Top 5 accounting errors business owners make
It is quite common for business owners to make accounting errors. Your focus is, understandably, on the success and growth of your business and that's what you're an expert in.
DIY accounts and bookkeeping
But the professional business owner in the Isle of Man doesn't even try to do this stuff themselves. Firstly, they know it's not their area of expertise. Secondly - they don't have time and thirdly, they know their trusted advisor will ensure they claim for everything they are entitled to.
With the aid of a trusted, expert small business accountant in the Isle of Man, you can save your business valuable money and time in the long run. Such savings come from the reduced level of risk of human error and the avoidance of late filing penalties due to missed tax deadlines.
You do not need the hassle of managing your own bookkeeping. Particularly when you need to dedicate most of your energies to training and empowering staff, developing and improving your products or services and improving your firm’s bottom line. When juggling all the above, it is not surprising that errors can creep into your accounts. Below are some of the most common errors that professional accountants find during preliminary reviews of small business’ bookkeeping habits. Overdue self-assessment tax returns When it comes to self-assessment tax returns, there are multiple deadlines and responsibilities for sole traders and business owners to be aware of. You must file your tax return on time to avoid a late filing penalty. Furthermore, you must pay the tax you owe on time to avoid incurring additional fines and interest on your bill.
To avoid penalties, you should enlist the help of a dedicated local accountant that can work on your behalf to maintain your tax return commitments.
2. Inaccurate records for expenses and invoices Simply send your stuff to your accountant and leave them to do it.
Drop your paperwork or scan everything ensure you never lose another expenses receipt, as you can quickly photograph or scan your receipt at source and send it instantly to your accountant.
3. Overpaying of tax The inaccurate categorisation or classification of regular transactions such as monthly subscriptions or payments happens more often than you think. Small business owners who handle their own books may classify these regular transactions in a certain column one month and include it in another column the following month, making it difficult to keep track of outgoings. Equally, it is also possible small businesses miss out on claiming the maximum allowable amount for tax because of this. They may even be forced to pay for their accountants to spend more time recalibrating periodic transactions under one heading.
4. Using unsuitable bookkeeping solutions Many small business owners will choose a bookkeeping software without identifying whether it is the right fit for the way they do business. If a business does not issue invoices, an accounting solution with an invoicing function is not necessary, for example. During initial consultations with a professional accountant, they will often specify an accounting solution that would work best for your business. Now is the ideal time for your small business to digitise your accountant can help you to do it.
5. Manual entry record keeping
Quite often business owners will use their family time, i.e. evenings and weekends, to work on the record keeping for their business which probably isn’t the reason someone chooses to work for themselves. Alternatively, this work can eat into the valuable time that could be spent improving or developing the business and driving up income. Timely, accurate accounting and bookkeeping really does add significant value to businesses of all shapes and sizes. It is a false economy not to lean on a professional so that you can focus on growing your business. There is no longer any need to fall victim to any of the above small business accounting errors.
Purple Accounts Isle of Man can help you with the right advice to help your business. For friendly advice and support, why not arrange a free initial chat about your accounting needs today?
Call 07624 336057 or email: email@example.com