Accounting errors happen all the time. Small mistakes accumulated in the end might turn things ugly.
Therefore, a good idea is to keep a check on all the probable mistakes and then try and minimise them from the start itself. With proper care and a bit of extra attention, many errors and mistakes can be eliminated.
Here is a list of common mistakes that many small business owners make during their practice:
* Not following the correct accounting procedures:
Even if you are a small business owner, you are a self-employed individual or a freelancer, you NEED TO HAVE a proper formal set up of your own that will entail a detailed procedure of managing the bookkeeping or an accounting system. It is always very good to create standardised forms and checklists that complete the consistency and the accuracy of the client and its details.
* Not having the proper budget:
You need a basic financial plan to work out your business and its results functioning and applicability. Moreover, they will also stop you from over speeding and also in setting up practice as well as realistic goals and objectives. Make sure that the budget is always based on reality.
* Data entry Error?! Never accepted!
This is one of the most common entries that happen from time to time. Though you cannot expect that your data entry errors will be totally minimised, you need to have developed the accurate mechanism that let you identify them as soon as you make them and therefore the accountants contractors can correct it. You can also perform a budget to actual variances that lets you identify the errors in classifying the expenses and make sure that all the receipts and transactions are reasonable enough. All the unusual or doubtful transactions should be double checked so that all the entries are very much accurate.
* Forgetting to back up accounting software:
For the best of advice, having the backup of all the data and relevant information is one of the best things that you would be doing for your business. There are many accounting software available that let you keep a track of all the data and information that you make use of. Use it. Double check to see whether your files are getting backed up, because files might get corrupt quite easily and there is always a chance of losing the data that you have saved all your life or the clients’ entries that you have worked upon.
* Taking all the responsibility on you:
You should think of outsourcing all the work that adds no value to your business. It will prove to be one of the most beneficial steps that you would ever have taken for your business. You can easily find professionals and experts who do tasks depending on your requirements. This will not only make sure that your tasks are handled by the professionals apart from you, but it will also mean that you now have more space and time by yourself that you can think of devoting to activities that generate more revenue and money.
Outsourcing various legal, accounting and other administrative tasks to some of the outsource accountants company can help reduce the mistakes and therefore increase the profitability if you spend your time and sources very wisely.
We are established Secretarial and Accounting Services firm in Singapore providing one-stop secretarial and accounting solutions to multi-national companies (MNC’s) in Singapore, small and medium enterprises (SME’s) and start-ups.