Do you ever find yourself with issues like duplicate transactions, or miscategorized transactions? Then you need to learn how to do proper bookkeeping!
If you would like to maintain control of your bookkeeping, my bookkeeping essentials coaching program will teach you have to navigate these issues and so many more! If you no longer have the time to spend doing bookkeeping regularly, it is time to hire a bookkeeper. I would love to chat and see if we are a good fit.
Some may feel like they no longer have the time but they want a family member or close friend to help them with their bookkeeping. That is fine if they get properly trained. I offer training for those who want to help a small business owner as well. Honestly, QuickBooks Online is not a hard software to learn, as long as someone is willing to put the time in to learn and you’re willing to allow a few mistakes while they learn then that is great. I am more than happy to help. Keep in mind, each business is different so I do offer bookkeeping training that is general bookkeeping training, Bookkeeping Essentials, or I offer one-on-one training sessions. I usually suggest a business do the Bookkeeping Essentials course so you learn the basics and learn about your business financials then we can met and go over any questions you have with my one-on-one training.
It is important that you regularly do your bookkeeping so you can keep your records up to date and know how successful your business is doing! Without proper bookkeeping you will file taxes incorrectly and could be paying more in taxes than you should. You do not want to do that! Taxes are no fun as it is! We want to save as much as we can on taxes and proper bookkeeping helps us save on taxes!
If you do not do bookkeeping regularly, you could have some of the following issues.
1. Duplicate, missing, or miscategorized transactions
2. Understated or overstated income
3. Missed fraudulent charges or missing dues and subscriptions that are no longer being used
4. Comingling between business and personal funds
5. Missing tax payments
Let us dive into the above issues in more detail.
The most common mistake I see with clients who do their own bookkeeping is duplicate, missing, or miscategorized transactions. A duplicate transaction is a transaction in your books that is listed more than once. Sometimes it could be even multiple times. This is bad because then you are over reporting either income or expenses. The best way to catch this issue is to reconcile each month. When you reconcile each month, you will be able to make sure that the balance in your accounting software matches your bank statements.
A missing transaction is a transaction that is not reported in your bookkeeping software. This is bad because then you are under reporting income and or expenses. In order to catch these transactions, you need to reconcile each month.
A miscategorized transaction is a transaction that is accounted for in the wrong account. This is a little trickier to find. To find these transactions you will need to review reports such as the Profit and Loss, Profit and Loss Detail, Balance Sheet and Balance Sheet Detail. When reviewing these reports look at each line and make sure the number make sense. Often you can compare month to month or year to year to see if there is a big change. That is usually a red flag that means maybe something is miscategorized and needs to be moved to a different account.
Understated income while it may be nice to not have to pay as much taxes is a really bad thing. You want to always report all your income. On the other hand, if you overstate your income you will end up paying too much in taxes and you don’t want to do that. Make sure you double check your income and ensure that it makes sense. This can usually be caught when you are reconciling your bank accounts.
Very commonly my clients will sign up for a subscription and forget about it. Then the charge is being charged either monthly, quarterly, or yearly and they don’t realize the charge is still happening. When this happens, it is best to cancel the subscriptions you are no longer using. We all have fraud happen to our accounts at one point in our lives. It is best to keep track of accounts and review transactions regularly to ensure we are not a victim of unwanted charges on our accounts.
When starting a business, it is hard to keep your personal and business funds separate. I totally understand. It is best to get a separate checking account and maybe savings, or credit card that is used just for business. Then keep your personal accounts just personal. The practice of co-mingling can lead to an audit and if you are audited, when you are co-mingling, they are going to want to review all your accounts.
Lastly, when we don’t pay our taxes, we are subject to interest, penalties and late fees. Do not let your tax payments get behind. It is hard to caught up when we have not been paying our taxes on time.
I created a presentation that outlines these common bookkeeping mistakes in an easy to read and view format with pictures. Download your FREE copy today!
Ready to start learning about bookkeeping and need to start at the basics, it is time for you to get Bookkeeping Essentials, it will walk you through the setup and the basics of bookkeeping for your business.
Have questions about how you could do your bookkeeping better? Let us meet for 30 minutes and discuss what you could improve! For only $67 you can have a one-on-one training session with me, the Queen of Bookkeeping!
As always, I hope you have a great week and please feel free to reach out with any questions.