The Mistakes to Avoid
When we first start a business we all make mistakes. Even veteran business owners make mistakes. But here are 5 rookie mistakes you may be making in your business that can cause you a lot of headaches.
#1 Missing information– Do you frequently lose receipts? Do you have trouble keeping up with all the paperwork that you need? Many business owners are busy but not keeping up with paperwork and receipts can cost you big on your taxes due to lost deductions or worse, during an audit. Develop a system to keep up with all your paperwork. Use an app like Hubdoc to easily access your bills, bank statements and receipts. Hubdoc allows you to take a picture of a receipt and upload it through the secure Hubdoc app so now you don’t have to worry with lost receipts.
#2 Not collecting what is owed to you – This is the least favorite of a business owner. You send out invoices to clients but some consistently pay late or don’t pay at all. What do you do now? Plan ahead and put policies in place with clients that outline the expectations for payment and consequences of late payments or no payments. Consider requiring upfront deposits for large projects or certain types of work. But most of all, follow through on the policies you have in place. Poor collection of accounts receivables can derail a small business. Don’t let your business fail because you don’t manage this area.
#3 Mixing personal and business expenses – All businesses should have a separate checking account and credit card from your personal account. As an owner you can take payment from the business through a paycheck or distribution. Have a clear paper trail to document when you remove funds from the business and transfer to you personally instead of charging personal expenses to the business. Doc-ument on the receipts of the business the reason for the expense and client name or job if it was related to a client matter. This will cause you a lot less headaches if you are ever audited.
#4 Ignoring laws or compliance issues- A business owner must stay up to date on the laws and com-pliance regulations that effect their business. Not knowing about a law or regulation will not save you from fines, penalties or worse—prosecution. Seek out an expert for help. It may just save your business.
#5 Not asking for help when you need it – You are busy running your business. Bookkeeping is the last thing you want to do at the end of a long day. Whether you need help setting up your books, train-ing to do some tasks on your own or someone to handle everything for you, Blackburn Consulting can help. We have the expertise to train you in the most popular software programs, set up your books right from the beginning or handle all the tasks for you so you can focus on what you do best – run your business.