Avoid 7 Common Pitfalls in Bookkeeping

Ready for Q4? Automated Bookkeeping in Sioux Falls, SD

Bookkeeping is often seen as an unpleasant housekeeping task in the business world—an equivalent to doing laundry that’s become piled up. As you’re gearing up for Q4, finding time—and patience—for bookkeeping can seem impossible. This often monotonous process can be a real challenge, especially when you’re only doing it because there’s no one else to do it. 

Don’t worry. We’re here to help.

Here is a list of 7 common pitfalls we see when analyzing a business’s financials and how to avoid them by outsourcing your bookkeeping.

1. Putting It Off

The worst thing you can do when it comes to bookkeeping is procrastinate. We understand—it’s difficult and tedious, but allowing receipts to just sit around can lead to some major problems. Your business could miss tax deadlines, leading to a minimum 5% fee on the unpaid taxes. 

Additionally, you may forget what various expenses were for or by what method you paid for them. This can lead to major problems you may not have time to fix, such as being unable to reconcile your bank accounts. Finally, you could be making business decisions based on outdated data. Putting off bookkeeping is basically the equivalent of allowing the laundry basket to overflow—it gets very messy, fast.

2. Bad Record Keeping

“Everything not saved will be lost.” Though you may frequently see this message pop up on your nephew’s game console, it is quite accurate in the bookkeeping world. Save every record of purchase (especially receipts), no matter how small, in a secure location. If your business is ever audited, this can save you thousands.

3. Not Backing Up Your Financials

Make use of the cloud! Traditional, physical computers are not 100% reliable, but by taking advantage of today’s cloud technology, you get reliable backups with a level of security that stretches up to the sky!

4. Not Knowing the Lingo

Just like any other practice, bookkeeping has its own specialized terms. Make sure you are familiar with the following:

• Accounts Payable – the amount of money your company owes creditors
• Accounts Receivable – the amount owed to a business after a service has been done
• Asset – anything your company owns that has value
• Cash Flow – the revenue or expense expected due to service your business provides or receives
• Expense – any cost your business has, something your business spends money on
• Revenue – the money your business is paid for providing a service

5. Mixing Business and Personal Accounts

Just don’t do it! Mixing business and personal accounts is like throwing a red shirt into the wash with your white clothes—it never ends well. Use business credit cards and bank accounts for business exclusively! Bookkeeping is made so much easier if you adhere to this.

6. Not using technology

Automated bookkeeping is saving folks money all over the world. Join them! And with software like Quickbooks, you can bring credit card records, expense reports, invoices, and more together in an easy to read way. If you don’t know how to use Quickbooks, sign up for one of our Quickbooks training classes.

7. Overwhelming Yourself

One of the biggest pitfalls you can encounter in bookkeeping (as with any area of your life) is ploughing forward without proper knowledge, preparation, or rest! There’s nothing wrong with asking for help, and that’s what we’re here for! Sometimes, the best thing to do is to outsource your bookkeeping in Sioux Falls, SD to the experts who deal with the tedium of bookkeeping all day long.

Let Us Handle It – Automated Bookkeeping Sioux Falls SD

Relax, and leave your laundry list to us. You can avoid these bookkeeping pitfalls entirely when you put your trust in a reputable professional in Q4. Get in touch with us today at (605) 231-4906 to find out more about how our bookkeeping services can save you time, money, and frustration!