These 5 accounting mistakes might be costing you money. Effective financial management is key to your success but many of us find that lack of knowledge, frustration and even avoidance can add up to accounting mistakes that curtail future growth.

You can stop making these 5 accounting mistakes to protect your business and reduce your stress.

Accounting mistake

1: Mixing personal and professional finances

From day one, you should have a separate bank account for your income and to pay business expenses.

It’s also crucial to designate a business-only credit card. When it comes to tax time, separate statements will make submitting expenses quick and easy.

This is an easy mistake to make, especially in the early days and if you’re investing your own capital into your business. Start the way you intend to go on and get this straight from the outset.

2: Not staying on top of accounts receivable

It’s easy to lose track of which customers have paid you and which clients are late. Create a strict policy and schedule to track accounts receivable and follow up unpaid invoices.

    • communicate clear expectations from the outset
    • ask customers to pay at the point of purchase or no more than 30 days later;
    • contact clients to confirm they have received your invoice and to agree on a payment date;
    • follow up, if you take your accounts seriously, so will your clients;
    • keep records of each client’s payment history.

Make this easier to manage by taking your accounts online to a cloud-based accounting solution. These are easy to use, cost effective and make invoicing easier to send and track and have less potential for errors or missing things.

3: Not tracking your expenses online

Are you tired of chasing down missing receipts and struggling to justify claims at tax time? There’s an app for that! Quickbooks, Xero and MYOB all have apps to enhance their desktop software programs. Streamline your accounting and keep everything together, even when you’re out of the office.

4: Neglecting to plan for long-term growth

Accounting isn’t just about seeing where you’ve been, it’s about looking where you’re going and achieving your highest potential.

A lot of cloud-based accounting programs, take your tracked data and generate reports and provide analytic tools you can use for future forecasting. We’re also pretty good at this, if you’re looking for a more personal approach, get in touch.

Look into what your software can do to help you with goal setting and planning. Talk with us about which reports and metrics are most important for your business and how to get the best results from them.

5: Thinking you can do it all

Unless you’re a trained accountant, don’t try to manage your company’s finances all by yourself.

Get a trusted accountant, invest in quality systems and spend some time learning the relevant tools and trends.

You’ll feel empowered, more confident in the status of your business and your goals and start having a more love-filled relationship with small business accounting! Seriously, it’s possible. Resolving these 5 accounting mistakes, will set you up for better success by having strong foundations in place. Your business will thank you.