The five biggest bookkeeping errors made by small businesses

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When it comes to bookkeeping, many business owners find it to be a time-consuming task that often falls down their list of priorities over time. Nevertheless, bookkeeping plays a critical part in the success of your business; a task that, when rushed, will sadly lead to mistakes.

When taking on bookkeeping on behalf of our clients, previous mistakes become very apparent. The team here at Ellis & Co. have compiled some of the top mistakes that small businesses make when it comes to their bookkeeping, take a look below…

Not utilising the right software

Bookkeeping software has come a very long way in recent years. Not only will it make the process much more straight forward but it will also provide a real-time, clear view of your business’ cash flow (when used correctly) that will prove invaluable. There are plenty of reputable software options out there, speak to your accountant to ensure you choose the best option for your business’ requirements.

Not reconciling books with bank statements

One of the most effective ways to spot bookkeeping errors is to regularly ensure your books marry up with your bank statements. We recommend you do this monthly at a minimum, as this will ensure any errors can be rectified as quickly as possible before causing issues. Software will play a key part in this, with the majority now allowing you to integrate your online banking.

Improper record keeping

You should account for and keep records of all expenses for your small business, no matter how small you deem them to be. Doing this will not only ensure you are accurately claiming expenses, but it will also provide you with a comprehensive view of your accounts, thereby allowing you to effectively carry out future planning for your business.

Not backing up your data

We can’t stress the importance of backing up your files and records regularly. When your records are on paper, you should also scan them and save them on your cloud to ensure you have a backup in case of disaster (e.g. fire, flooding, etc.), and can get back up and running as fast as possible.

Taking on all responsibilities yourself

If you’re wanting to ensure accurate and efficient bookkeeping your accountant is the best person or team for the job, to provide invaluable advice and guidance. In gaining their support, you will free yourself up to focus on your core business, confident in the knowledge that this vital function is taken care of by the experts.

Are you looking for support with your bookkeeping? Speak to Anna Rowson-Smith at Ellis & Co. today to find out more about our service. Please email annarowson-smith@ellis-uk.com.