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Five Bookkeeping Flaws You May Be Making
By: Rachel Raupp
When it comes to your books, accuracy is vital. You want to handle them properly so the information you’re using is error-free and understood. If you’re doing any of the following, you’re not helping your books or your company.
- Mixing business and personal transactions
Keep your business and personal transactions separate. Mixing the two will make your bookkeeping messing and confusing, and the IRS does not support this.
- Not asking questions
When you meet with your accountant, do not be afraid to ask questions. If you don’t understand a report and don’t ask questions, this is detrimental to everyone involved. Rather than seeing or hearing “blah, blah, blah,” ask what it means or how it impacts you and your business. Your accountant wouldn’t share this information with you if it wasn’t important!
- Not handling Sales Tax/Payroll Tax correctly
In QuickBooks, Sales Tax and Payroll Taxes are handled differently than other accounts. Instead of writing a regular check and recording the payment, you need to write a liability check so QB can properly and accurately keep track of your liabilities.
- Not recording payroll the right way
It’s best to use a payroll service so you will know that your taxes are being collected and paid correctly. The biggest mistake people make when doing payroll is recording all of the taxes paid as payroll tax. In reality, the tax payment will include the employer portion and also the employee portion, using the taxes withheld from their check.
- Ignoring the bookkeeping
We understand business owners are busy people. We can relate! Who has time do the bookkeeping while you’re building and managing your business? It’s important to make time for bookkeeping or hire someone to do it for you. Your books cannot be overlooked. Hiring a professional to do your books means they are being done correctly and the vital reports will be given to you to review. If your numbers are not tracked well, you will never know anything for sure.