5 COMMON BOOKKEEPING BLUNDERS TO STAY AWAY FROM
No one likes to deal with errors, but we must. My approach is to acknowledge the error, find a solution, and document to prevent future mistakes. But let’s face it, most like to play the “blame game”, where we get stuck in the cycle of the error itself. So, this article will deal with 5 of the most popular bookkeeping blunders you should watch out for.
Blunder #1 – Stop mixing personal and business expenses in the same checking account. I think this one speaks for itself. As much as we would like to argue to the contrary, that vacation you took to Brazil was not a business trip.
Blunder #2 – Do not post date checks. Don’t write that check if you don’t have the money. Rubber money does not bode well with banks and vendors.
Blunder #3- Don’t pay your bills late if you can help it. Try to keep a good credit standing. If you’re in a cash crunch, call your vendors and work out an alternative plan. They will be more apt to work with you as long as you keep the lines of communication open. Trust me, they will appreciate your honesty. In this case SILENCE IS NOT GOLDEN!
Blunder #4- Everyone is not an independent contractor. Educate yourself on the difference between independent contractors versus employees. You could save yourself a lot of time and heartache during tax season.
AND THE BIGGEST MISTAKE OF ALL…………………………….
Blunder #5- CASH TRANSACTIONS. If at all possible, please don’t make any cash transactions in your business account. This is an accounting nightmare, because generally you will not keep the receipt or properly categorize the transaction. All transactions should be made by credit card, check, money order or other method. Documentation is a must, and it’s hard to trace cash transactions without the proper receipts.
Partnering for your success!
Jacqueline E. Ford
Financial Strategist
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