Hey there, lovely solopreneurs! Today, I’m diving into 8 common bookkeeping mistakes. I know, I know, the title sounds a bit ominous, but stick with me – it’s important stuff!
Mistake #1: Neglecting Records, Receipts & Backups 📂🧾
Let’s face it – the IRS likes paperwork. So, every transaction needs a cozy spot on your books. Keep those receipts in a labeled email folder, a hard copy stash, or a digital folder. And hey, double-check those transactions to ensure you’ve got backup for every single one!
Mistake #2: Procrastinating Until Tax Time ⏰🔍
Waiting until the eleventh hour? Trust me; it’s a recipe for chaos. Categorize weekly, monthly, or at least quarterly. It beats the tax-time frenzy and might just uncover some hidden treasures!
Mistake #3: Playing Hide and Seek & Cheating On Your Taxes 🕵️♂️💸
Ignoring taxes won’t make them disappear – they’re not magic tricks. And cheating on them? That’s a definite NO-NO! Avoid the penalties; just pay your taxes. If in doubt, ask a professional. This post on what is actually deductible could help: HERE And, no sneaky moves, please!
Mistake #4: Juggling Personal and Business Accounts 🤹♀️💼
Separation is key – not just in relationships, but in finances too! Keep personal and business finances apart. It’s essential for IRS compliance, but it’s also about keeping a clear head in the financial game. You can read more in depth about separating your personal from your business finances HERE
Mistake #5: Categorizing Like a Mystery Novel 🕵️♀️📖
Get specific with those expense categories! It’s not just about avoiding IRS side-eye; it’s about gaining valuable insights. And trust me, vague categories are the hidden villains in your financial story!
Common Miscategorizations:
- Double Trouble with Income: Recording it twice? Let’s avoid that unnecessary drama. This happens a lot when you have your merchant app (Square, Stripe, etc.) connected to QBO, because the app records the income and the bank also records the income. Make sure you match up those payments or you’ll be inflating your income, which means you’ll be paying more in taxes!
- Owner’s Draws Drama: They’re not expenses – they’re your hard-earned rewards!
- The Vague Abyss: Don’t let expenses wander into the ‘uncategorized’ abyss. Bring them into the light!
Mistake #6: The Silence of Unreconciled Bank Accounts 🤐💰
Bank accounts need love too! Reconcile to catch duplicates, track personal expenses, and maybe even discover some missing money. It’s like a financial detective game – Sherlock would be proud!
Mistake #7: Running Away from Reports 🏃♀️📊
Quarterly reports are like business health check-ups. Balance sheets and profit & loss reports spill the tea on what’s going on. Think of them as your business’s diary – juicy and revealing!
Mistake #8: The Great Bookkeeping Bargain Hunt 💸🔍
Invest in quality bookkeeping services, my friends. It’s not about pinching pennies; it’s about gaining a financial ally who won’t leave you scratching your head.
So, these are the top 8 goof-ups people make when navigating their financial realms! If you find yourself in the midst of any of these blunders, fear not! It’s all about baby steps towards financial glory. Dive into my course, Bookkeeping: Beyond the Boring to unravel these mysteries HERE!