Making profits and fiscal success is the aim of any business. Hence, apart from paying attention to your core business, you should also maintain records of all financial transactions, including purchases, sales, inventory of assets, raw material, finished goods, vehicles, cash balances, and loans and other liabilities.
In short, you need a qualified and experienced accountant, whether in-house or outsourced, to handle accounting in your office. Many firms in the country are ready to help small to medium enterprises with their accounting needs.
There are common mistakes in accounting, though. Femia and Associates Accountants compiled several tips to enlighten your new hire. Consider having them review the following to avoid major disaster:
- You need to balance your accounts, because even if you use software, it cannot balance the books by itself. You have to enter every transaction accurately, whether it is manual or software-based, such as a spreadsheet.
- Ensure that the customers pay for all the invoices in time. Make a due statement for every customer each month and check it before mailing. Settle all disputed invoice issues quickly.
- Check all purchase bills accurately before settling. Check the amount, acknowledgment receipts, pricing, correct tax computations, etc. Computers create the billing, but humans enter the data so there is still room for error.
- Similarly, check your raw material suppliers’ details on a monthly basis. You should not miss out any invoice or have duplicate entries in the books. Enter payments to suppliers correctly.
- Likewise, check the details of sales invoices. When you set up business, decide what you consider a successful transaction. For example, if you operate a bakery, then selling baked pastries is a successful transaction.
- Similarly, inventory, record foreign currencies, cash balances, and tax details accurately. Comply with all legal requirements while accounting.
With a systematic approach, it is possible to avoid any kind of errors. The above hardly covers the numbers of mistakes possible, but serves only to give some idea of the kind of errors that can happen. Set up good systems and maintain it on a routine basis.