There is never enough time in the day to accomplish everything you want to. Therefore, why would you spend 70 hours a week doing something that is not growing your business? Not everyone can do the job effectively if they take on too large of a load. It is crucial that you avoid common bookkeeping mistakes to prevent compliance issues and data errors. Below, we explore three of the most common bookkeeping mistakes that all businesses should steer clear of.
3 Common Bookkeeping Mistakes
Mistake #1: Not Exploring Your Bookkeeping Options
Businesses have multiple options in fulfilling their bookkeeping needs. However, most business owners quickly select a bookkeeping method without exploring which option best suits their business needs and capabilities. As a result, they onboard an in-house bookkeeper and trust this new hire to complete tasks efficiently.
Although this may seem like a smart strategy, your business is essentially throwing all your eggs in one basket, a risky approach since the new hire may not have a proper background in bookkeeping. There may be an instance where your bookkeeper makes an error, but you have no one else to validate financials and make proper corrections.
Alternatively, another choice is for the owner to do the bookkeeping on their own time. This is a major challenge for those trying to grow their business. Do they have the experience to handle it? Are they leaving money on the table? Who will verify that all codifications are correct?
Mistake #2: Relying on Manual Processes for Bookkeeping
Both technology and automation have drastically transformed the amount of time it can take for a business to grow. When a business opts to do their books manually, they neglect available resources that efficiently streamline the bookkeeping process and save valuable time.
To take the stress out of your business, leverage valuable software wherever applicable. For instance, your business regularly receives various bills and invoices to record and pay. However, in place of entering them one at a time, you could save hours by using a software application to import all necessary documents.
Do you want to get the most out of your time? Use an outsourced bookkeeping company!
Outsourcing your bookkeeping eliminates data entry and time spent completing these tedious but important tasks.
Our team at Remote Quality Bookkeeping utilizes specifically tailored software to compliment how we operate, saving your business both time and money. Imagine having more time to focus on growing your business by delegating the following tasks:
- OCR for quick transcript and search
- Import automation
- Delivery management
- Data analysis
- Protecting client-sensitive information with credential and archival management
Anyone can enter bank transactions into an accounting software; however, it takes a knowledgeable mind to know where to claim that deduction, how to mitigate taxes, and not spark an audit.
Most people do not know when to capitalize a purchase or when to expense it, yet the law demands they should know. However, an outsourced bookkeeping team would have the proper background and experience to navigate it properly.
Mistake #3: Being in the Dark on Your Current Financial Status
When managing tight margins, a looming payroll, the incessant stream of bills, customer payments to apply and deposit, and receivables to call on, owners have better things to do then worry about if a check they just wrote will clear.
Cashflow is the engine that makes any company run. Without it, a business will not survive. That is why it is critical to know where the business stands financially at any given moment.
To have a successful business, you must develop an approach that provides a clear view of the true operating cash requirements and indicates when the high and low cash balances will show in advance. This is advanced knowledge that can be a critical tool when handling cash difficulties.
Therefore, establish an effective and reliable method to estimate the timeline of customer payments and the distribution of cash resources for bills and payroll. Map out scheduled cash disbursements and match them to the timing in which the receipts are expected. This information should be regularly updated to keep the most current financial status and trajectory for the future.
Avoid Common Bookkeeping Mistakes with MyRQB
The key to business success is to focus on what you do best and delegate the rest. By outsourcing your bookkeeping and accounting tasks, your business can receive important and accurate financial reports in a timely manner.
We are the associates you have been looking for. At Remote Quality Bookkeeping, we are dedicated to helping you obtain the necessary information to make effective business and revenue decisions, especially during the COVID-19 outbreak.
Our team of specialists provides cost-effective, efficient, and accurate bookkeeping services for small businesses and franchisees throughout the United States. At MyRQB, we take care of all the back-end work and provide you with instant access to financial statements so you can always know where your business stands.
We partner with countless industries, servicing fourteen Franchise Brands including UPS Stores, US Lawns, Shelf Genie, Elements Massage, and Edible Arrangements to name a few.
Are you ready to begin implementing your outsourced bookkeeping strategies today? Contact us today at (866) 567-4258 or via our online contact form with any questions or to learn more about our services!