Bookkeeping can be defined as how a company or organization keeps track of any financial transactions. Let’s be honest you probably knew that already. Whether you are a trained bookkeeper who is an online bookkeeper or not you could be making any one or multiple of these bookkeeping mistakes.
This applies to all varieties of bookkeeping, whether it is for property bookkeeping or any other kind. It is vital that you become aware of these mistakes as you could be making them already. Identifying them and finding a solution is the best step forward. If you somehow have managed to not make these mistakes, well now you know. Prevention is better than cure.
Adequate Record Keeping
To begin with, a lack of adequate record-keeping can cause you to be going wrong somewhere. You should be making sure that you keep track of all financial records, this is easier said than done. Small expenses can be forgotten or the receipts for the purchases may be lost. As insignificant as it might seem, this does make a difference when accurate records of both incomes and expenses are needed. In the case of an audit conducted by a licensed professional, this can save you thousands of pounds.
Overdependence on accountancy software
It does make the process a lot more convenient and is fit for purpose. However, it is important to conduct a manual audit through all the spreadsheets. There are some discrepancies that the system may have overlooked, the sooner they are identified, they can be prevented and won’t cause an issue for the bookkeeping records.
Failure to conduct bank reconciliation
This can lead to a major financial impediment. The bank reconciliation must be done on a regular basis, at least on a monthly basis, doing this would ensure that if there are any errors you can resolve them if possible or to contact your to check If the bank feeding is done correctly. Do you want to ensure that this never happens to you? Well, you’re in luck. At Carrington Blake Accountancy, we provide all the accountancy services that you require, in order for the business to run smoothly.
The Negligence of Sales Tax
We haven’t made the halfway mark just yet. Notably, the negligence of sales tax is a surprising mistake that’s commonly made in VAT computation. When the reporting and collection of sales invoices, sales taxes are overlooked, this can lead to fines and penalties, definitely something you’d want to avoid. The amounts will be all wrong as well, the sales tax would be higher in terms of what’s due and the same applies to the actual sales amount.
This is something that should be avoided when you are communicating with the bookkeeper and they know what you want. This can mean that they can cater their expertise to best suit the operational needs of your organisation.
The incorrect classification of employees
Usually, there are contractors for the business, alongside your own employees. If these are not assigned properly it would mean any taxes would be overpaid.
The over categorisation of expenses
It is something you might be doing and not even acknowledge. Your expenses can be summarised into a limited number of categories, don’t feel the need to create too many, it just adds to the process and takes unnecessary time.
What would you do if the system crashes? A lack of a solid backup for the system would mean that you have lost all your financial records. The severity of the situation speaks for itself.
You get what you pay for, it’s mostly the case
If you are currently with someone as they provide low-cost bookkeeping, you may have to take a step back and check. If the service they provide isn’t up to par it might be time for you to invest more money into a qualified accountant, where you can outsource your bookkeeping and not compromise on quality. These bookkeepers are familiar with an array of software this includes Xero bookkeepers, SAGE bookkeepers, and more. You may be asking, who I can find for just this task. At Carrington Blake Accountancy, we provide all the bookkeeping services you will need
How can we help?
Here at Carrington Blake Accountancy, we can help you by taking care of your bookkeeping needs. Contact us today for further information on the accounting services we offer.