Common Mistakes Beginner Accountants Make, And How to Avoid Them!

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Here’s the most unsettling factoid about accountancy—it’s not just a concern of tax workers and auditors. It’s an issue that affects everyone. If one keeps ledgers and a bookkeeping system then he/she has accounts to maintain. Whether a person takes on the reins or outsources the books to an accountant, the fact remains everyone deals with numbers and everyone is capable of filing an erroneous transaction.

Accounting mistakes are not only common among company owners and bookkeepers, but even CPAs. The U.S. Small Business Administration states that half of all new businesses fail within the first five years. The primary culprit is poor financial direction or management. For beginners in accounting, mistakes can be disastrous since the tax help company is supposed to be the “saving grace” of other companies—the professionals who are promising to protect them from penalties and illegalities.

What Are the Most Frequent Accounting Mistakes?

One common error is not asking the client enough questions, even when in doubt. Perhaps accountants want to appear educated and all-knowing, and the pressure is even worse when you are in a group meeting and don’t want to be the last one raising his hand. Still, feigning knowledge when you are missing part of the quotient always exacerbates the situation, multiplying the original problem.

Spending Too Much Time on What Should Be Automated Processes

New accountants may be tempted to perform calculations manually, or may not want to take the time to learn automated features on a software program. This is a mistake because automated math, inventory and invoicing saves you time. The illusion that you can do it faster on your own is only going to complicate matters.

Forgetting the Little Things in Accounting Mistakes

Company heads are not the only ones who forget. Among the most forgotten accountant rules are: forgetting to track reimbursable expenses, not saving low amount receipts, not properly separating contractors, freelancers, consultants and employees, and not paying attention to petty cash items.

Little or No Communication

There is no real purpose to bookkeeping and accounting if the “numbers man” doesn’t talk to management and keep the owner(s) apprised of what’s happening. Even paying someone a small bonus, but not documenting the amount has been known to waste hours on end in reconciliation.

Not Keeping Up with the Times

Failing to keep up with changing industry standards is critical because company owners are counting on their accountants and bookkeepers to keep up to date with the law, as it constantly changes and everyone knows this. The failure to implement new industry laws and prerequisites could ruin a company or an accounting firm in a hurry. An accountant and company head alike can search the IRS website for new changes if there is any doubt.

By simply being aware of new regulations, you can improve your image and avoid penalties. Don’t let simple errors be a major defect in your otherwise perfect business model. A little attention paid to proper procedure can go a long with in protecting your business.