Bookkeeping Mistakes and How to Avoid Them

1. Not Keeping Personal and Business Finances Separate

Mistake: Mixing personal and business expenses can lead to confusion, making it hard to track business profits, expenses, and tax obligations.
How to Avoid: Open a separate business bank account and use it solely for business transactions. Consider using a business credit card too.

2. Failure to Reconcile Accounts Regularly

Mistake: Neglecting to reconcile bank and credit card statements with your accounting software can lead to discrepancies.

How to Avoid: Set a monthly schedule to reconcile accounts.
This ensures any errors are caught early.

3. Neglecting to Track Small Transactions

Mistake: Small expenses often go unrecorded, which can accumulate over time and lead to inaccurate financial reports.

How to Avoid: Track every transaction, no matter how small.
Using accounting software with mobile apps can help log expenses on the go.