Running a small business is a significant responsibility. While there are many areas to oversee, your finances are by far the most important. Making bookkeeping errors is not unusual, but identifying common areas where you might experience problems could help you avoid them in the future. Here are some of the potential issues to keep in mind.

What Are Some Common Bookkeeping Mistakes?

1. Not Keeping Track of Receipts

Tax season can cause headaches for small business owners. You might be able to ease some of your potential burdens by keeping all of your receipts, even for purchases that may seem relatively minor. They can add up through the year, providing you with a substantial deduction when it comes time to do your taxes.

2. Neglecting to Back Up Data

Don’t trust that everything you save digitally will actually remain there indefinitely. Going the paperless route may save trees, but it can also cause trouble if you don’t have a verifiable record of certain expenses. Responsible bookkeeping involves keeping paper documentation as a backup so that you can prove that you have the information in the event of a technical failure that renders your online data irretrievable.

3. Not Classifying Your Staff Properly

Whether you have full-time staff or independent contractors who perform duties for you, it’s important to classify them for what they are when completing employee paperwork. Classification is a vital part of bookkeeping because it establishes the basics of your taxes, including paying income tax and paying Social Security and Medicare taxes.

You don’t typically have to make such payments or withhold them if you’re working with an independent contractor since they’re responsible for their own self-employment taxes. The distinction can save you from paying unexpected penalties during tax season.
 

Properly managing your small business is vital to your success. Let the team at Beacon Virtual Assistants LLC in St. Charles, MO, assist you every step of the way with your bookkeeping needs. They can help with important tasks like data entry and business management, allowing you to focus your attention and energy on other areas. Visit the website to find out how they can help your business thrive, or call (314) 650-9784 to speak with a representative.