3 Common Bookkeeping Mistakes That Lead to Business Failure

3 Common Bookkeeping Mistakes That Lead to Business Failure

Operating a business successfully is as fulfilling as it is stressful. Undoubtedly, it gives immense joy and happiness to see your idea become reality, but you know it very well that it is much more than owning a company and marketing your product. Improving your product, getting your brand message across audiences, monitoring all your day to day expenses, and ensuring your business finances are in order is equally important in operating a successful business.

Needless to say, bookkeeping should be a priority for every business owner. Bookkeeping may sound ordinary and easy-going task, but it is equally tedious and demands 100% accuracy and attention. Even a small calculative mistake can also lead to unwanted consequences. If you are a new entrepreneur, then below are a few bookkeeping mistakes that you should be aware of, and they are as follow:

  1. Not Separating Business and Personal Accounts: For micro and small businesses, it is easy to predict the operational cost of the business, and you can use the same personal bank account for doing business transactions. However, when your business expands, and when audit time comes, not having a separate bank account for business and personal use can cause issues and delays. And if there is an entity that you should avoid having problems with, it is the HMRC department. Separating your personal and business expenses can help you accurately manage your books and keep a close check on your business transactions.
  2. Forgetting Sales Tax: Forgetting sales tax or missing deadlines is one of the most common mistakes of businesses in the UK. While it is common, this mistake can cause your business a considerable amount of money. This mistake can result in fines and penalties from the HMRC department that a business might not be able to accommodate. To avoid any sort of penalties, a business must understand the tax slab and other important aspects like how sales tax, or any other type of tax, works. This way you don’t neglect or forget to file aspects of your business that are non-negotiable.
  3. Not Having a Back-Up: If you are a start-up or a small business, then you might not be aware of the bookkeeping technology, and it can be quite challenging to understand while performing your business activities. If you are not tech-friendly or do not understand a program thoroughly, then there is a high chance that you would miss or delete data that is essential. If something gets deleted unknowingly, then having a backup can save you and your business. Along with a soft copy backup on your computer, try to have a physical copy of your books. In case something happens with your computer, you would be able to update your finances without having to miss too much.

Bookkeeping Services for Small Business in London

These are the 3 most common mistakes that businesses in the UK make, and if you are not confident with your bookkeeping skills, then it is advisable to opt for small business bookkeeping services in London by accountancy firms like Affinity Associates. Small business bookkeeping services can help you keep track of your business’ finances in an efficient and stress-free way.

Though it may look and sound simple, bookkeeping is a tedious task and needs expert advice; thus, only experts should be allowed to manage your books. Affinity Associates would be more than happy to keep your books for you. To learn more bookkeeping services for small businesses in London or across the UK, please contact Affinity Associates today. To schedule a free consultation for small business bookkeeping services, please give us a call at +44 20 8903 2077