Common Bookkeeping Mistakes And How To Avoid Them

Whether you're a small business owner or just trying to keep your personal finances in check, bookkeeping can sometimes feel like a wild ride.

Don’t worry - though. As scary as it might seem, there are few mistakes you can make that accountants haven’t seen before, and we can help you avoid them…or fix it when it happens.

Let’s dive in.

1. Not Keeping Receipts

Oops Moment: Tossing receipts in the trash like old confetti.

Fix It: Get organized! Use apps to scan and store receipts digitally. Your future self will thank you. Plus, the IRS generally requires you to keep records of those. 

Perhaps don’t try to make them mad, they don’t like it.

2. Forgetting to Reconcile Accounts

Oops Moment: Your bank statement and your records look like they're from different planets.

Fix It: Reconcile monthly. Compare your records with bank statements regularly to catch any discrepancies.

3. Ignoring Small Transactions

Oops Moment: That coffee run expense you thought was "too small to matter" adds up.

Fix It: Record everything. Even the smallest transactions count towards accurate bookkeeping.

4. Not Backing Up Data

Oops Moment: Computer crash or another similar natural disaster wipes out months or even years of financial data.

Fix It: Backup religiously. Use cloud storage or external drives to keep your data safe and sound.

5. Misclassifying Expenses

Oops Moment: Putting a client lunch under office supplies.

Fix It: Set up a great Chart of Accounts that makes sense. Take some time to understand your expense categories and stick to them. (This blog coming soon to a website near you!)

6. Failing to Follow Up on Invoices

Oops Moment: Forgotten invoices = missed payments.

Fix It: Set reminders. Use accounting software that nudges you when invoices are due.

7. Procrastinating on Bookkeeping

Oops Moment: Leaving months of bookkeeping until a week before the deadline.

Fix It: Schedule regular sessions. Break it down into manageable weekly or bi-weekly tasks.

8. Doing It All Yourself

Oops Moment: Burnout from trying to be a bookkeeper, business owner, marketing genius.

Fix It: Get some help - hire a professional bookkeeping service or use reliable bookkeeping software to share the load. (Hint: we’re something of a professional bookkeeping service, ourselves.)

Bookkeeping certainly doesn’t have to be a nightmare. If you know what to watch out for and common pitfalls to avoid - and what to do when the inevitable happens, we’re all human - your books can be a breeze.