Bookkeeper Mistakes That Greatly Affect Your Business

Some businesses are doomed to fail due to mistakes which are left uncorrected. These mistakes may be simple, but they can great affect your business if you do not take the time to talk to your bookkeeper to find out what really is going on. Some bookkeeping tasks may be repetitive while others require extra time due to their complexities. One thing is for sure though: failing to finish the task can create a ripple effect on your business. There are reasons a bookkeeper may commit mistakes: inefficiency or lack of resources. Whatever the reason, it is important that you and your bookkeeper see eye to eye so you will know which direction your business is heading.

1. Not monitoring cashflow

Cashflow is essential to your business because it is an indicator of your future business plans. A key part of this role is ensuring that your debtors pay you promptly and your bills are also paid on time. Your bookkeeper should pay attention to metering the cash out and getting the cash in. If the bookkeeper is not paying attention to these things, your business can end up insolvent. It is important that your bookkeeper completes debt collection, invoicing, receipts, purchases, purchase orders and bank reconciliations. Mistakes with cashflow monitoring can be avoided if your bookkeeper regularly updates you with the current cash position of your business. Your bookkeeper should also help plan for the cash requirements for any business development you are planning.

2. Not cooperating with your accountant

Although your bookkeeper is not as qualified as your accountant when it comes to correctly handling everything, it is still important that your bookkeeper work with your accountant. There are financial aspects of your business that might be complex and your accountant may be needed to deal with the problem. Your bookkeeper must coordinate with your accountant to attend to responsibilities such as payroll and superannuation, compliance and coding. Make sure you enable strong lines of communication between your accountant and bookkeeper. When your bookkeeper complete tasks in a timely manner, more tasks will be accomplished.

3. Not keeping all receipts

For legal purposes, all your receipts and invoices must be filed and archived for at least 5 years. These will serve as strong evidence in case someone sues you. It can also support your case if you are going to use. The receipts and invoices are also going to justify any claims you make. Your bookkeeper should file your paperwork accurately and in a timely fashion. You can also go paperless so prevent losing important documents.

Tamara Deterding

Written by : Tamara Deterding