Whether you do it yourself or hire a professional for bookkeeping services, a little mistake can cost you big. From forgetting to carry the one to the little things that add up, just how much are they costing you?
1. Small Time Bookkeeping
$75 may be the magic number, but you could be losing big in your small business if you are 
discarding these receipts and not counting them. The IRS doesn’t require that businesses save those receipts, but they are solid proof of the deductions you claim. For small purchases from toilet paper for your office bathroom to stamps to other minutiae, they can add up to hundreds in deductions.
Bookkeeping Tip: Keep a separate folder just for your small receipts each year AND a spreadsheet to see how much they add up to.
2. Not Tracking Expenses You Can be Reimbursed For
It happens to all of us: we’re out and have forgotten our business credit card or are shopping for personal stuff and decide to lump some stuff for your business as well. However, this can also add up big just like they above, only much faster.
Bookkeeping Tip: Even if you don’t have your business credit card, buy your personal and business items separately and save the receipt. Even if you pay for it with your personal card, cash, or other means, you can still be reimbursed.
3. Failure to Classify Employees
You probably know the difference between a regular employee and a freelancer, but do you know there is a difference between consultants, independent contractors, and many other kinds of employees? Given that you the employer is not responsible for any payroll taxes for these types of independent contractors, it can be a benefit or a curse if you’ve improperly classified them.
Bookkeeping Tip: Watch this great video for a simple guide on who is who.
4. A Shoebox is Not Reliable
It’s only good for holding shoes, and if it holds any receipts, pay stubs, or other important documents, you will regret it when it’s time to go through it all. The avalanche that will await you when you pull off the top will show you why this is a huge mistake. As a professional bookkeeper, I can tell you: I hate shoeboxes.
Bookkeeping Tip: There are many expandable files out there at any office supply store that are inexpensive and handy. Worst case scenario: paper clip the receipts and such together by type, date, etc.
5. Wrong Software for The Wrong Job
There are tons of different bookkeeping software that can keep track of everything including all things income and expenses. However, each business and individual is different, and there really is no blanket solution to bookkeeping software. Think of what you need before you buy something, and remember that Excel is great for spreadsheets, but no so much with overall bookkeeping.
Bookkeeping Tip: Read third party reviews of any software before you buy or even try, as some trial bookkeeping software can spam your computer and drive you nuts.
6. Reconciling Regrets
Reconciling, aka the task of ensuring that all bank and credit card statements match up can be a painful, fruitless task. Until it isn’t done and a mistake is made. Just having one transaction that is off can throw your entire bookkeeping operation off track. This is why it’s essential to reconcile records each month.
Bookkeeping Tip: If you can, have only one bank account and one credit card for your business, use them ONLY for business, and reconciling can be done easily by matching your statements each month.
7. Doing it Yourself
Doing your own bookkeeping can be fine if you are a one person operation with a few, regular clients. Anything beyond that can have you spending valuable time with bookkeeping duties, rather than seeking out and satisfying clients. And having a secretary or family member do your books can be even worse given that you as the owner are responsible not your employees – who may or may not have the necessary skills.
Bookkeeping Tip: Just like software, shop around for bookkeepers and bookkeeping services, get their rates, and read reviews before deciding on one.
Bookkeeping in Houston
And if you are in need of expert bookkeeping services in Houston or the surrounding area, please contact me.