Most small business owners don’t have a background in accounting. But understanding the basics of how to manage your finances is crucial to the success of your business.
Here are the top three accounting mistakes we see that hit small businesses hard.
#1. Not doing your bookkeeping regularly (or having it done or reviewed regularly). We know you’re always pressed for time (we’re running a small business too!). But you should always make sure to apply payments to open receivables as soon as they are received, put in your checks as soon as they are written, and always, always, always reconcile your bank and credit card accounts regularly against statements.
#2. Not knowing the basics of how to use Quickbooks. You don’t need to be a pro, but even if you have a regular bookkeeper, you should know the basics. It’s your business and your money after all. Here’s one example of a common mistake we see all the time. You receive a payment by check and then record it as a deposit directly into your checking account, without first applying the payment against your customer invoice. Now you’ve double-counted your revenue!
#3. Not backing up your data. Things go wrong with computers. If you are using Quickbooks Desktop, back up your data to an external drive, or even better, back it up to the cloud. If you are using Quickbooks Online, there are apps you can use to back up your data. Yes, Intuit has your CURRENT data protected. But what happens if you or someone else really makes a big mistake and you want to undo those changes and go back to the way you were the day before or a few hours earlier? Intuit can’t help you there. You need a separate backup program
If any of these top 3 accounting mistakes seem familiar to you – please give us a call on (843)-972-9284. We can help make sure you don’t fall victim to these common problems that can kill a small business.