15 Common Bookkeeping Mistakes Made by Small Businesses

Auditing

Bookkeeping is more than simply recording financial transactions in a ledger. Bookkeeping can make or break the success of your company! The U.S. Small Business Administration reports approximately half of all new businesses fail within the first five years, primarily because of poor financial management, internal recordkeeping and bookkeeping mistakes.  Here is a list of 15 common bookkeeping mistakes made by most small business owners.

  1. Unfamiliarity with standard accounting principles
  2. Failure to identify all reimbursable expenses
  3. Inconsistent or incorrect account reconciliation
  4. No back-up of electronic and hard copy files
  5. Inaccurate collection and reporting of sales tax
  6. Improper classification of income and expenses
  7. Unapplied or misappropriated credits
  8. Unable to distinguish between profits and cash flow
  9. No formal system for monitoring petty cash
  10. Comingling of personal and business finances
  11. Misclassification of employees and independent contractors
  12. Recording inventory sales before product is received by customer
  13. Mishandling of credit card entries
  14. Making simple data entry errors, such as transposing number or assigning incorrect codes

15. Not Trusting the Experts

One of the biggest bookkeeping mistakes made by small business owners is not seeking advice from a reputable accounting firm. McNair & Associates cares about the success of your business and is here to help! We offer comprehensive, cost-effective bookkeeping services and will train your in-house staff on how to use QuickBooks ™.