Are your books a mess?
Not sure if your accounting is up to par?
Accounting mistakes, small or large, can be a huge headache for you and your company.
In some cases, a single accounting mistake can sink your entire business.
How?
One mistake can be the catalyst to a string of seemingly great decisions that turn bad over time.
Top Owners and Executives know that spot-on, accurate financials are vital to the growth and success of any company.
That’s why when it comes to outsourced accounting services, it takes more than an AI accountant to get it right.
With more than 15 years of experience, I deliver spot-on, accurate reports weekly, monthly, quarterly, or whenever you’d like so you know exactly where your business stands.
This is where outsourced accounting and bookkeeping can help you a ton with your company’s growth. I’m your local, expert outsourced accounting department who does it all for a third of the cost.
As your Outsourced Accounting Department, I’m going to share the 7 accounting mistakes that could sink your business.
Watch for These 7 Accounting Mistakes in Your Business
Let any of these accounting mistakes happen repeatedly over time, and you’ll find that your business slowly (or quickly) erodes into a failed venture.
Watch for these 7 accounting mistakes:
#1. Balances and Ambiguous Accounts
If you see balances or accounts defined as, Ask My Accountant, Unreconciled Difference, Clearing Account, Uncategorized Assets/Expenses, or Miscellaneous, then you’ve got a problem festering beneath the surface. These type of ambiguous definitions or accounts spell disaster on the horizon. Not categorizing these balances or accounts properly can come back to bite you during tax season, either this year or years down the road. Depending on how big the bite is, the event of reconciling these balances and accounts could force you to close your company’s doors.
#2. Uncleared Checks in Bank Reconciliation
A large number of uncleared checks in bank reconciliation over 6 months old is a huge red flag. If those uncleared checks string out over years, you’ve got a huge problem. These uncleared checks are unofficially putting your accounts on hold until they clear. This means any financial reporting that does not include these transactions neglect your actual financials. This is money you can’t account for going out the door, which means you’re making financial decisions based on incomplete or inaccurate information.
#3. No Credit Card General Ledger
If credit card statements or accounts are not included on the balance sheet, you’re ignoring that debt in your financial decisions. While credit cards may or may not get paid off every month, it’s still important to see what is owed on every single account for the business. This gives you the accurate overview of your financial position. Ignoring credit cards when looking at your balance sheet puts your business at risk for taking a position it cannot recover from.
#4. Payments Get Coded Incorrectly
Similar to number one, if you’re simply dropping payments into one account without itemizing those payments, this can get lost in Accounts Receivable, Accounts Payable, or otherwise inside your accounting system. This means that on a financial report you may be seeing positive cash flow, but because of inaccurate financial reporting in your software, you could be at a loss. This common mistake can cause huge issues over time for you as an Owner or Executive.
#5. Missing Basic Accounting Practices
If you do not collect w9s, don’t file 1099s, and do not close out your books, you’re company’s financials are on borrowed time. Eventually, the IRS, your contractors, or your own financials will catch up with you to force reconciliation in a financially and emotionally painful manner. Not taking care of basic accounting practices can ultimately sink your business due to a variety of owed or backed money you can’t afford to pay out.
#6. Accounts Receivable Routinely Behind 90 Days or More
If your A/R is routinely behind 90 days, you’re running a company without the cash flow you need to keep the doors open. 90 days of unpaid invoices means your clients are not keeping up with their obligations or you are not keeping up with your invoices. Cash flow is the lifeblood of business. Not collecting on invoices means your suffocating your business to death.
#7. Credit Memos Inappropriately Applied to Incorrect Invoices
If a credit memo is applied to the wrong invoice, you’re handing out free money without regard to how it will impact your bottom line. Allow for credit memos to be applied too often, and you put your business at risk for going under. Credit memos can be used to offset incorrect invoices, but it’s important to check and double check that the credit you’re applying is correct before doing so.
It’s not enough to keep track of your financials in a spreadsheet and hope your AI Bookkeeper gets it right.
With more than 15 years of experience, I deliver spot-on, accurate reports weekly, monthly, quarterly, or whenever you’d like so you know exactly where your business stands.
How Do I Hire Virtual, Outsourced Bookkeeping & Local Accounting Services & Avoid These 7 Crucial Mistakes?
Hire me, your Local, Master Outsourced Bookkeeper & Expert Virtual Accountant, today.
I bring your books current the very first time. Bringing back months and years!
I deliver accurate, spot-on reports weekly, monthly, quarterly, or whenever you like without fail.
And, I help you forecast your financial future so you can know exactly where your business stands financially.
Don’t let behind books and inaccurate accounting get in the way of growing your business.
