5 Mistakes Small Business Owners Make with Their Accounting

As a personal assistant for an accountant, I can't tell you how many times small business owners make these mistakes. It may seem like it is the right move for their business at the time, but in reality it’s only delaying their business success and wasting their valuable time. Here are five common mistakes made by business owners.

Seeing an Accountant as an Expense

When your business is still small, it’s understandable that you are trying to save as much money as you possibly can, but avoiding paying an accountant can actually harm your business. It sounds counter-intuitive, but an accountant can help you cut down costs because they know the loopholes in the tax code.

Trying to Do Everything Themselves

Sometimes small business owners are solo-preneurs instead of entrepreneurs. They don't realize the incredible amount of time they are spending on each task. I’ve seen entrepreneurs doing their own bookkeeping and even financial statements. This might sound cliche, but as a business owner you should be concentrating on what you do best, which is growing the business and managing it, not on accounting or marketing work.

Terrible Record Keeping Skills

Many entrepreneurs don’t have the attention to detail and organization skills required to maintain their records and expenses organized. Sending half of your bank statements and receipts won't show enough proof to the IRS that your transactions are factual. If you hate carrying receipts or bank statements, you can use software like Quickbooks online and take pictures of your receipts and have your bank statements sent via email every month. Keeping your files stored and organized will save you time and money. Plus your accountant will love you, and you will be reducing paper waste.

Not Asking Your Accountant for Advice

Usually, accountants offer unlimited consultation or some kind of advice if you sign up to their services. Asking for advice is as easy as picking up the phone and calling your small business accountant. You have to remember that they are entrepreneurs as well, and spend years in school getting certified in accounting. Gaining knowledge from an accountant is priceless.

Not Consulting With an Accountant at the Beginning

Did you know that a lot of business are running inefficiently due to the wrong business structure? As I mentioned before, business owners try to do everything themselves, not knowing the real result of the decisions they make. If a business has the wrong structure. The business owner will end up paying a lot more money on taxes and a lot more setting up the business. Consult with an accountant before you start your business. I can't stress how important this is because a lot of business owners come to us because of this simple mistake.

Everyone makes mistakes and that's okay. You can’t be perfect from the beginning, but you can try to do your best. The fact that you started your business is a big step already. The only thing you need to do next is to educate yourself so you can make the right decisions. Reading articles like these or subscribing to email newsletter can get you ahead of the game. Your business is your baby and you need to take proper care of it so it can grow big and healthy.