1. Poor Accounting: This is one of the biggest problem areas. When you first start out, you are trying to build your business so you take care of the bookkeeping. As you grow you don’t have the time so you hire an office girl to answer the phones and do the bookkeeping. She may or may not have the proper training of knowing how to categorize transactions. It is so important to make sure your invoicing to your customer is done on a timely manner and your expenses are recorded properly.There is no room for unorganized and inaccurate accounting in business. You need to be able to track money coming in and money going out correctly. Even if it’s on a credit or debit card!
2. Mixing personal and business accounts: This makes it nearly impossible to tell if a business is profitable or not and the IRS could reclassify your business as a hobby! That could mean you could lose write offs of business expenses, plus the IRS could go back in an audit and hand you a really big tax bill to pay.
3. No internal controls: Having one person do everything is a very dangerous thing to do for several reasons. 1. To many interruptions when doing bookkeeping can cause human error. 2. Trying to multitask causes mistakes – unfinished invoices and bills being paid. 3. Greater chance of embezzlement. Who’s watching? 4 If that person gets sick or goes on vacation, who will take care of things? If you’re not sure where to start call us at 716-908-7801.
4. Pricing your services wrong: This is a difficult task regardless of your industry. Things to be considered when pricing: 1. Cost of materials 2. Cost of labor 3. Cost of Vehicles & Vehicle maintenance 4. Cost of Insurance 5. Operating expenses-office help, office expenses advert etc. Contact a professional to help you with this.
5. Credit card debt:It is so easy now to go online and purchase items and to pay it with a credit card or debit card and forget about it. Are you posting these monthly so you know what to pay? If you are not posting these on a regular basis you could be losing out on the full tax value of the deduction.
6. Not planning for Upcoming Tax Obligations: Not planning for your upcoming tax bill can be disastrous. You should be making Estimated tax payments, sales tax payments and payroll payments. By not paying these taxes in a timely manner you could be subjecting your business to audits and interest and penalties. If you own a plumbing business in the United States and you are seeking higher profits in your business while requiring bookkeeping services, we need to setup an initial “get to know each other call.”