How to Avoid Making These 3 Most Disastrous Business Accounting Errors

Business Accounting Errors
  • Don’t fall victim to these common business accounting errors. Here’s how you can avoid a costly disaster.

    As a small business owner, business accounting errors can cost you more than just a few dollars. Too many owners have to close up shop because of an avoidable mistake. However, it’s possible to prevent many of the most common accounting and bookkeeping problems. Here’s what you should be on the lookout for the next time you handle the books:

    Careless Data Entry Errors

    You know the importance of entering every credit and debit as soon as they occur, but do you always remember to double-check your work? Think back to grade school math. Your teacher more than likely taught you to review your answers before turning in your homework. If you did, you may have caught a few mistakes that could have lowered your semester grade.

    The same idea holds true for small business accounting. Did you put a comma in the wrong spot? How many zeros should that figure have? It’s way too easy to enter $10,000 as $1,000, and if you do, you may find yourself in big trouble come tax season. Before you close your books for the evening, have a second set of eyes look over your entries for any data entry errors.

    Doing It All Yourself

    Running a small business is a rewarding experience. As the owner, you’ll find yourself wearing many different hats. However, you shouldn’t try to handle every aspect of your company all alone. Bookkeeping errors often occur because the business owner tries to tackle their accounting needs on their own. Unless you manage a large corporation with a full-service accounting department, the in-house method may not be the best option.

    Accounting requires accuracy and the ability to meet firm deadlines. Missing a quarterly payment, for example, may lead to costly penalties. Misplacing documents or inaccurately reporting your cash flow could mean the end of your business. Working with an accounting expert is the best way to streamline your records and keep your books in order.

    Fudging Your Income

    If you’re like most business owners, you don’t want to defraud the government. You understand the importance of paying your fair share in taxes. However, income omissions are one of the most common accounting mistakes reported by the government. Under normal circumstances, the IRS has three years to audit your return. But if you omit 25% or more of your business income, that window turns into six years.

    What’s the best way to avoid this situation? Report everything. Even if you only make a small amount of cash, you need to include that figure in your tax return. Make sure your accounting ledger accurately reflects every source of revenue for your company, even if it’s only a few cents.

    Leave Your Accounting to the Pros

    To err is human, but in the accounting world, it can also mean the difference between success and failure. That’s why it’s so important to leave your accounting needs to the pros. For three decades, the experts at Incompass Tax, Estate & Business Solutions have provided small businesses with trustworthy accounting services. From balancing ledgers to handling taxes, we do it all. We strive for 100% accuracy and stand behind our work. Connect with us online if you’re ready to avoid accounting errors for good.

    Ready to Get Your Money Back From the IRS?

    Bring us up to 3 years of past taxes and we’ll find ways to save you money, when we do we’ll help you file to get your money back from the IRS.

    Schedule Tax Evaluation
    Get Money Saving Tips & Updates
    • This field is for validation purposes and should be left unchanged.