You know those mathematics lessons you had at school – the ones you swore you would never use? Well, now that you’re a business owner they are about to come in handy, as are those IT lessons on spreadsheets. When it comes to running a business, one of the most important elements is accounting, and ensuring that you get your accounting right.
It’s not just about ensuring that your business runs smoothly, it’s also about making sure that you stay within the law. You see, as a business owner, it’s your responsibility to make sure that your accounts are up to date and that your taxes are paid on time. Because if you fail to do this, you could end up with a fine or worse, in court.
So, when it comes to your accounts, you don’t want to make any mistakes. With that in mind, below we have outlined some of the most common mistakes that startups make, along with tips on how to avoid making them.
Getting behind with your accounting
Time may not be on your side, there may always be something else that needs doing, but that doesn’t mean that you should neglect your accounts. You need to schedule time into each week for your business accounting, as otherwise, you will end up getting behind with them. If you end up behind with your accounts, you will get into a rut and will struggle to catch up. So schedule an hour or so a week into your diary for your accounting, and ensure that you use it wisely.
Failing to understand accounting software
Accounting software and solutions, such as Sage accounting solutions, for instance, can be incredibly beneficial for business owners. It can make keeping on top of your incomings and outgoings much quicker and easier, and can really streamline your accounting. However, if you don’t understand how your chosen software works, it can make running your business even harder. If you don’t know how your accounting software works, you could end up making a mistake. So it’s important that if you are going to use accounting software to make managing your money easier, that you understand how it works and are able to use it effectively. There are plenty of training resources that you can access for free online, so make sure to take advantage of them.
Throwing away receipts
A mistake that a lot of new business owners make is not keeping receipts. If you want to ensure that you’re not paying too much tax and that you’re not overspending, you need to keep hold of your receipts. If you don’t want to keep paper receipts, digitize them instead. When it comes to tax season, you will be glad to have easy access to all of your receipts, as it will make things much simpler.
You learned to do mathematics at school for a reason, and this was it. The chances are that when you were learning maths, you were always taught not to rush. Otherwise, you could end up making a mistake, right? Well, the same applies when it comes to doing your accounts, take your time with calculations and always double check the answer. After all, if you make a mistake, it could come back to bite you once the taxman gets his hands on your accounts. So it’s always best to double check all calculations, just in case.
There you have it, a guide to the most common mistakes that startups make when doing their accounts, along with tips and advice for how to avoid making them.