essential Documents

Most business owners are often juggling many tasks in a day, that’s why it’s understandable why they fail to collate and organize essential documents. It may be easy for you to forget where you’ve kept sales invoices, official receipts, pay stubs, charity acknowledgment receipts, consignment sales, merchant data, inventory lists, etc. Unfortunately, you need supporting evidence when you do your year-end audit to check for profitability or file your taxes. 

Hence, you can’t lose the precious paper trail because disorganization could lead to mismanagement. It would help to have a pro who can organize these papers, and reconcile books with bank statements to monitor the overall health of the business. Fixing these papers could be cumbersome for someone without proper training. 

Reconciling accounts and tracking documents can be complex and time-consuming processes, which is why professional help is advisable. Remember, when your books are organized, you can also quickly identify the flow of money. You can spot inconsistencies and track income or expenses. You’ll know how much money you have at any given time. It’s beneficial to know these data so you can nip any issues in the bud before they escalate. 

Avoid Bookkeeping Mistakes with Professional Help

Outsourcing the complex tax of bookkeeping with a CPA means your records are accurate. When your records are clean and clear of inconsistencies, you can make educated business decisions. As the saying goes, knowledge is power. You can only have access to this power when your records are correct. 

As a business owner, you should avoid these top two bookkeeping errors that could mess up your operations and result in losses. If you wish to enjoy profitable operations and scale up your business, professional advice is crucial. Leveraging professional services will allow you to optimize your resources. Reach out to our team of CPAs for guidance. We offer accounting and bookkeeping services in Pasig.