Accounting Mistakes That Can Put Your Business at Risk

Posted 01 Sep 15

Accounting mistakes are easy to make, but they can have an enormous impact on your business, no matter how small or big it is.

In this article we will analyse the most common accounting mistakes a lot of small business owners make and provide advice on how to avoid making them.

1. Not Keeping Expense Receipts

Failing to save copies of business expense receipts is the most common mistake many business owners make. Not keeping a proof of the expense you want to claim during the self-assessment period can result in incorrectly reported tax and a high tax bill and sometimes, a penalty fine.

It is crucial that you keep all receipts of every purchase you make to benefit your business. Make sure that you write down the date and the details of the purchase, so in case of investigation you can easily recall it. The process can seem time-consuming and simply, boring, but if make it into a habit, it will save you from unnecessary stress in the future.

The safest and the simplest way to avoid this error is by hiring a qualified and professional accountant, who will keep all your business receipts and records up-to-date and ready for investigation at any time.

At Tawanda Accountants we ensure that our clients never worry about the overwhelming and stressful amount of paperwork which can take up the valuable time you could otherwise spend developing your business.

Not only will we take care of your taxes for you, but we will also help you understand how you can benefit the most out of your situation and develop a financial strategy that best suits your business. If you want to know how you can boost your company’s productivity, contact our experts and we will be happy to present you with our best offer.

2. Mixing business and personal finances

A lot of company owners make a mistake of using the same bank account and record keeping methods for both their business and personal finances.

Unfortunately, this is another error which can lead to long term consequences. When you start a business, you should open a new bank account, which needs to be always kept separate from your personal account. If you pay for business expenses from your own pocket, remember to keep all the receipts for tax deductions.

If you want to know what bank account suits your business requirements, contact our team and we will be help you pick the best option for you.

3. Not setting a clear budget for your projects

Failing to plan a budget for even the smallest project can be a costly mistake to make. Many projects do not succeed simply because they turn out to cost a company more money than it has been predicted.

Whenever you decide to start a new project, such as marketing campaign or improving your products and services; make sure to plan each step of it in as much detail as possible. Keep a track of all the finances and cuts throughout the duration of the project.

Learning how to set the budget clearly is one of the most important skill of every business owner.

About Us

As a leading UK accounting firm and expert business consultancy, Tawanda Accountants carry out scrupulous accounting and provide payroll services and procedures for small businesses, individuals and business start ups.