Small business entrepreneurs are often novices in accounting matters. Thus, hiring experienced or professional accountants can help you avoid any long or short term accounting mistakes. In small companies, an accountant must keep track of various entries that take place throughout the day. This is a complex and responsible job that needs concentration, accuracy and intensive knowledge of accounting. To avoid the pitfalls of accounting and ensure smooth business, small entrepreneurs nowadays hire accountants in Yeovil.
However, here are a few mistakes that, if done by the accountants, can hamper the smooth business operations.
4 bookkeeping mistakes that every accountant should avoid
Bank account and software not connected
Connecting the bank account with the accounting software can ease your recording process. Many bookkeepers make the mistake of recording all the transactions manually. It then makes the job tedious and complex. Moreover, you might end up making mistakes as well. Connecting the bank account with the software will ensure that you can spot any bank fraud as well.
No knowledge of capital purchase and expenses
In most cases, the bookkeepers try to write off the large capital asset as an expense. However, for accurate business profits, an accountant must know the difference between capital purchase and expenses. Knowing the difference is essential because capitalised items tend to depreciate over time, whereas capitalised expenses need to be recorded as and when they occur. If your accountant gets confused, then the whole accounting expense will get messed up.
Use a credit card for personal expenses
Business owners generally have access to many credit cards. However, these cards are generally taken for business expense purposes. However, many times, the accountant makes the mistake of using the credit card for personal transactions. This hinders the profit levels of the business.
Unable to keep proper accounting records
Although the size of your business is small, it is the accountant’s responsibility to keep a record of all probable transactions that are occurring on a day-to-day basis. Whether small or big, your business’s size, the same might get audited from time to time. Hence, if your accountant fails to keep track of the transactions, proofs and purchases, and proofs of receipt, you might face problems during the later stages of the financial transactions.
Whites Chartered Accountants based in Yeovil offers experienced accountants to handle accounts, taxation and financial advisory services. Check our website for more details on our services and hire accountants from us.