As a business owner, you only want what’s best for your company. You do everything that you can to ensure that you are going to be in the playing field for as long as possible. Perhaps, you want it to survive even well beyond your working years by allowing your family to manage it.
Anyway, as endearing as it sounds, there are some common accounting pitfalls that small business owners make. I will highlight them in this article so that you can do your best to avoid them.
Also, to help you with your accounting needs, you might want to think about outsourced accounting services in Malaysia as well.
Not Monitoring Your Accounts Receivable
In every transaction your company makes, there is a corresponding entry in the balance sheets to reflect them as accurately as possible.
You might have been busy doing a lot of your other business operations that you neglect your company’s receivables. These are entries that reflect the money that you should be paid for.
For instance, a customer might want to get your product as an installment, then that would reflect as part of your accounts receivable in the balance sheet.
Keep track of this so that you will not run into problems, especially when it comes to your tax obligations.
Lost Receipts or Disorganized Expense Records
You are required to file your business taxes come April and you have to accurately put the necessary data on the tax forms so that you will not run into trouble.
The problem is that the issue of lost receipts is real and that they are more common than you think. Misplaced or lost expense receipts are quite common and the transaction that is recorded in their might reflect the actual value of what you’re supposed to be getting.
If you so happen to lose these receipts and you forgot the amount that was stipulated on it, then that would mean that you could be in serious trouble come tax time.
To help you get by, you could designate only one credit card and one debit card for all of your company’s expenses. On top of that, use a mobile app that will help you record all of your transactions without any hiccups.
Forgetting Cash Expenses
A lot of your customers (and in some instances, you) use either a credit or debit card to make purchases these days. However, there are also others that are still old-fashioned that would use cash over their card counterparts.
In most cases, business owners tend to overlook their cash expenses and any unrecorded entries would mean that you could overstate your income which will ultimately result in too much money paid in taxes.
Rectifying this issue is easy, though, as you can just employ an accounting system that will help track your company’s cash expenditures.
Not Getting Professional Services
If you do not know the proper accounting basics and principles, it is best that you just hire a certified accountant to do all of your business financial and tax needs.