5 Accounting mistakes small business owners often make in their first year
If you have recently started your first business, there can be a lot to take into account. However, one element of your company you need to get right is your finances. Read on to discover some of the most common accounting errors that small business owners make in their first year so that you can avoid them.
Mixing personal and business expenditure
Operating via the one bank account may seem easier, but it is only going to cause you a lot of trouble in the long run. It makes it incredibly difficult to track your expenses. Plus, you could find yourself in trouble with HMRC if they decide to do a tax audit.
Trying to do everything themselves
Trying to keep everything in-house is admirable, but it can often be a big mistake. You will find that there are simply not enough hours in the day, and bookkeeping ends up being incomplete. Not only can accountants assist with this, but they can also provide financial advice that helps your business to make the most of any opportunities and grow at a quicker pace.
Forgetting to record small transactions
It does not matter how insignificant an expense seems, they all add up in the end. It is essential that your business has a record of all of its spending, no matter how big or small.
Not reconciling their books
This leads on from the earlier point regarding trying to do everything in-house. If you do not have time to reconcile your books, common accounting mistakes could go unnoticed for a very long time. This could mean that your business is in a completely different financial position than you expected.
Missing out on expenses
A lot of small business owners are paying more tax than necessary because they have not claimed for all of the expenses they are entitled to. This is where a qualified and experienced accountant really shows their worth.
If any of the mistakes that have been mentioned above sound familiar, it is important to put the steps in place to rectify them. Follow the advice that has been provided above to make sure that you get your finances back on track.
To discuss your small business needs get in touch with our Business Services Partner Robert:
Tel: 01825 763366
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