Bookkeeping is an important part of a given organisation. It is the process of documenting the financial transactions of a company. This strategy enables the organisation to monitor its financial health, as well as helps management make informed business choices. If you are searching for cheap accountants in London, get in touch with us today for a free consultation! In the vicinity of you
Bookkeeping requires meticulous attention to information, so the organisation can be affected by any single error. It can also cost the company's finances greatly, leading to losses instead of profits for the company. No organisation wants to feel that. That said, it is necessary to be aware of common errors in bookkeeping committed by many businesses.
No Record of Receipts Less than £10
It is easy to ignore all financial transactions amounting to less than £ 10 for many businesses. Chances are, you and most of the workers are probably throwing out less than £ 10 receipts. Yeah, these aren't huge amounts of money, but think about how much they will sum up by the end of the year. The balance of finance can be significantly influenced by any single transaction that is missed in the documentation process. Be sure to keep a record, as a rule of thumb, of every transaction.
Lack of Communication
The lack of contact is one grave error in bookkeeping. Most company owners do not meet with their bookkeepers frequently. Chances are, there could be pending issues that you should be aware of that require your advice or financial problems. In addition, these accounting books should always be rooted in your company preference. You need to regularly interact with your bookkeeper while doing so. This would also make it easier for you to verify whether or not the accounting books are up to date.
No Check-Keeping of Petty Cash Funds
Finally, most firms do not track small cash expenses. Chances are, without documenting them, they take them out of the cash flow. In the type of cash used for expenses, petty cash is a limited amount of discretionary funds. When not properly documented and regulated, this simple act of hoarding money can lead to your company not claiming all of your business expenditures. As a consequence, your company could end up paying more in business tax. You don't want this to happen, of course. Make sure to record all transactions, whether big or small, as described.
Ultimately, bookkeeping isn't just about monitoring all financial transactions and documenting them. It can also mean financial tracking and business decision making. It requires proper book reconciliation and cost regulation. Avoiding all the common mistakes listed above will bring out the best in the bookkeeping phase of your business, serving its purpose well for the company's benefit.
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