9 Habits That Will Ruin your Company’s Bookkeeping
1. Failing To Understand Key Accounting Metrics
Quick! What is your gross profit margin? If you aren't sure about this or any other key performance indicator in your accounting data, put this as your #1 bad bookkeeping habit to remedy this year. After all, you can't budget and forecast with a guesstimate.
2. Failing To Stay On Top of Your Aging Reports
Have you sent out all of those invoices? They're terrific up until the point you fail to keep track of whether or not you got paid. Sending invoices are only one piece of making sure you have enough money to be in business, however following up with regards to payment is the other half of the battle--if your cash flow doesn't show it, you have a problem.
3. Not Standardizing the Monthly Financial Report Process
Whether you get a robust array of reports or simply a review of your balance sheet and P&L each month, make sure you get the proper report every month, every time. By standardizing reports and establishing expectations, you will have a better time tracking and analyzing key financial data.
4. Ignoring Opportunities for Accounting Integrations
All that pretty data you painstakingly input into QuickBooks? Guess what? It speaks to a lot of other platforms as well! If you're utilizing programs for expense management, inventory or bill payment (among others), make sure you successfully integrate your platforms, so they run smoothly together. Data synchronization will reduce the chance of error as well as improve your time management and efficiencies.
5. Hiring an Amateur For a Professional's Job
The IRS won't care if you saved a few dollars by hiring someone who simply didn't know enough about doing things the right way. It's much more beneficial for your company to spend the extra thousand dollars to hire a professional that delivers high-quality work, rather than save money, and deliver a poor financial report that could mislead your business.
6. Skipping Accounting and Bookkeeping Training
With constant changes in everything from your accounting software to bookkeeping regulations and best practices, staying on top of current rules and technology is a must if you want your bookkeeping to remain impeccable.
7. Not Setting Aside Payroll Taxes Regularly
Are you trying to do payroll processing in-house? If so, you might want to reconsider when the IRS comes knocking at your door to make sure you're doing the right thing in the ever-complicated world of payroll management.
8. Not Setting Concrete Deadlines and Due Dates
Always wondering where something is? Not sure when your report will be delivered? Lacking concrete deadlines and due dates is a habit sure to keep your bookkeeping late and inaccurate, which in terms of a small business, could mean the end of your company.
9. An Overflowing Filing Cabinet
Maybe you have stacks of invoices on your desk and maybe your bookkeeper isn't the most organized. Either way, this style of bookkeeping is sure to have you missing deadlines. At the very least, make an effort to buy a scanner this year and get started on a virtual filing cabinet, preferably not such a messy one, in order to keep everything in an organized and presentable manner.
8 Comments
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Jack,
Thank you for your kind words on our layout and design here at FlowRocket!
On your Chrome compatibility issue, we will definitely get this looked at so our readers can fully view our content, as of right now we work with Safari, but this issue will be addressed shortly.
Again, we really want to thank you for your comments, feel free to check out our other blog posts as we have loads of Technical/Business related topics! The best way to show thanks for our content is with sharing, send your colleagues or other work-related associates links to our pages so we can get the word out about how useful this information can be for you and other businesses as well!
We are releasing (very soon) more blog posts that will talk about how our software increases productivity, and streamlines business workflows for time-saving, cost-reducing, and time-efficient operations! Be sure to come back soon to see our latest posts!
Kind Regards,
Xerxes
Great post! I think this can be especially helpful for small business owners who are trying to do their own bookkeeping whilst starting out. I think it’s important to also consider hiring a professional bookkeeper when things start to get a little more complicated. However, this post is extremely useful! Thanks for sharing your thoughts!
Sarah,
Thank you so much for your comment!
We too find it incredibly useful to outsource bookkeeping in professional and start-up settings. It can take a lot of stress off of your shoulders and allows your company to focus on more important, core business operations. Feel free to check out some of our other blog posts as a lot of our information is targeted towards businesses of all sizes!
Kind Regards,
Xerxes
Good day! I know this is kinda off topic but I’d figured I’d ask. Would you be interested in exchanging links or maybe guest authoring a blog post or vice-versa? My blog discusses a lot of the same topics as yours and I believe we could greatly benefit from each other. If you’re interested feel free to send me an email. I look forward to hearing from you! Fantastic blog by the way!
Good day to you too!
Absolutely! I would love to get in touch with you so we can exchange links and guest author a blog on your site as well as take your input on a blog on our site! You can reach me at cmo@flowrocket.com, so feel free to send over an email for some further discussion.
Best,
Xerxes
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Tiffani,
Thank you so much! We appreciate your thoughts and compliments over here at Flow Rocket!
Best,
Xerxes