21 Aug Bookkeeping Problems Faced By Entrepreneurs
Being undisciplined in updating your bookkeeping needs usually bring up issues that could have been avoided. Let’s look at some bookkeeping problems encountered by entrepreneurs.
Getting your personal and business expenditures all mixed up
So, you’re about to enjoy a hot beverage before boarding your flight back to headquarters. But wait, are you going to consider this as a business expense or something for personal consumption? It may seem like an insignificant amount, but over time these small numbers eventually add up. You have to remain vigilant because the consequences could end up losing money or suffering the ire of the IRS. Avoid the confusion and make sure to charge the correct business or personal account accordingly.
Misplacing vital documentation by failing to keep your receipts
You were able to purchase a cup of frappe, but you inadvertently crumpled the receipt and chucked it somewhere. Not only you are littering but you’ve lost evidence of such an expense. Even if the coffee gets listed on your credit card statement or mobile app, the hard copy of the receipt is still a vital document.
With cameras conveniently part of your smartphone features, take a quick photo of your receipt before you misplace it. That preserves the document and digital copies can be easily cataloged and retrieved later on.
Failing to backup important files
Losing your valuable data can feel like the earth is about to swallow you whole. Don’t be a victim of a corrupted hard drive by getting into the very good habit of backing up your files. Whatever important physical documents you have on hand should be scanned and stored properly. There are also cloud services that can provide redundancies for your data storage. You also have the advantage of being able to access this information on demand.
Not being able to reconcile your bank records
You have your internal records and, more than likely, you make use of the bank to monitor your transactions. Comparing your check disbursements to the records of your bank passbook means you are trying to do a bank reconciliation. This prevents discrepancies from coming up due to non-clearance of deposits, pending transfers, and the like.
But errors, bounced checks, embezzlement attempts and fraud can also cause such discrepancies. Failing to perform a bank reconciliation may increase your risk of letting these issues continue and if ignored, might also risk the legitimacy of your enterprise. Make use of available software that can consistently perform this task.
Forgetting to follow a strict schedule
Submit your receipts before the month ends. Pay your taxes according to the table provided. Organize your accounts based on a daily, weekly, monthly, quarterly, and yearly demands. Ignoring this translates into funds unnecessarily spent on fines and other penalties that could have been prevented by sticking to a schedule.
With such bookkeeping challenges, it would be advisable to outsource your bookkeeping needs so that your business stays on track. They have the manpower and the software to sort out your expenses and calendar out what needs to be paid and when you need to pay it. In the long run, retaining such outsourced bookkeeping services saves you from unnecessary stress.