Talking Cents

Accounting mistakes that small businesses should avoid

Small businesses are “prone” to simple accounting mistakes due to the flowing of money in and out constantly. “Prone” to mistakes does not mean that you can’t avoid.

Read on to be “resist” to simple omissions.

Mistakes like clearing checks in the wrong account or entering a transaction wrongly, e.g. $630 as $63. Or even entering it twice just makes it worse! But not fret small business owners; you (or someone) just need a few hours and little extra effort at the end of every month to balance checking accounts. To maintain consistency, get your accountant to check it quarterly. In order to increase security levels, have separate persons doing the accounts and the one paying bills.

Another suggestion, we, small business accountants, have for you is to ask your customers to pay you within 30 days. No small business want to be their customers’ personal bank. It will be great to have a follow up schedule and follow it strictly. Follow up if payment is not received.

A simple rule with zero exception, make sure you match your bill with a purchase invoice!

Always monitor the vendor list in your accounting software because creating invoices from “non-existing” vendors is the easiest way employees steal from your small business. Thus, make sure you control the ability to create new vendors.