The Rules of Thumb blog from MoneyThumb does our best to inform our readers about all things accounting related. Today we would like to point out three mistakes small business owners make when they choose to handle their own accounting. We suggest if you are a small business owner, you hire a professional accountant to keep your books so you won't make the three following mistakes:
3 Mistakes Small Business Owners Make by Doing Their Own Accounting
The main responsibility a small business owner should have is that of building their business, not taking care of their accounting. By choosing to handle your own accounting you are taking precious time away from that job. Along with the neglect of your their main responsibility, small business owners who handle their own accounting usually make one or all of the following mistakes:
1. Misclassifying employees
More and more businesses today are hiring non-traditional employees like consultants, freelancers, independent contractors, and part-timers. Hiring this type of talent results in labor cost savings reduced liability, and flexibility in hiring and firing.
However, there has been a corresponding uptick in the number of employees who are misclassified. As tempting as it may be to classify a full-time employee as a contractor, doing so can result in costly fines and penalties that will trip you up down the road and hurt your bottom line.
2. Not knowing the status of their financials
Keeping up to date on your small business financials gives you the knowledge you need to make smart decisions and grow your business. However, according to SCORE, 40% of the small businesses polled said that bookkeeping and taxes are the worst part of owning a business. This is why hiring a professional accountant can be a crucial aspect of your small business success. Professional help can get you back to the enjoyable aspects of running your business. You may even find out that you aren't handling the financials as nearly as well as you thought you were.
Whether you need to free up the time to focus on the core areas of your business or want professional advice to maximize your revenue potential, a monthly accountant is a smart investment with lasting benefits. Working with an expert means you can save time and money on current expenditures, operate your business in the most tax-advantageous way possible, and increase your business's current revenue potential. A monthly accountant provides the measurable impact and results you need to stay competitive and grow.
3. Not learning their accounting software or Point-of-Sale (POS) systems
Online accounting software and POS, (Point of Sale) systems are a standard in today’s technology-driven business environment. The right online portal technology allows your small business to conveniently and securely log in to your accounting firm’s website to access documents, tax returns, financial statements, and other important materials; upload files for your accountant; receive news and other messaging from your accounting firm; pay invoices; and even access online small business software.
Your POS system is how you often receive payment from customers. So you really need to have a deep understanding of how to use your POS system effectively. Not learning your bookkeeping and accounting software or your POS system can create a mess, increase accounting fees, and have costly tax implications. The right accountant will provide the expert advice on how to learn your POS system inside out, and how your accounting software works to your advantage, which will free up time to concentrate on making your small business a success.
MoneyThumb actually believes there is a fourth mistake small business owners make when it comes to accounting, which is not taking advantage of the best PDF financial file converters on the market. By using one of our suite of products, you have instantly saved yourself tons of time that could also be dedicated to advancing your small business.
Leave a reply