Common Accounting Mistakes Made by Small Businesses

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Did you know that hiring a CPA for accounting services in Kearny, NJ will drastically decrease risks for your small businesses? Well, it's not unusual that most small companies naturally have fewer resources compared to larger enterprises. That's why it's common for managers or owners to often take on the role of bookkeepers and accountants. Although this may seem like a good idea to save money, this also puts you at risk of making mistakes. The sad part is that most owners or managers are not aware that they are actually making these mistakes until they eventually hire a professional to take over the job.

One of the most common difficulties small business owners face is balancing their books for the tax season on their own. But if you hire actual professionals for tax services in Kearny, NJ, you will rest easier knowing that your finances are in good hands. 

Now, let’s take a look at the most common accounting mistakes made by small businesses:

Procrastination

Why do it today when you can just do it tomorrow? Well, it turns out stalling won’t make the work any easier. In fact, it will make it ultimately harder for you to catch up as the work piles up. And when you’re cramming to finish the work on time, the chances of making mistakes rises exponentially. Although bookkeeping and accounting may not be your favorite part of the day, it's essential to do it regularly so that you know the current state of your business and you won't have any problems come tax time.

Mixing Personal Finances with Business Accounts

These lines are often blurred by small business owners, and it's understandable when your business is just starting. However, doing so will make it tougher to sort out personal from business transactions. One instance is when you buy office equipment and personal items at the same time, and you only have one receipt for both. You could be missing some expenses that you could list as a business deduction, and you wouldn't even know it.

Math Errors

When you're tired, stressed, and confused, it's all the more easier to make math errors. You could end up entering figures in the wrong place or not round off figures properly. Although the IRS will often correct simple mistakes for you if discovered, not every agency will do so, and there are some errors that they can't identify. Remember that these can have a cumulative effect on your finances that won't be in your favor.

Not Hiring an Accountant

Let's face it, you probably aren't a finance professional and you know it. There's nothing wrong with wanting to try out things for yourself and saving money, but there are also times when it is absolutely necessary to hire a professional to do it. Hiring an accountant will minimize potential errors in key areas and will keep your business out of trouble in the long run. 

Nicholas J. Coco, CPA located in Kearny NJ, provides accounting and tax services to businesses located in northern and central NJ. As a licensed professional, he will handle the financial side of your business, so you don’t have to worry about a thing. Get in touch with us today.