If you run a small business, it can be difficult to anticipate your company’s needs when it comes to keeping records and filing your taxes. When companies don’t work with a dedicated business accountant, they tend to make several key mistakes. Here are four of the most common accounting errors you should avoid.

How to Avoid Common Accounting Pitfalls

1. Failing to Set Up a Strong Accounting Strategy

Make sure to develop a strategy for tracking expenses, purchases, and income on a daily basis. Without adhering to a strict procedure, it will be all too easy to miss payments or charges, or forget to account for sales and purchases. Begin by creating lists of vendors, customers, and other important contacts. Keeping a database with their contact information and details will make it easier to track new transactions and improve the accuracy of your day-to-day records.

2. Working Without a Clear Budget

Take care when developing a budget for your business. It’s important to start with a realistic and actionable budget so that your business can balance profits against expenses. Otherwise, it will be tempting to amend your budget to reflect factors you failed to anticipate, likely leading to additional expenses. Apply this strategy to any individual project your company works with, as well as to your business as a whole.

3. Spending Profits Before They’re Available

Wait for any sale or transaction to be fulfilled before viewing the sum as actual income. A sale may take several months to complete, or a client may back out at the last minute due to a financial or legal issue. By viewing these sales as separate from your profits until the money is actually in your company’s account, you’ll avoid the possibility of spending money you don’t have.

4. Neglecting to Record Small Transactions

Petty cash transactions add up over time. While it may not seem important to keep track of all the stationery or beverage purchases being made across the office, you may be surprised at the total amount of money spent at the end of the year. Keep track of all of your business’s petty cash transactions to obtain a more realistic idea of your expenses, which you can incorporate in future budgets.

To guarantee that your business’s accounting and tax filing is handled without a hitch, get in touch with Sharrard, McGee & Co., PA. With offices in Greensboro and High Point, NC, they offer professional accounting services that can help you keep tighter control over your business transactions. Established in 1976, their accounting team keeps up to date with the latest technology and tax laws to provide the highest quality of service to every client. To schedule a free initial consultation and learn what they can do for your business, visit them online or call (336) 272-9777.