Common Mistakes in Bookkeeping
Bookkeeping is the first ladder in the term of accounting. It involves recording the daily financial transactions in a systematic way. Accounting starts where the bookkeeping ends. Bookkeeping is done on the simple base “DOUBLE ENTRY SYSTEM”.
Bookkeeping is not a simple task as seen. It involves correctly recording and classifying the business transactions in the same manner they happen. It is also been focused that the classification is done and matched to the nature of transactions.
Bookkeeping in the small business is the same matter of concern. Bookkeeping and accounting is done by the person appointed by the firm. It is wisely said that the human being is a statue of mistakes. And he is the only by whom mistakes can occur. While doing bookkeeping work, the process can also suffer from several mistakes. The bookkeeping process can make and break down the growth of any business organization.
Common Mistakes in Bookkeeping
Although, the mistakes incurred by the bookkeeper have their remedial measures along. But the mistakes are very simple and common. It must be first accounted that be concerned with your work. Avoid mistakes maximum as far as possible.
Some of the common mistakes which are done by bookkeepers while preparing the accounts are as follows:
Ignoring Accounting Principles: The main mistakes usually seen in the bookkeeping and accounting process is of ignoring or having improper knowledge of accounting standards and principles. This will result in the lower accuracy of the financial statements.
Avoiding Reconciliation: It is very vital to make the bank balances equal at the end of every month to make the calculation easy at the end of the year. And it is done by the way of reconciling them. Some of the bookkeepers ignore the reconciliation method and does not make the balance equal.
Inaccurate Classification: The misstatement in accounting keeping is the way by not correctly classifying the expenses and income as per their nature. Usually when the classification is done in the right way, then it is necessary that the account can be unbalanced.
Not Saving The Data: Usually the bookkeeper ignores to save the recorded and processed data and even the data backup is also not done. Uncertainties can be arises at any point of time, and there can be the need of information at any time.
Improper Cash Management: It is very necessary to keep track of the cash expenses and to manage them properly. Cash is the daily and basic requirement of any firm. And if there will be improper cash management, all the business operations will suffer.
Can’t Separate The Business And Personal Expenses: Business entity and the business owner have a separate legal entity as per accounting norms. Their transactions, income, and expenses are to be allocated and to be classified separately in the books of accounts. Some bookkeepers are not able to differentiate between both.
Credit Card Entries: The transactions occur in the credit card have the opposite way to enter into the books of accounts. Card entries are sometimes difficult to handle. But the employee manages to handle them as far as possible. This may arise in errors in entering the data.
Lack of Planning: Planning is the foremost step in doing any work. Errors only take place, when there is a lack of proper planning before doing accounting and bookkeeping. Absence of planning results in lack of proper control and direction, due to which the end result of accounting and bookkeeping may suffer.
Not following the Experts Advice: Seniors are always our seniors. They have higher expertise and knowledge in accounting and bookkeeping. It will be right if you always follow their instructions and advises.
Need A Bookkeeper?
Accounting Outsource Hub has specialized services in maintaining your books of accounts. We do not give any chance of mistakes in accounting, as we are familiar with the accuracy required in the bookkeeping. So you can outsource your bookkeeping services to us. We have the facility of maintaining the general ledger account which is useful in predicting the mistakes if any occurs. We double check the data entered by us before sending it back to you.
Our bookkeeping services are flexible. They can be customized as in accordance with your needs. And you just have to have as per your requirements only. So whether it is peak season or not, we will always provide you with effective management of your data.
Contact us for more info or for free demo.