5 common causes of mismanaged accounts – and how to avoid them!

We’ve all experienced it: the frustrating feeling of constantly trying to keep on top of our accounts without any real success.

From dealing with unexpected fees, to forgetting when payments are due, managing finances can become a big hassle if not given the right attention. 

Luckily, by understanding the most common causes of mismanaged accounts and taking preventative measures to address them, we can make sure this doesn’t happen again! In this blog post we will look at 5 examples that you should be aware of in order to ensure your financial accounts are secure.

When it comes to running a business, there are few things more stressful than having to deal with inaccurate bookkeeping.
One of the best ways to avoid this entirely? Good financial and account management.

Not only does this save you from stress caused by mismanaged accounts, but it also helps you avoid future headaches when the time comes to track where all your money has gone at the end of the financial year.

Bad financial management doesn’t only cost you time, but in some cases, it can greatly affect your reputation, profits and productivity.

Why do so many business owners fail to wisely manage their accounts, while others handle it well and enjoy thriving businesses as a result?

Our team of Melbourne bookkeepers take a closer look at the common reasons business owners are suffering from mismanaged accounts.

1) Procrastination affects your business accounts

Procrastination is a common problem for many business owners and entrepreneurs.

It’s easy to fall into the trap of putting off those tasks that require extra effort or even delaying dealing with essential financial issues such as your company accounts. 

Unfortunately, procrastinating on these activities could mean missed opportunities and decreased profits. And this can have severe implications on your overall success in business. 

Pushing things back further and further down your to-do list is the number one cause of mismanaged accounts.

It’s hard to backtrack and record sales, profits, and expenses if it’s not done regularly. Additionally, the effort it takes to get caught up is astronomical.

Staying on top of your financial activities means processing invoices, inflows, and expenses as they happen.

This keeps the receipts from piling up and means you can tackle important bookkeeping processes like budgeting and cash flow without having to organise your accounts first.

We know you’re a busy person – business owners won’t always have the time to track, record and keep files of their transactions.

Our solution? Outsource to our Melbourne bookkeepers – not only do you get your time back, but we’ll also remove the stress of managing your own books.

2) Unclear and messy bookkeeping processes

If you’re an entrepreneur or small business owner, managing your bookkeeping is likely an important part of staying on top of your finances. 

Streamlining and organising your bookkeeping processes is important so that you can maintain a better understanding of where exactly the money’s going in and out of the company.

Other businesses fail in their bookkeeping not because they don’t have the time, but because they lack an organised process to track cash flows and their day to day transactions.

Just like any other process in your business, it’s best to have a process in place.

That means having a clear, standardised process to follow from purchasing, receivables and paying off payables, as well as other accounting processes.

Businesses with a more ad-hoc approach to their bookkeeping more often or not eventually end up with accounts full of mistakes, typos and incorrectly filed transactions.

Oftentimes, they resort to calling a Melbourne bookkeeping service to clean up their accounts.

The solution is to put in place procedures that can be easily followed by others in your company. Proper guidelines and communication sets out and effectively explains who does what and how it is done in the first place.

Additionally, implementing modern bookkeeping software can also keep your accounts clean.

Modern bookkeeping software like MYOB or Xero is intuitive and easy-to-use. The result? Fewer mistakes.

Business Concept Pile of unfinished documents on office desk Stack of business paper

3) No opportunity to hire an in-house bookkeeper

Bookkeeping is an important part of any business, but not all companies have the resources to hire a full-time, in-house bookkeeper.

Although this may be seen as a setback, there are still ways that you can successfully manage your finances and get the most out of your budget without needing professional help. 

If you ask us, the best way to ensure your accounts are being updated accurately and punctually is to hire a professional.

Businesses who value updated and accurate books and records know the importance of investing in personnel to do the job for them.

The bad news is that for many businesses, it’s not always feasible to bring on a dedicated bookie.

The good news however is that there’s a way around this: outsource your bookkeeping!

Melbourne bookkeeping services like Maximum Business Solutions are able to offer complete bookkeeping services, but without the cost of a dedicated in-house bookkeeper.

Outsourcing your bookkeeping can lead to better results when it comes to:

• Improving cash flow
• Minimising payroll problems
• Keeping your business’ financial health in check

Learn more about our bookkeeping packages to find out which one is best for your business.

4) Lack of knowledge and expertise

Handling your finances can get complicated.

Not knowing the ins-and-outs to managing big and small business accounts can easily lead to you feeling lost and sidetracked.

More importantly however, going in without the necessary knowledge or skills can lead to easily avoidable mistakes and inaccurate books.

Not all of us have a head for maths. Add to that the sheer volume of invoices and transactions that come with running a business and you have a lot of potential mistakes in the making.

Fortunately, cloud bookkeeping helps you avoid mistakes by automating much of your bookkeeping. Software like Xero and MYOB automatically sync with your accounts and other software, meaning you don’t have to perform any manual data entry or do any calculations yourself.

Maximum Business Solutions will help reverse the potential damage to your business accounts
If you ask us, the best sure-fire way to avoid mismanaged accounts is to get a professional to look after it for you!

And that’s where we come in.

Maximum Business Solutions offers bookkeeping services to all types of businesses, big and small.

As professional bookkeepers, we help you focus on growing your business without needing to worry about the financial side of things being “off”.

Our Melbourne bookkeeping services make your bookkeeping easy to understand and manage. We solve common bookkeeping headaches including:

• Accounts that aren’t reconciled with bank statements
• Incorrect BAS lodgements
• Payroll and superannuation errors
• Poor record keeping

Are your books a mess? Get in touch with Maximum Business Solutions.

Contact our team of bookkeepers in Melbourne on (03) 9589 0128 or fill in this form to take the first step towards more accurate business bookkeeping.