{"id":7729,"date":"2023-01-03T08:00:00","date_gmt":"2023-01-02T22:00:00","guid":{"rendered":"https:\/\/profitwise.com.au\/?p=7729"},"modified":"2022-12-07T14:29:33","modified_gmt":"2022-12-07T04:29:33","slug":"5-common-bookkeeping-pitfalls-and-how-to-avoid-them","status":"publish","type":"post","link":"https:\/\/profitwise.com.au\/5-common-bookkeeping-pitfalls-and-how-to-avoid-them\/","title":{"rendered":"5 Common Bookkeeping Pitfalls \u2014 and How to Avoid Them"},"content":{"rendered":"

Although most entrepreneurs recognize the importance of careful financial management, few want to spend their time dealing with numbers. Unfortunately, not keeping a close eye on your income and expenses can be very costly for a business.<\/p>\n

Here are five of the most common bookkeeping pitfalls, and some simple tips for getting back on track.<\/p>\n

Mixing Business and Personal<\/h3>\n

All too often, entrepreneurs adopt a \u201cbuy now, sort later\u201d approach to expenses, using the same credit card for personal and professional purchases. At the end of the month, they\u2019re left poring over statements, trying to sort things out. Mixing business and personal expenses costs extra hours of bookkeeping each month, and muddies your overall financial picture.<\/p>\n

Avoid this pitfall by using a separate credit card and bank account for business, and being disciplined about separating expenditures.<\/p>\n

Neglecting to Track Reimbursable Expenses<\/h3>\n

Receipt-tracking is a necessary part of business ownership. You need to keep track of receipts to understand spending patterns and effectively manage your company\u2019s finances. And if you want to claim deductions at tax time, you\u2019ll need to submit receipts along with your tax return.<\/p>\n

But far too many business owners take a haphazard approach to collecting and organizing receipts\u2014especially while on-the-go, where a whopping 50% of their expenses<\/a> are generated. Get the deductions you deserve and simplify tax prep by using an expense-tracking app.\u00a0 Options like Expensify and BizXpenseTracker<\/a> can record mileage, billable hours, and other expenditures, as well as generate expense reports. Plus, many of these apps sync seamlessly with your business bank account and accounting software.<\/p>\n

Not taking Advantage of Technology<\/h3>\n

Are you still relying on manual accounting methods? While basic spreadsheet tools can get the job done, they leave the door wide open for human error. Mortgage loan giant, Fannie Mae, once uncovered a $1.1 billion error<\/a> on their Excel spreadsheet, citing \u201chonest mistake\u201d as the cause.<\/p>\n

What\u2019s more, manual methods simply can\u2019t match the technological benefits offered by software like QuickBooks or Xero. These systems track invoicing, link with your credit card and business account, organize expenses, and generate insightful financial reports.<\/p>\n

Not keeping Accounts Up to Date<\/h3>\n

Let\u2019s be frank. Most business owners don\u2019t look forward to that weekly appointment with \u201cthe books.\u201d\u00a0 In fact, many entrepreneurs cite bookkeeping as their most dreaded responsibility and will find a host of reasons to avoid it.<\/p>\n

Doing it All Yourself<\/h3>\n

It is completely understandable for budget-conscious entrepreneurs to try to cut costs by handling bookkeeping on their own. However, taking advantage of professional help\u2014even on a part time basis\u2014can generate substantial savings of time and money over the long term.<\/p>\n

Time to get savvy about bookkeeping. The biggest pay off? Saving time with these bookkeeping tips will allow you to invest your talents and energy where they will be most profitable.<\/p>\n","protected":false},"excerpt":{"rendered":"

Although most entrepreneurs recognize the importance of careful financial management, few want to spend their time dealing with numbers. Unfortunately, not keeping a close eye on your income and expenses can be very costly for a business. Here are five of the most common bookkeeping pitfalls, and some simple tips for getting back on track. … Continued<\/a><\/p>\n","protected":false},"author":11,"featured_media":7493,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[78,1,240],"tags":[252,251,367,366,135,365],"jetpack_publicize_connections":[],"acf":[],"yoast_head":"\n5 Common Bookkeeping Pitfalls \u2014 and How to Avoid Them - Profitwise Accountants<\/title>\n<meta name=\"description\" content=\"Although most entrepreneurs recognize the importance of careful financial management, few want to spend their time dealing with numbers. 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