Proper bookkeeping is essential to the smooth operation of any business. But with the daily pressures and stresses of managing a commercial enterprise, these tasks sometimes take a backseat and mistakes are made. To help remedy this, below are three common errors and how to avoid them.

Bookkeeping Mishaps to Avoid

1. Poor Recordkeeping

Every business needs a paper trail, whether in a digitalized form or one that utilizes actual paper and ink. Without these records, you do not have an accurate idea of how much money the business is taking in and paying out, gaining and losing. Keep all paperwork, no matter how trivial it might seem, and make an effort to keep it organized. Sales receipts, invoices, purchase orders, tax documents, and other records should all be filed in the appropriate folders and securely stored.

2. Vague or Missing Expense Reports

For many businesses, tracking business-related expenses is a crucial part of effective bookkeeping—and not losing your shirt come tax time. When completing expense reports, be as comprehensive as possible. Was it for a business trip, and if so, what was the purpose of the trip? Was it for office supplies, and if so, which ones? Was it for a business lunch, and if so, who was the meeting with? The more information, the more easily categorized the deduction.

3. Doing It on Your Own

Some enterprises, especially small businesses, want to tackle their bookkeeping on their own, but it is a risk on the part of any business owner. An accountant or bookkeeper will keep track of your finances, handle all tax-related matters, and enhance your business's overall money management. Don't be under the impression that hiring a bookkeeper is in any way ceding control; the relationship is a cooperative and professional one and you will be an even more empowered part of your business's finances and future.

Running a business is hard work and bookkeeping mistakes like these can happen surprisingly easily. Let the accountants at Lee & Smith help. For nearly 30 years, they have been providing clients in the Texarkana area with everything from business consulting and payroll to tax preparation and filing. To schedule an appointment or receive full disclosure and information on this topic, call (903) 832-4339, visit them online, or contact them on Facebook or Twitter.