You have a great business idea, and you are ready to leap into self-employment. But before you start taking orders and filling your store with inventory, it is important that you set up an accounting system for your company.
This will help ensure that all of the numbers add up correctly at the end of each month. It also helps to prevent errors from happening in the first place!
In this blog post, we will discuss few common bookkeeping mistakes, how they happen, and how to avoid them so that your company can be successful!
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Description: Not keeping track of the date and time when transactions happen. When you are trying to make sure that all your numbers add up at the end of a month, it is important to know what dates each transaction happened!
This will help prevent errors from happening in the first place.
How To Avoid It:
Keep accurate accounting system logs so that every transaction has an associated date and time stamp; set reminders throughout the day/week, reminding yourself which expenses need to be entered into your accounting system.
Description: Not keeping track of the cash and bank account balances.
It is good to know where you stand in terms of income, expenses, and how much money you have on hand so that you can easily make financial decisions without having to worry about any surprises at the end of a month.
This also helps prevent errors because it will keep an accurate record of all deposits and withdrawals made for each day/week/.
How To Avoid It:
Keep detailed records (including receipts!) detailing every transaction as well as noting the date and time of each transaction; use a spreadsheet to track your expenses and income so that you can easily see how much money is coming in and out of your account.