Unlike the huge company giants, small start-ups handle their accounts on their own! They don’t have enough resources, nor do they always have the updated experts! Thus, there are bound to be some mistakes in accounting and management!
But some mistakes can become a grave threat to the firm if not taken care of on time! Because, while you can ignore or rectify certain small and minor mistakes, it isn’t always possible to rectify certain larger ones!
Today’s blog will act as your guide to let you identify in time certain accounting mistakes that can be damaging for your firm!
There is no point in doing accounting with the wrong records! So, if you are not maintaining accurate records and entries, your business is bound to lose money rapidly!
You may forget some important bills or payments that were meant to be done! You can lack preparedness for setting up taxation systems etc.! And there are numerous other things that can go haywire with inaccurate maintenance of record! These errors are not only the ones where you forget to enter a particular transaction in your books; it also includes reflecting bill payments and keeping receipts of all exchanges for taxation! Good Accounting Software will help make this task easy for you!
2) Mixing up finances:
Many times, small entrepreneurs add the capital finance required through their personal gains and often end up mixing both! It is quite understandable that in such cases the line between personal and professional finance is very meek!
But the mixing of these two can be a very tricky affair as later it becomes difficult to differentiate the expenses! This will also create issues while applying for loans or credit scores!
Once you get these both mixed up, taxation becomes really taxing!
3) Improper tax planning:
Even if you DIY tax planning, you can trip on your way if your accounts and books aren’t in place. This means you will be struggling the last minute to get it all together entry-by-entry! Plus, this will also mean that your business may not be in complete compliance with the upgraded rules and regulations!
4) Failure to hire an expert:
Even if DIY seems like an affordable option for new firms, it isn’t always a clever one! These CPAs are well versed in their field and know the ins and outs of it! By not hiring one to look into your finances, you are exposing your business to certain gaps and tricks hidden in accounting that you may not be aware of
This can be a fatal mistake in your accounts!
The Satyam Scandal is a classic case study of deliberate falsification of accounts. Some of the major errors in the accounting books were the reason for a whopping loss suffered by the firm.
Be open and always alert about these kinds of issues in your business!
Boston Financial has a team of experienced and affordable CPAs who can help you identify and resolve these issues. Interested in learning more about our startup solutions and CPA solutions, get in touch with us today!
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