As a small business owner or consultant, it’s natural to want to save money where you can, and that often includes doing your own bookkeeping. But while DIY bookkeeping seems like a good way to cut costs, it can actually end up being more expensive in the long run—especially when costly mistakes are made.
Here are the top 4 DIY bookkeeping mistakes I see all the time, and how they can impact your business.
1. Missing IRD Deadlines
Business owners are often juggling multiple roles, and it’s easy for tax deadlines to slip through the cracks. Missing these deadlines can result in fines and interest charges from the IRD, not to mention the stress of catching up. The solution? Stay organised with a calendar that reminds you of upcoming dates, or even better—let a professional take care of it.
2. Incorrect Coding
If you're not a trained bookkeeper, you might misclassify expenses or income. These mistakes might seem small, but they can mess up your financial reports. And when tax time rolls around, incorrect coding can lead to compliance issues or even inaccurate tax filings. An experienced bookkeeper will ensure that your accounts are coded correctly from the start, giving you a clearer picture of your financial health.
3. Not Capturing Receipts
Receipts may seem trivial, but they are your best defense in the event of an audit. Without them, your deductions might not be accepted, meaning you'll owe more taxes than necessary. Keep track of every expense, whether it's a lunch with a client or an online subscription. A professional bookkeeper can help you stay organised with receipt management, ensuring no potential deduction is left on the table.
4. Not Reconciling Accounts Regularly
When you don’t reconcile your accounts, it’s easy to overlook discrepancies or even fraud. Regular reconciliations ensure that your financial statements match your actual bank balances, helping you catch errors early and avoid future problems. This simple but crucial step is often neglected when business owners try to do it all themselves.
While DIY bookkeeping might seem like a good idea at first, the risks of mistakes are high, and they can cost you time, money, and peace of mind. A professional bookkeeper will help you avoid these common pitfalls, keep your financials accurate, and give you more time to focus on growing your business.
If you’ve been handling your own books and recognise any of these mistakes, it might be time to get some help. Reach out today, and let’s chat about how Your A Team can take bookkeeping off your plate so you can focus on what really matters—building your business.
Your business deserves accurate, professional bookkeeping. Don’t let small mistakes hurt your bottom line. Let Your A Team help you get it right from the start.
