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5 Common Accounting Mistakes to Avoid: Woman reviewing budget

5 Common Accounting Mistakes to Avoid

Running a business is hard enough. Beside the every-day tasks business owners take on, accounting can be one of the most difficult chores to accomplish. But as a business owner, you’re never alone when it comes to adapting to the changing financial and business economy. 

At DDL Accounting, it’s our mission to provide you with optimism and clarity when it comes to your bookkeeping, strategic planning, and tax preparation. To equip you with the tools to increase the ease of your business efforts, this blog will cover 5 common accounting mistakes and how to avoid them.

1.     Inaccurate records

Data-entry is not for everybody, but for your financial success, keeping accurate records is essential for tracking where and what your money is going towards. One major mistake businesses make when it comes to accounting is inaccurate record keeping. Reconciliation between your books and bank account is a perfect example of this. This activity often goes over-looked but is essential for your business’s success. For example, funds that are on your books that failed to be deposited might be costing you more than you realize in taxes, or could be giving your inaccurate assumptions about your business’s growth.

Keeping accurate records allows you to be constantly aware of your cash capital, check for fraudulent activity, and stay mindful of all financial activity happening in your business. Don’t worry if record keeping isn’t your strong suit. At DDL, our team is proud to provide a high-level of service and expertise in this area.

2.     Data-entry errors

Similar but not the same as inaccurate records, data-entry errors are another mistake when it comes to accounting errors. Human error, an over-loaded team and lack of training are all culprits of missing information. Lack of documentation, small transactions missing from your books and the monotonous feel of accounting to an untrained employee will all cost your business in the long run.

Ensuring that another set of eyes reviews the books can help prevent costly mistakes. You can always count on DDL’s team of skilled professionals to help keep your accounts tidy, accurate and clear.

3.     No separate business and personal account

This is a task that you may initially see as an added chore, but it’s importance cannot be over-stated. Keeping separate accounts between your business and personal expenses ensures your tax process is an effective, effortless process, without the hassle.

If this is something your new business has yet to implement, or if you’re a seasoned business owner who has yet to separate your accounts, speak to one of our advisors today to get started.

4.     No clear budgets

With the above problems in mind, money can quickly start to stack up without notice. Even if your project or venture starts off clear and concise, failing to set a clear budget from the get-go can result in your company going in over its head on a project that will end up costing more than you can afford.

Take charge of your financial success today. If you want to improve your accounting literacy to set budgets and plan your business with confidence, read our blog about key accounting terms every business owner should be aware of.

5.     Poor communication with your accountant

Keeping your accountant informed of any big personal or business decisions can help you save money with cost-effective solutions. Small mistakes may be costing you more than you know and forgetting to inform your accountant of details as soon as possible may leave you with missing money and no way to account for it.

Luckily, when it comes to your financial success, our professionals at DDL are educated, experienced and informed when it comes to providing you with reliable results in your business. Request an appointment today to get started with advice that makes a difference.

Tuesday August 2, 2022