Top Bookkeeping Mistakes to Avoid

Hello its Rebekah – Your bookkeeper! Bookkeeping is the backbone of every business. Accurate records help you understand your company’s financial health, prepare for taxes, and make informed decisions. But many small business owners — and even growing companies — fall into common bookkeeping traps that can cost time, money, and peace of mind.

Here are some of the top bookkeeping mistakes to avoid:

1. Mixing Personal and Business Finances

One of the biggest mistakes business owners make is using the same bank account or credit card for both personal and business expenses. This makes it nearly impossible to track true business costs, complicates tax preparation, and could even create legal issues.

Tip: Open a dedicated business checking account and credit card. Keep all business transactions separate. Use Owner Draws for cash allocated to the owner and Personal Expense when the business account is use for non-business related purposes.

2. Not Reconciling Accounts Regularly

If you’re not reconciling your bank and credit card accounts each month, you might miss errors, duplicate transactions, or even fraudulent charges.

Tip: Schedule a monthly reconciliation to ensure your books match your bank statements. Click the link below for my free Reconciliation Tracker!

Reconciliation Tracker FREE.xlsx

Download XLSX • 32KB

3. Poor Record Keeping of Receipts and Invoices

Lost receipts and missing invoices can lead to unclaimed deductions or inaccurate financial reports.  Great tool is a pen – make notes on your receipts to help remind why you spent this money – office supplies, business meeting, meet & greet with a client!

Tip: Use digital tools (like QuickBooks, Hubdoc, ShoeBoxed or Expensify) to capture receipts and organize invoices in real time. Or if you’re like me and over apps, just snap a photo with your phone and email it you your bookkeeper!

4. Misclassifying Expenses

Putting expenses into the wrong category can distort your financial reports and affect your tax deductions.

Tip: Learn the basic expense categories, or work with a bookkeeper who can ensure accurate coding.

5. Forgetting to Track Small Cash Transactions

Small purchases, like office supplies or quick vendor payments, add up — but they’re often overlooked. A petty cash account is never petty and always in style! Use this to see where you’re money is going.  Every penny counts and can highlight spending patterns within your organization.

Tip: Record every transaction, no matter how small, to get a full picture of your spending.

6. Not Following Up on Accounts Receivable

Unpaid invoices mean less cash flow, yet many businesses forget to track outstanding customer payments. Utilizing your AR system will help see how far your AR is again to know which accounts need a personal touch and follow up to get that invoice paid and money in your account!

Tip: Set reminders to follow up on overdue invoices promptly. Consistent collections keep your business financially healthy.

7. DIY Without Expert Help

Bookkeeping software has made it easier to manage finances, but relying solely on DIY without professional review can lead to costly errors.

 Tip: Partner with a bookkeeper or accountant to review your books periodically.

Final Thoughts

Avoiding these mistakes not only keeps your records clean but also gives you more time to focus on growing your business. Strong bookkeeping practices save money, reduce stress, and ensure you’re always ready for tax time.

If you’re overwhelmed by bookkeeping, outsourcing to a professional may be the best investment you make this year and you can never go wrong with Your Bookkeeper Rebekah ❤️

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