Common Mistakes People Make When Setting Up Bookkeeping Software

Bookkeeping tasks can be a source of hassle for a lot of business owners. The piles of paperwork, concern over potential errors, it all adds up. There is no good reason for this stress. If you aren’t sure what software to use or how to use it, get a professional bookkeeping firm to recommend one and set it up for you. Some of the most common errors are easily fixed, while others may need a more complex solution. To help you avoid or easily fix some basic errors that could prove to be costly, Savvy Bookkeeping has put together a list of the most common mistakes people make when setting up bookkeeping software. 

1. Not understanding the basics of business finances
The most common mistake in setting up accounting software is not understanding the basics of business finances. This leads to errors in categorizing money in and money out. When armed with the right information and tools, you can keep bookkeeping errors to a minimum. This will help ensure your business has a stable foundation for growth and prosperity. 

2. Allowing too many people to have access to the financial records
When too many people have access to the financial records, it leads to making many mistakes and/or opens the door for the pilfering of funds. Not every employee needs to be in the know of every detail of your business’ finances. This can simply be avoided by using the settings in the software to limit access on a need-to-know basis.

3. Not addressing old mistakes 
Another common and avoidable mistake is allowing old errors to stay on the books. Not addressing these errors leads to confusion in reporting and potentially incorrect tax payments. No one wants penalties, added debt, or worse, having your business audited. Make sure you handle your mistakes efficiently by acknowledging it, taking steps to correct it, and making the necessary changes in the books. Then, and only then, should you forget about it. 

4. Not reconciling your account
Another mistake often seen is the lack of reconciling of accounts. This can lead to many issues such as overdrawn bank accounts, missed payments, and poor credit scores. This can all be avoided by hiring a professional to maintain the books on a regular basis in a smart and efficient way. A professional will have the necessary skill, experience, and time to make sure that your ending balances are correct, while you can breathe a sigh of relief knowing that the discrepancies, if any, can be explained in the reconciliation statement they provide.  

5. Not tracking your expenses
Many customers make the mistake of not tracking their expenses properly, mostly due to the perceived drain on their time. Remember to track your receipts in an effective manner, as they help you gain a better idea of the overall monies leaving the company accounts. Do not throw away those expense receipts – they are proof of monies spent for tax returns. There are many mobile apps that assist in keeping this task quick and accurate. All you have to do is take the time and effort for the benefit of your company. 

6. Thinking of us as a “necessary evil” and not a means to help your company out 
Many business owners regard hiring a bookkeeper as a “necessary evil”, rather than regarding them as a partner to help their business succeed. Remember that a professional is an expert in their field. This means that your company finances are always managed by someone who knows how changes in tax laws and regulations will affect your company. As a business owner, it is impossible for you to handle and run every aspect of your business. A professional will have your best interest at heart and take the time and effort to help you succeed. 

To avoid these and other mistakes, reach out to the experts at Savvy Bookkeeping. 

There is no “one size fits all” formula that we apply to work with clients. We approach each new client as an opportunity to build a new relationship - one based on “healthy trust.” That is why it is so important to us to take the time to get to know each new client as an individual, and as a person with specific concerns, needs, challenges, and goals, not just another “account to be managed.” We offer services such as full-charge bookkeeping/remote bookkeeping services, QuickBooks software training and support, and monthly account management services to clients across Danbury, Stamford, Greenwich, Darien, Norwalk, Westport, Fairfield, Connecticut, and throughout the USA.

For a complete list of our services, please click here. If you have any questions about bookkeeping, we would love to hear from you. Please contact us here.