Avoid the Frights: Common Bookkeeping Mistakes That Can Haunt Your Business
Suffering ramifications from poor bookkeeping is nothing short of a Halloween nightmare. Making sure books are in order needs to be a top priority when it comes to running a business. If not, there could be scary consequences. Here are three common mistakes people make regarding bookkeeping and why you have no reason to be afraid.
Failing to properly classify employees: Often, businesses will bring in reinforcements to help when they are unable, or unqualified, to fulfill a task themselves. These individuals are referred to as consultants, freelancers, or independent contractors. Determining who is a regular staff member and who is a third-party hire is crucial when it comes to bookkeeping. Misclassifying a worker can lead to consequences with the IRS and lawsuits. “An independent contractor is any worker you bring on board to deliver a specific result and determines on his or her own terms how to achieve that result. On the other hand, an employee is a worker who completes the tasks you give to him or her in the timeframe and manner specified by you.” Be sure to understand the role of each individual who works with or for you.
Not having a paper backup: Though we heavily rely on technology, having a backup is crucial, especially for a large authority like the IRS. If technology fails, you need to have a physical paper trail of your information. Always keep secure copies of receipts, tax reports, financial statements, payroll information, and other important documents for easy reference. The rule of thumb is to keep documents for at least seven years before considering disposing of them. A locking filing cabinet is an easy way to store and organize all documents accordingly.
Trying to complete books yourself: Let’s face it, we all want to have a hand in every part of our business. Realistically, it is often not wise to attempt to complete or manage everything yourself. With something as important as bookkeeping, you do not want to fall behind or make a mistake. If you really want to set your business up for success and stay out of legal trouble, consider hiring an expert in the field of bookkeeping.
Sound terrifying? It doesn’t have to be. AMJ Bookkeeping has been completing these tasks on behalf of small business owners for eleven years. If you are looking for a trusted source for bookkeeping that happens to be listed in the Top 10 Best Accountants on Angie’s List and the Top 19 Best Bookkeepers on Expertise.com for 2019, contact us at AMJ Bookkeeping today.
Source: https://www.score.org/resource/article/top-10-bookkeeping-mistakes-small-businesses
