Bookkeeping is one of the most important but also one of the most challenging parts of running a business.
But many small businesses still do their bookkeeping manually, sometimes leading to mistakes.
Let’s look at some of the most common bookkeeping mistakes and how business owners and managers can fix them with the bookkeeper software from Zil Money.
Key Lessons
- Bookkeeping and its Importance.
- Bookkeeping vs Accounting.
- Biggest bookkeeping mistakes small businesses make.
- How bookkeeper software helps you stop making mistakes in business.
- Use Zil Money to improve business operations.
Bookkeeping and Its Importance
Bookkeeping is writing down your business’s daily financial transactions in a way that makes sense. It can also mean the different ways that companies can keep records. Bookkeeping is an integral part of accounting for more than one reason.
When you keep records of transactions up-to-date, you can make accurate financial reports that can be used to measure how well your business is doing. In the case of a tax audit, having detailed records will also help.
Bookkeeping vs Accounting
Bookkeeping and accounting are different. However, bookkeeping is an essential aspect of accounting, which includes all processes for recording business financial transactions.
Bookkeeping examples:
- Processing payroll.
- Posting credits and debits
- Preparing financial statement
- Recording financial transactions
On the other hand, accounting tasks include:
- Filing tax returns
- Performing tax audits
- Preparing and adjusting entries
- Analyzing and reviewing business financial statements
Biggest Mistakes to Avoid While Doing Bookkeeping
Disorganized chart of accounts – A chart of accounts can be a handy tool, but for many small businesses, it makes bookkeeping harder instead of easier.
Using personal funds for business expenses – When it seems convenient, many small business owners use personal funds to cover business expenses. But it’s risky. If the business owner doesn’t keep records, it makes tracking cash flow difficult. If the business fails, it could affect the owner’s finances.
Not reviewing financial statements – Profit-and-loss and cash flow statements reveal a business’s health. They assist owners and managers in making strategic decisions. Business owners and managers should generate and analyze financial reports quarterly or more often, depending on the business.
Sales tax – As a small business owner, you must take sales tax seriously. The government can fine you if you don’t pay or collect taxes on time.
How Bookkeeper Software Helps You Stop Making Mistakes in Business
- Automated data entry: Bookkeeping software automatically inputs and organizes financial data, reducing the likelihood of human error.
- Error checking: Many bookkeeping software programs have built-in error checking and validation to catch mistakes before they become a problem.
- Real-time reporting: Bookkeeping software provides real-time financial reports, allowing business owners to quickly identify and correct errors.
- Integration with other systems: Bookkeeping software can often be integrated with other business systems, such as accounting software, to ensure data consistency and accuracy.
- Audit trail: Bookkeeping software typically keeps an audit trail of all financial transactions, making it easy to track down and correct any errors that may occur.
Use Zil Money to Improve Business Operations
Zil Money, an alternative to bookkeeper software, is a cloud-based program that lets you automate tedious accounting and bookkeeping tasks, saving you hours of work every day. With the help of Zil Money, you can automate bookkeeping and accounting, and payroll management; you can also print and customize checks, manage cash transactions, balance your bank account, and print checks. In addition, our platform lets you access your data from anywhere, making it a valuable tool for anyone looking for the best finance management platform for all your business purpose.
Good bookkeeping is at the core of any successful business, so stop making mistakes by manually doing the task. Instead, use our platform and make this task lighter. Bookkeeper is a one-stop shop for small businesses accounting, bookkeeping, payroll, bill payment, and tax needs. Our platform, Zil Money, is a safe and easy-to-use on-demand online platform for moving money and managing finances. So, why wait? Start using our platform and make bookkeeping easy, along with other benefits.
