The #1 Mistake Small Businesses Make with Their Bookkeeping (and How to Fix It)
Bookkeeping can feel like a daunting task for many small business owners. Between managing day-to-day operations, serving customers, and driving growth, bookkeeping often takes a backseat.
Unfortunately, neglecting your bookkeeping can lead to one of the most common and costly mistakes: not keeping it up-to-date.
Here’s why this mistake is so prevalent, how it impacts your business, and most importantly, what you can do to fix it.
Why Do Business Owners Fall Behind?
Small business owners often struggle to stay on top of their books due to time constraints, a lack of accounting knowledge, or feeling overwhelmed by a backlog. When bookkeeping is repeatedly postponed, it becomes harder to catch up, leading to a cycle of procrastination.
Not knowing how or where to record something can be frustrating and cause newer transactions to backup in the workflow leaving you even more frustrated.
Business owners have a LOT to juggle, and this is a very common task that gets swept under the rug (understandably so!).
The Consequences of Falling Behind
Neglecting your bookkeeping has serious repercussions. Without regular updates, your financial data may become inaccurate, leading to poor decision-making and missed growth opportunities.
You could also overlook valuable tax deductions, face IRS penalties for late or incorrect filings, and encounter cash flow problems due to poor tracking of incoming and outgoing money.
How to Fix It
Fixing this mistake starts with building consistent habits.
Set aside dedicated time each week to update your records. Picking one day a week to spend two hours on your bookkeeping should be sufficient for most small businesses. A little often is better than a lot all at once!
Plan for one day a month to review important reports (giving you a financial picture of your business). WRITE IT ON YOUR CALENDAR, and don’t compromise that time! Accounting software, such as QuickBooks Online or Xero, can streamline this process by automating tasks and generating reports.
Upload receipts and categorize your expenses as you make purchases. There’s nothing more time consuming than tracking down expenses later, and forgetting what’s what! Take a snapshot of your receipt in the QuickBooks app and match your expenses via mobile as they happen.
Outsource to a professional bookkeeper or accountant which provides peace of mind and ensures everything runs smoothly.
For more intensive needs, consider working with Zero Grid for a one-on-one VIP Day to address specific challenges or implement efficient systems. Regular attention to your books ensures your financial records are accurate and your business is set up for success, and sometimes it’s just not possible with the busy schedule of a small business owner to take on the role of accountant!
The Bottom Line
Keeping your bookkeeping up-to-date is a foundational practice that can save your business from costly mistakes and stress. Whether you handle it yourself or work with a professional, accurate financial records empower you to make informed decisions and stay compliant.
If you’re feeling overwhelmed or don’t know where to start, we can help. Our End of Year Catch-Up Service is designed to get your books back on track quickly and efficiently. Or, consider our VIP Day offering for a focused session to tackle your bookkeeping challenges.
Ready to take control of your bookkeeping and outsource it for good? Let’s talk!
