by Aadila Carrim
It might seem counterintuitive to pay an external party to do something you can “easily” do yourself and save some of the seemingly never-ending costs that seem to plague new start-ups.
As a small business owner, you are usually the sole strategist and the driving force behind your business’ growth – spending time on tasks like managing your record keeping, albeit necessary, steers you away from your ultimate goal which is driving your business to new heights.
Here is a list of the most common things to avoid when doing your own bookkeeping:
1.Trying to keep your records in a spreadsheet type format until tax time when you have to hand over your files to your accountant to consolidate. Don’t underestimate the value of using a good accounting software package. Your data will always be secure and there is a reduction of manual errors since a large part of the process is automated.
2.Always putting off your book keeping because there are more important business tasks to attend to. This can result in errors or omissions being made or documents being misplaced due to the length of time between a transaction occurring and it actually being reflected in your company’s accounting records.
3. Making decisions based on information that is out of date. In order to effectively manage your business, you need to have timely, relevant information on hand. For example, knowing how much you owe your creditors at a point in time and how much is payable in the next week requires all invoices to be entered accurately and on time. Not having such information readily available could negatively impact important cash flow decisions that you will most certainly have to make on a day to day basis.
4. Failing to track receipts for minor purchases. However, minor your expense is you may need it to claim a tax deduction. Often expenses have both business and private use portions, the business portion needs to be calculated accurately.
5.Failing to back up your data. Imagine losing all the records you have kept for the year!
**Aadila Carrim is a chartered accountant with more than 15 years of experience in audit, financial management and has experience running her own small business.
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