Are you concerned that you may be indulging in any unhealthy bookkeeping mistakes? You might have already noticed some red flags, such as overflowing, disorganized filing cabinets.
Bad bookkeeping habits are detrimental to your business on multiple levels. For starters, they restrict you from maximizing your revenue. Second, they impede you from working efficiently in order to make the most of your time. Finally, they are harming your perception of your company.
Without a doubt, inefficient bookkeeping practices can make your business’s financial planning unproductive. To avoid damaging your accounting efforts, check out our list of the six worst bookkeeping habits.
Worst Bookkeeping Habits You Should Avoid
These are some of the most common bad bookkeeping habits you need to drop.
Unorganized Filing System
One of the most typical bookkeeping bad habits is a box file bulging at the seams with paperwork or a desk strewn with critical documents that have been abandoned for months. Consider switching to paperless accounting software to make organization easier and less stressful.
Missing Your Deadlines and Due Dates
It’s fantastic to be your own boss; you can clock out at 4 p.m. on Fridays and take extended lunch breaks whenever you like. However, when it comes to tax returns and bookkeeping, the same advantages do not apply.
If you are also lax in this area, you may be placing your company at danger of large fines or penalties. Ensure that you’re meeting the deadlines that you and your accountant have established.
Not Keeping Up With Invoices
You could be thinking right now, “Well, my file system is in wonderful shape, and I never miss my tax return dates,” but bookkeeping doesn’t end with organization and timely filings. Your accounting may be in order, but if you’re not tracking down outstanding payments and ensuring bills are paid within the agreed-upon terms, your cash flow and bottom line will suffer.
Seeking Assistance From A Non-Expert
As a business owner or sole proprietor, you are hardwired to look for ways to decrease costs and save money. However, there are some things in life that are worth investing a little extra money on, and one of them is a high-quality accountant. If you’ve opted to cut corners by hiring someone less experienced or putting up with poor service in order to save money, you may be doing more harm than you realize.
How can you gauge the health of your business if you aren’t analyzing financial records on a regular basis? Keeping track of what’s going on with your books regularly allows you to create goals, see the big picture, and progress toward success.
Skipping Important Processes
We’ve all heard that having clear and documented procedures in place in your business can help things operate more smoothly. So, why do few people establish good bookkeeping systems for themselves and their teams to follow?
It’s difficult to have a documented strategy in place for getting on top of things if you wait all year to organize your business books. Your strategy could be to pull multiple all-nighters until all your tasks are completed, then breathe a sigh of relief, wait till next year, and repeat. Even if this implies that your bookkeeping is officially done, there is clearly a better method to go about it.
Drop Bad Bookkeeping Habits for A More Streamlined Accounting
Bookkeeping may not be as exciting as the other business tasks you get to do on a daily basis. However, as unpleasant as bookkeeping may be, it is necessary for maintaining a successful financial planning practice. At the end of the day, you should understand your numbers.
For a more effective bookkeeping system, try Today CFO’s bookkeeping and accounting services.