With more than 2.1 million small businesses based in Australia, there’s more advice out on the internet, over the radio and on TV than ever before about how to run your business. From marketing and social media to bookkeeping and accounting, we’re saturated with advice!
Yet we still keep seeing business owners making the same fundamental bookkeeping mistakes.
The reason for this confusion? There’s no clear answer. Is it an overload of information? Are too many people trying to “do it themselves?”
Bookkeeping is one task that should not be mishandled.We applaud those who start off with good bookkeeping practices. For those who are struggling to manage their books, that’s a clear sign that you need a little support.
We’ve put together a list of bookkeeping errors small businesses commonly make, often in the first stages of their business. The key to success is realising these mistakes and correcting them as soon as possible, and not allowing them to become ingrained workplace culture.
Mistake 1: not tracking expenses
If you haven’t already learned when managing your personal expenditure, expenses sure can add up quickly. This lesson is doubly important when managing your business’s financial information.
The best way to manage your finances and curb those avoidable expenses is to simply keep track of everything you spend money on. Hanging on to all your receipts and storing them digitally is hardly extra work, but does require a little forethought.
Being able to visualise month-to-month spend is often enough to shine a light on where you could be reducing spend and saving money.
Mistake 2: no monthly reconciliations
Monthly reconciliation is a process that confirms that the balance in your cheque book matches your corresponding bank statement. It’s really helpful in avoiding balance sheet errors.
Growing businesses needing help with reconciliation should contact Maximum Business Solutions today.
Mistake 3: missing deadlines
Here’s another really common mistake loads of small business owners make: they repeatedly miss deadlines. It doesn’t even matter how long an owner has been in business for, missing deadlines is an easy trap to fall in and can be hard to escape.
Missing deadlines doesn’t just look unprofessional, it also affects your bottom line and causes your business to suffer.
Managing upcoming deadlines and payments is the key to success when looking to avoid this predicament.
Mistake 4: failing to move to the cloud
Where do you store your financial information?
This is a really good question all small business owners should ask themselves regularly.
Do you keep the records on paper, in cabinet files? Or do you store it on your computer?
What would happen if an accident like a building fire or a computer virus destroyed all your financial records?
It’s hypothetical situations like these, cloud-based solutions just make sense. Anytime-anywhere access to a multitude of business and financial documents is the modern way (and if truth be told, is the only way to do things these days!)
Soar in the cloud with MYOB and Xero
MYOB and Xero are two of the world’s largest and most trusted cloud-based bookkeeping solutions. With clear interfaces, simple functionality, and automatic backup and protection, the cloud is the way to go.
Maximum Business Solutions is a Xero and MYOB partner and can help you get setup with either software.
Join us for part 2 next week
There’s still so many mistakes small business owners keep making that we needed to create a second part to this blog! Come back next week to visit part two, where we continue looking at the mistakes small business owners are making when it comes to business bookkeeping.
Edit: part 2 is now available! Click here to read it.