7 Accounting Mistakes Every Small Business Should Avoid [infographic]

HomeBlog7 Accounting Mistakes Every Small Business Should Avoid [infographic]

Finances are the foundation of any successful business venture. As a small business owner, there are several mistakes you should avoid to protect the growth and vitality of your operations from a financial perspective. 

  1. Tracking income incorrectly—You could end up underreporting or overreporting your business’ income if you fail to accurately track your small business’ revenue. This can lead to tax consequences later on.
  2. Overestimating cash flow—Running a small business requires adequate cash flow, but you may overestimate how much cash your operation has on hand. When you overestimate available cash, this can make it difficult to fund important purchases and pay your vendors and employees.
  3. Forgetting to pay invoices—Most vendors require payment within 30 to 60 days after providing service. Although it is easy to overlook these due dates, doing so can damage your vendor relationships and lead to late fees.
  4. Tracking expenses improperly—If you do not track your business expenses properly, your business’ taxable income can increase, which can result in a higher tax bill at the end of the year.

7 Accounting Mistakes Every Small Business Should Avoid

  1. Mixing personal and business finances—Blurred lines between your business and personal expenses can create problems when you apply for business lines of credit. It can also make it harder to effectively track your business expenses.
  2. Failing to plan for tax season—Piecing a year’s worth of documents and receipts together at tax time is an avoidable mistake. As a small business owner, you must plan for tax season all year round to properly comply with complex corporate tax laws.
  3. Waiting to hire professional help—If you don’t feel completely confident handling your business’ finances, or you just don’t have the time, hiring a professional can ensure accurate records while supporting your business’ success.