5 Common Mistakes in Accounting Made by New Entrepreneurs

John McDonald May 30, 2018 Comments Off on 5 Common Mistakes in Accounting Made by New Entrepreneurs
5 Common Mistakes in Accounting Made by New Entrepreneurs

 

One of the most complex tasks when managing a new business is to keep a good accounting system. When it comes to management, we might be fulfilling all obligations, but in the specific subject of accounting, we usually do not know how it works properly, and then there are the financial obligations that we must comply with to satisfy the corresponding authorities.

In this post, central London accountants share some of the most common mistakes made by entrepreneurs with their new businesses, and how these can be avoided by consulting an expert on how to manage your accounting, implement good practices, and maintain the accurate records that you need to avoid sanctions and comply with the law.

  1. Not knowing the dates of compliance

To be up to date in accounting, it is necessary to know the rules on which tax obligations are based, and how these are governed. We recommend you consult with a professional accountant to know how the exact tax situation your business will face according to the annual income.

  1. To deduct it, it must be presented

It is important to justify all the expenses generated by and for the company, as well as to know exactly which are those that can be deducted, and which cannot. Many times, some deductible expenses are not taken into account, which in the long run could become important sums of money and unnecessary expenses. These should be analysed to ascertain if they are necessary or you should eliminate them.

  1. Electronic invoices

In the same way as we must have control of our expenses, we must take care that the invoices that we issue are correctly issued, including both the relevant and required data of our company and that of our clients, so that the income and expenses are correctly checked.

  1. Not keeping accounts up to date

Not having updated accounting information prevents you from having a complete and clear picture about the financial situation of your company. Having bad accounting practices can lead you to make hasty decisions. Likewise, having up-to-date accounting helps a lot at the time of submitting it electronically to the tax authority, which will save a lot of time in complying with your obligations as an entrepreneur.

  1. Not taking advantage of technology

It is normal that your entrepreneurial spirit leads you to want to be self-taught and this causes you to develop multiple activities within your business. But you cannot do everything! The ideal is to seek the insight of an expert who can bring your accounting up to date, as well as update you with the most appropriate accounting software, since as your business grows, this type of task becomes extremely complex for those who know only the basics.

These are the most common errors committed by new entrepreneurs. We recommend you seek advice from a professional accountant in order to avoid these types of failures that may cause serious problems for your company.

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