Small business accounting entails much more than meticulously maintaining the books to pay taxes. When small business accounting is done the right way, it saves money, pinpoints wasteful spending, zeroes in on potential theft and also targets possible fraud. In short, it is a mistake to perform DIY (do it yourself) accounting, even if your small business is in its infancy.
Sensible Services in Hammond LA is here to sweat all the small stuff of your small business accounting challenges on your behalf so you don’t fall into a financial trap that leads to unnecessary taxation, fines and other penalties. Without further ado, let’s take a quick look at the top mistakes small businesses make in the context of accounting.
Mistake #1: Trying to do it all on Your Own Instead of Relying on the Proven Hammond LA Accounting Specialists
Even if you take pride in your number-crunching abilities, you should not attempt to handle the entirety of your small business’s accounting projects on your own. Square your focus on growing your business, outsource your accounting and bookkeeping projects to Sensible Services in Hammond LA and you will rest easy knowing the professionals are doing everything exactly right on your behalf. Let our accounting specialists balance your books and adhere to all the tax and accounting laws and you will be liberated to focus on your strengths.
Mistake #2: Paying Expenses Out-Of-Pocket
Do not fall into the trap of paying small business expenses out of your own pocket or encouraging your Hammond LA employees to use their own money for such expenses! Oftentimes, these expenses are overlooked and ultimately end up excluded from the accounting records. Furthermore, paying expenses out-of-pocket also creates the potential for your business to look that much more financially formidable than it really is.
Mistake #3: Failing to Save Receipts and Invoices
Every single receipt and invoice pertaining to your small business should be saved and copied for posterity’s sake. Fail to preserve this essential documentation and it will be that much more difficult for Sensible Service’s Hammond LA accounting specialists to perform truly accurate accounting. Receipts must be kept for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return, as there is always the potential for an audit. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction. The bottom line is receipts and invoices are essential for matching entries within accounting software or a register.
Mistake #4: Reporting Transfers as Income
Truly accurate financial statements are necessary to make well-informed decisions about your small business and its financial health. If transfers are reported as income, the accounting records will be inaccurate, creating the potential for you to make decisions that prove detrimental to your small business.
Mistake #5: Writing off a Large Purchase as an Immediate Expense
Do not make the mistake of writing off bulk purchases of something such as hundreds of reams of printer paper as an immediate expense. The purchase can be categorized as an office supply yet it should not be considered an immediate expense as it is a large purchase that has the potential to be replenished at a high frequency. When in doubt, lean on our Hammond LA accounting experts to help you determine exactly how each purchase relating to your small business should be categorized.
Schedule an Appointment With Sensible Services ABC LLC
Sensible Services ABC LLC is here to help your business in or near Hammond LA avoid the common accounting pitfalls as noted above and set the stage for your business to achieve its true potential. Reach out to us today at (985) 222-2088 or contact us online to schedule an appointment with our Hammond LA accounting, bookkeeping and business consulting professionals.