Common Accounting Mistakes And How To Avoid Them

For financial reasons, most entrepreneurs try to handle their own accounting when they start out. However, tracking every penny of income, expenses, taxes, and vendor payments is tedious and time-consuming. As a result, errors can be committed easily, and they can cost your business a lot of money and significantly hinder growth or adversely impact your bottom line.

Therefore, to help you prevent such financial errors, Denali Accountants has put together a list of the most common accounting mistakes people make and, more importantly, how to avoid them.

1. Trying to manage your own accounts
Even though there is software out there that can make this easy for you, it still needs time from you. If you’re a one-person team, you may find that you don’t have enough time to split between everything you need to do and your accounting responsibilities.

If you’re struggling to deal with it alone, then hiring an accountant may be the right option for you so that your time can be better spent elsewhere.

2. Hiring an accountant who lacks qualifications
If they are unable to explain accounting terms to you, then they may not know what they are or why they’re needed. This could mean that mistakes will get made or that your accounts will be improperly prepared, leading to further problems.

Also, make sure they are aware of the current rules and regulations that are in place when it comes to accounting. If they don’t know how to handle certain financial issues, this should raise some red flags when it comes to hiring them.

3. Not using accounting software
If you’re keeping track of your business finances in an Excel spreadsheet or a paper ledger, you may want to consider upgrading to software. Investing in the right accounting software can help you avoid mistakes and ultimately make it easier to handle your finances.

4. Hiring the first accountant you meet
There are numerous accountants that want you to hire them, but they may not be the best fit for what you’re looking for. Keep an eye out for accountants that promise the world during your first meeting, as these may not live up to your expectations. Also, they may be more used to working with larger clients that need the world. Being a small business, you may not need all the services they are offering. Keep this in mind when they’re trying to sell you all their services.

5. Hiring the cheapest accountant you find
This goes without being said; sometimes, services can be cheap for a reason. When dealing with accounting, you can’t afford to have someone make mistakes. Hiring the right accountant can save you money in the long run and should be viewed as an investment rather than an expense that should be tolerated.

A competent accountant can help save you money, advise you about tax, current laws, etc. If you hire a cheap accountant, they may not provide you with all the information to make decisions about this.

To avoid these and other mistakes, reach out to the experts at Denali Accountants. We are a women-owned and run bookkeeping and accounting firm specializing in consulting, advisory, accounting, and bookkeeping services for mid-size and large businesses covering a variety of industries such as cannabis, real estate, restaurants, contractors, and professions.

We are your premier QuickBooks Pro advisors, and we understand your needs and deliver a personal service catering to the specific needs of your business.

For a complete list of our services, please click here. If you have questions about small business accounting, we’d love to hear from you. Please contact us here.