As a business owner, you take on a number of different roles, which could include marketing associate, customer service specialist, and accountant. Proper bookkeeping leaves little room for error, and luckily there are ways to minimize the chances of financial errors and allow yourself more time to focus on other tasks. Whether you’re a business owner or someone who needs assistance with their finances, you should always consider hiring a professional bookkeeper to keep everything in order. Until then, here are four common bookkeeping mistakes to avoid.

Don’t Make These 4 Bookkeeping Errors

1. Poor Record Keeping

Create an organizational system for all of your records, including receipts, invoices, and financial statements. Every month, sort through any paperwork that has piled up and file them into the proper category. Taxes will be easier to complete, and you can maximize a tax return by having proper documentation of expenses.

2. Incorrect Expense Categorization

Expense and income categorization is confusing, so your finances and taxes may be incorrect if you don’t know the basics of bookkeeping. This is where professional bookkeeping services come in handy. A bookkeeper stays updated on how tax laws apply to different categories of income and expenses. In the end, your taxes will be more accurate, lessening your chances of being audited by the IRS.

3. Not Keeping Physical Copies of Records

Since you rely on technology to keep track of your finances, it’s important to have hard copies of any financial documents. In the event data is lost, you’ll have these copies to help you recover and ensure your business is less susceptible to losing money.

4. Lacking Communication

If you do have a professional bookkeeper, you should have an open and honest line of communication with them. Provide them with the most accurate information so you stay financially healthy and prevent problems with the IRS. Your bookkeeper should also be aware of your business goals along with any problems you have so they can make suggestions to help you achieve maximize growth and cash flow.

Do you need assistance with improving your business or personal finances? The team at Wilson, Rea, Beckel & Associates CPAs LLC has been providing a wide range of business and financial services to those in Pagosa Springs, CO, since 2010. In addition to bookkeeping, they also offer tax return preparation, small business accounting, and personal financial planning. Their team is dedicated to providing quality and personalized financial guidance to both businesses and individuals. Give them a call at (970) 731-1040 or visit their website to learn more about their services.