In the middle of a launch, accounting may take a back seat to day-to-day operations. Doing minimal bookkeeping may seem like a timesaver, but at some point the business owner will have to go back and account for all transactions while correcting mistakes. To save money and time, the business owner should hire an accountant from The A.C.T. Group and be on the lookout for these mistakes.
Mixing Business and Personal Funds
New bank accounts should be set up with the initial business investment. Having a dedicated business account ensures that all corporate transactions are separately accounted for. Moreover, check registers and banking statements can help business owners find small errors before they become unmanageable. Corporate cash flow can be tracked through checking accounts, and separate bank accounts make tax prep simpler at the end of the year.
Failing to Record Expenses and Revenue
Once a business account has been established, every transaction should be recorded. The business owner should decide how much detail is necessary for a good financial analysis, and follow up with the provision of that much data. In cases where customer data is required for invoicing, the business owner should select an accounting firm that can capture such information. By hiring an accountant, a business owner can save all the time that was once wasted on tracking small receipts.
In the earliest phases, businesses record few transactions. Then, accounting can be done by hand or on a simple spreadsheet. However, as a company evolves and transactions increase, manual accounting becomes too inefficient. Setting up an accounting system with how to grow a business during the startup phase can allow for backend growth.
Waiting Too Long to Hire Help
Although a business in its earliest phase may not need help with everyday accounting, a certified public accountant can offer expert advice. Many CPAs will gladly share tips and insights on current issues, and an accountant can help business owners avoid costly mistakes. Some business owners may not see the need for an accountant, but the advice and service provided by a CPA are well worth the expense.
To avoid early mistakes in Chicago Small Business Accounting, managers and owners should strive to build a money management system that's equipped for future growth. A small business-specific accounting system from The ACT Group can be tailored to the business' needs, and it's the easiest way to see continued accuracy in reporting.