Avoid Accounting Errors
Whether you have twenty years of experience or you are new to business finances, anyone can make accounting errors. Whilst this can often be difficult to avoid, there are several precautions you can take to avoid frequent accounting errors.
Roger Hatherall & Co can assist all businesses in Bath, ensuring your finances are managed without any errors. We can both advise you or take full control of financial management.
Record All Transactions
The easiest way to avoid mistakes is to make sure you are recording transactions. Whilst this may not prevent errors from occurring entirely, it means any errors that do occur can be easily tracked. If you notice a mistake in finances, without recording every single transaction, it can be difficult to understand where final figures have come from or where the error occurred.
This gives you a risk that many figures may be inaccurate. Recording everything allows you to easily make amendments, as well as backtracking to find unusual transactions and possible errors. Also, the more you record, the more your accounting skills will improve. By regularly tracking, you will reduce the risk and frequency of errors as you are used to completing your accounting.
Whether you complete bookkeeping online or you live in the dark ages of paper, it is essential to prepare backups. If you do choose to complete finances on software and online, you could always be exposed to potential data loss and corruption, regardless of how secure and modern your network may be.
Preparing backups is much easier online and through software than on paper. However, if you choose to complete accounting on paper, backups should still be made. This ensures if you ever lose financial data, you always have a solution to prevent any issues occurring or having to make estimates with your finances.
Separate Business & Personal Accounts
As a business owner, your business accounts should always be a priority. This will often mean you should separate your business and personal accounts so you can easily focus on business finances, preventing any errors from occurring and ensuring you don t mix up numbers from your two different financial accounts.
This can also help to separate the time you spend on both accounts. If you are constantly working with both personal and business accounts, it could be very time consuming and cause confusion by completing them together. Your business accounts should always be separate to avoid errors and make the process of monitoring transactions and cash flow much easier.
Invoices & Receipts
Along with recording all transactions, you can also reduce the likelihood of accounting errors by keeping invoices and receipts. Regardless of how small an item may be, you should always keep the receipts and invoices so this can be transferred to your business accounts quickly and accurately.
Invoices and receipts also give you the initial proof of all transactions. Whether this is required for tax investigations or to create annual accounts, this can be very useful for proof of bigger and more important transactions.