Denver, Colorado – All over the United States there are small businesses that are struggling to keep their doors open. There are several reasons why small businesses fail within the first year, but one very common reason is forgoing necessary Bookkeeping services. As we all know, without a trained and licensed bookkeeper doing the company’s regular accounting, a business can have a lot of financial trouble ahead.
“As a trusted American bookkeeping company, we are dedicated to helping small business owners succeed. These are the biggest and most common bookkeeping mistakes to avoid,” begins one of the experts employed at the American Bookkeeping Services.
“The first mistake is mixing the business account with your personal account. At first, it might seem easier to manage because there is only one account to keep tabs on, but financial matters will get confusing fast!” The expert warns. “Secondly, if managing more than one account is too much to handle, don’t ignore the books! Invest in the services of a professional accountant instead. It will be one of the best and smartest decisions of your life.” They add.
It is also fairly common for small businesses owners to take on too many responsibilities themselves. “While you might be able to save some money doing your own bookkeeping, there is no denying that a professional accountant will take the stress and burden off your shoulders.” Another accountant adds. “Give yourself a break so that you can concentrate on your business instead of the books,” they conclude with the third mistake.
“Also, never forget to analyze the cash flow.” The experts agree. Up to 80% of all startups fail because they do not manage their cash flow properly. Take time to analyze the inflow and outflow of cash to detect any discrepancy and to manage the cash better.
The fifth most common mistake is not paying yourself (the business owner). “Remember, you are also working for the company which means you deserve a salary. When you don’t pay yourself you are tempted to dip into the company’s finances which will hurt your profitability.” Reminds the professional accountant.
“While on the discussion of mistakes, also avoid hiring people too quickly and offering cheap rates.” Adds another expert. “Take the time to find the right people and invest in them. When you hire the right team, your business earns from their skills and loyalty, not just their services,” they explain.
As for the seventh must avoid bookkeeping mistake, remember to plan for the future. Don’t just take each day as they come. Being a business owner means you need to think of possible expansion and even times of struggle. “As long as you have a contingency plan and a reliable savings set aside, you should be good.” Confirms a bookkeeper.
“Finally, a common and very costly mistake many small business owners make is spending too much on inventory.” Says the experts of the American Bookkeeping Services. “Don’t get too excited. Test out the market first before investing too much in your inventory only to find out no one is interested,” they advise.
It can be a struggle to keep a small business profitable with the right financial experts and accountants helping you, your chances are significantly higher than before.