When starting a new business, owners are excited, anxious, stressed and eager all at the same time. There are a million items to think about. Is bookkeeping one of them? It certainly needs to be. At Raleigh Bookkeeping, we have worked with countless new business owners, and in the process, we have seen them make avoidable mistakes. Those mistakes can be costly.
With that in mind, here is a list of common first-timer mistakes to avoid for new business owners:
1. Procrastinating: As we said, with everything there is to think about regarding a new business, owners can sometimes procrastinate or put specific key bookkeeping responsibilities on the backburner. That can lead to missed tax deadlines or make it difficult to reconcile the books later.
2. Not keeping receipts: In the chaos of everything around them, new owners may forget to keep certain receipts that they will need later in case of an audit or other review. Don’t let that happen.
3. Mixing personal and business spending: If you are unsure about where an expense goes, ask us. We’ll let you know if it is a business expense or not.
4. Neglecting taxes: All businesses must pay sales and payroll taxes by certain deadlines to stay compliant. Use us at Raleigh Bookkeeping to make sure you stay on top of it.
5. Misclassifying employees and contractors: Speaking of payroll, when business owners use contractors, consultants and freelancers, it can be challenging to determine how to pay the proper taxes.
6. Not reconciling: Reconciling your books with bank statements is a crucial requirement. Not only does it help determine financial health, but it determines how much cash is on hand and allows you to discover bank errors quickly.
7. Not monitoring petty cash: If a business uses petty cash for small purchases, it must have clear policies in place to ensure accountability and avoid theft and abuse. All purchases must have a receipt and clear documentation kept in a record book.
At Raleigh Bookkeeping, we are here to help all small business owners avoid these common mistakes. Contact us today, and we will work with you to keep your books in line.