In ordinary life, sloppy dress can cost us nothing but a few sideways glances from better turned-out friends. But sloppy bookkeeping comes with a price tag, with lost revenues, penalties at tax time and frantic hours scrambling to correct problems.
Is it time for you to give your bookkeeping a makeover? See if you can recognize yourself in any of the following bookkeeping bad habits.
1. Papers, Papers Everywhere
Is your, or your bookkeeper’s, desk overflowing with papers – files and invoices waiting to be paid? When you open your filing cabinet, does it looks as if a bomb went off, with papers askew, discouraging use? The mess is a sign that you need to get your bookkeeping life in order. Perhaps it’s time to buy a scanner and get a virtual filing cabinet going.
2. Reports Are Ignored
All manner of reports can be generated from your company’s financial information. But they have exactly zero value if you never review them, with a goal of taking some positive action. Set aside regular dates in your electronic calendar to review certain reports, saving, for example, the end of the month to look at income statements.
3. Invoices Are Sent into the Ether
It is essential that you keep track of your invoices. Not every customer faithfully pays up on time. Losing track of invoices can mean lost income. You should set up a system that automatically notifies you when invoices are past due, so you can take appropriate corrective action.
4. Failing to Regularly Set Aside Payroll Taxes
Yes, not doing this can ensure that someone from IRS is your new, best . . . well, friend isn’t the right word. To save yourself headaches and expense, stay atop of your payroll management, even if it means getting a professional to look after this complicated job.
5. Irregular Updates of Your Books
Updating your books can be a time-consuming pain that a lot of small business owners would like to avoid. But you shouldn’t. If you don’t regularly update your books, you won’t have current numbers and may make bad business decisions based on the old information.
6. Overlooking Small Transactions
You might be tempted not to record the $20 taken from petty cash one day to buy office coffee, or $10 taken the next for an emergency paper resupply of the copier, but these small expenses can add up and throw your books out of whack. To have a clear financial picture of your business, you need to know every cent that comes and goes.
As tax season approaches, it’s more important than ever to have your bookkeeping in order, with no mistakes or issues that are going to raise a flag with the IRS. Contact Shockley Bookkeeping & Tax Services today to get a FREE quote and consultation, to see how we can help you.
Servicing clients in Broken Arrow and Tulsa, Shockley Bookkeeping provides each client with accurate, efficient and quality information to make sure their books are ready at year-end to submit to their accountants.