3 Expensive accounting mistakes to avoid
Taxes and accounting can be about as much fun as a root canal, but they're just as necessary. Both business owners and accountants know that expensive accounting mistakes are a financial buzzkill.
3 Costly Accounting Mistakes & How to Avoid Them
Embrace the digital age and avoiding drowning in receipts!
1. The Receipt Abyss
The Mistake
Picture this: You're drowning in a sea of crumpled receipts, invoices, and coffee-stained spreadsheets. It's the dreaded Receipt Abyss, and it's costing you money. Misplacing or ignoring these crucial documents can lead to missed deductions and unhappy tax seasons.
The Solution
Embrace the digital age, it's about time! Use apps and software to track expenses in real-time. Snap pictures of receipts with your smartphone, categorize them, and store them safely in the cloud. Your tax pro and your final tax bill will both thank you, and you'll swim in smoother financial waters
For more tips to automate your bookkeeping, read our blog post here!
2. The Last-Minute Fiasco
The Mistake
Procrastination is so common and I've seen way too many business owners leave their taxes until the deadline is too close to ignore. Leaving all your accounting work to the last minute and then dumping it on your accountant's desk is a recipe for disaster. It can lead to rushed, inaccurate returns and potential missed deductions. And sometimes it leads to missed deadlines leading to interest and penalties that are not tax deductible!
The Solution
Don't be that person scrambling on deadline day. Regularly update your financial records throughout the year or hire an accountant to do so, so tax season doesn't become a nightmare. Consider setting aside time each month to review your accounts, or hire an accountant who can help you stay on track.
3. The Personal Name Invoices
The Mistake
Oops, you've been receiving invoices in your personal name instead of your business. It's an easy mix-up, but it can lead to denial of deductions, and a headache during tax time.
The Solution
Make it clear to your clients or suppliers that all invoices must be addressed to your business, not your personal name. This small adjustment ensures accurate bookkeeping and saves you from navigating a messy financial tangle.