10 Bookkeeping Mistakes Small Business Owners Make — and Howto Avoid Them
By Pennies Count LLC
Upenda Danridge, M.S. Forensic Accounting
Introduction
Managing your business finances doesn’t have to bestressful. This guide highlights the most common bookkeeping mistakes small
business owners make — and gives you simple steps to avoid them.
1. Mixing Personal and Business Finances
The Problem: Blurred lines make accurate trackingimpossible.
Avoid It: Use a dedicated business bank account for alltransactions.
2. Waiting Too Long to Update the Books
The Problem: Delays lead to errors and tax‑timechaos.
Avoid It: Set a weekly bookkeeping routine.
3. Not Reconciling Accounts
The Problem: Errors and fraud go unnoticed.
Avoid It: Reconcile bank and credit card accounts
4. Misclassifying Expenses
The Problem: Incorrect categories distort financial reports.
Avoid It: Use a consistent chart of accounts.
5. Forgetting to Track Cash Transactions
The Problem: Missing entries create gaps in your books.
Avoid It: Log cash purchases immediately.
6. Not Keeping Receipts
The Problem: Missing documentation causes issues during taxprep.
Avoid It: Store digital copies — scanned receipts areacceptable.
7. Ignoring Accounts Receivable
The Problem: Unpaid invoices hurt cash flow.
Avoid It: Review outstanding invoices weekly.
8. Not Reviewing Financial Reports
The Problem: Missed trends and blind spots.
Avoid It: Review your P&L and balance sheet monthly.
9. DIY Bookkeeping Without Support
The Problem: Guesswork leads to costly mistakes.
Avoid It: Get periodic check‑ins or a professional review.
10. Not Preparing for Tax Season Early
The Problem: Last‑minute scrambling and misseddeductions.
Avoid It: Keep your books updated year‑round.
Conclusion
Avoiding these mistakes will save you time, reduce stress,and give you a clearer picture of your business’s financial health. If you want support keeping your books accurate, organized, and audit‑ready! Pennies Count is here to help, signup for free consultation TODAY!