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Accounting errors will happen from time to time, but many common accounting mistakes can be avoided with proper planning and preparation. Here are the top seven accounting mistakes that should be paid more attention to.
1. Not knowing your true cash balance: Due to things like automatic payments and bank charges, money that appears in your cash drawer and your checking account may already be spent.
2. Mistaking profits for cash: When you have a lot of credit sales, your company can post big profits without seeing any cash.
3. Paying bills too soon: If your vendors give you thirty days to pay them, take it. Unless you get a discount for paying early, paying your bills only when they.re due improves your company.s cash flow.
4. Avoiding bookkeeping tasks: Not recording and posting transactions regularly leaves you with a mountain of bookkeeping to deal with in the end.
5. Paying accidental dividends: Every time a corporation owner takes money out of his business, it counts as a dividend. That can lead to a bigger personal income-tax bill.
6. Not keeping personal finances separate from business: Mixing up business and personal money can cause bookkeeping and legal problems.
7. Setting prices too low: Know your costs before you set product or service prices, or you run the risk of losing money on every sale. A simple break-even analysis can help you set prices at a profitable level.
1. Accounting mistakes cannot be avoided. 回答
2. With a lot of credit sales, your company may have no cash at hand. 回答
3. It is recommended not to pay bills too soon. 回答
4. Business money and personal money can be mixed up. 回答
5. Try your best to know your costs before you set product or service prices. 回答
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