Owning your own small business can be one of the most exciting and terrifying things you’ll ever do. Errors in bookkeeping are widespread and can do a number on cash flow, tax planning, and even growth prospects. It’s helpful to know what not to do, and it’s much less stressful.
Mixing Personal and Business Finances
One of the most common errors is co-mingling personal and business funds. It’s confusing the same bank account for groceries with client payments. It’s a lot harder to track your expenses and generate accurate reports. Never combine personal and business accounts!
Poor Record Keeping
Receipts and invoices quickly multiply. Without those dollars being saved or logged, small businesses lose track of where money goes. Lost records can also lead to problems at tax time. An easy-to-use filing system or digital device will keep everything in order.
Ignoring Cash Flow
It’s easy to think only about sales while forgetting your timing. A company can be profitable on paper but still find itself out of cash if it doesn’t get paid for a while. By watching cash flow carefully, you avoid surprises. This is where that expert guidance comes in, for instance, from a fractional CFO. And they don’t just track the numbers, but they plan for seasons of little activity.
Not Reconciling Accounts
Your bank statement isn’t always in line with your bookkeeping software. When reconciliation isn’t part of our regular routine, the little mistakes almost inevitably become big ones. Regular check-ins are good for catching errors early and to keep records clean.
Doing It All Alone
Many entrepreneurs attempt to do their own bookkeeping. That’s time that could go to sales, marketing, and serving customers. It can also lead to making costly mistakes. Finding some help from a bookkeeper, accountant, or fractional CFO adds time to the clock and peace of mind.
Mistakes in bookkeeping occur, but they don’t have to doom a business. Keeping clean records, segregating accounts, monitoring cash flow, and asking for help are a start.
“At Starpoint CFO, we offer fractional CFO and bookkeeping services, which means world-class financial management without the expense of a full-time person. With our help, you won’t make the same expensive mistakes, and that’d mean you’d stay cash flow positive & simply scale your business. "
I look forward to seeing how these developments will improve service levels and customer satisfaction in the freight industry!