Accounting seems simple, but it requires precision as the slightest mistake could land you in trouble. Not only can it cause a problem in your books, but also result in financial loss. This is why it is imperative that you avoid common accounting mistakes, which can cause you trouble. For this purpose, you have to find an auditing firm to draw up your accounts. These auditing firms are well aware of common accounting mistakes and know how to avoid them.
Bank Account Balancing
One of the most common accounting mistakes businesses make is assuming their books are in perfect order because they use software for maintaining their accounts. Using software is an effective way of keeping your accounts in order, but since the entries have to be done manually, there is the risk of human error. Therefore, assuming your books are perfect simply because you use accounting software is a mistake. You should reconcile your business accounts with the bank statements periodically to ensure your books are balanced. You may have an in-house accountant do this or find an auditing firm to take care of the job for you.
Invoices for Sales
Almost every business uses a credit line. When a sale is made customers may not pay up immediately and are issued invoices for the amount they owe. They may require one or two months to make the payment. Oftentimes, businesses pay for more than one invoice at a time.
At times, customers delay the payments. This is where you need to be vigilant. If you did not know about a customer making a late payment, there is a good chance the customer can get away with not paying at all. This is why you need to have a foolproof invoice system. If a customer delays a payment, you need to contact them and see why the payment was delayed. Even if they have a genuine reason, you should still inquire.
Accounting for cash in hand is tricky and is the cause of one of the most common accounting mistakes. This is because excess cash can be given away on some occasions. Moreover, mistakes can be made while counting cash, and cash is also susceptible to theft. If you deal in cash, you should make sure the cash tills are balanced regularly to avoid such issues.
If you have the slightest problems in managing your business accounts, you should find an auditing firm that can do the job for you. This way, you can avoid the common accounting mistakes that can cause trouble.