– BY MADDIE CRAIG | 2024
There’s something about handling your own bookkeeping that can feel a little... spooky. Especially when you realize that certain common mistakes might be creeping into your accounts without you even noticing! 🫣
If you’ve ever thought your books looked a little off, one of these errors might be the culprit. Let’s dive into some of the most common DIY bookkeeping mistakes that might be lurking in your financial records.
1. Using "Adjusting" Entries to Force Account Reconciliation
We get it—reconciling accounts can be frustrating. Sometimes, things just don't seem to add up, and in a rush to get things balanced, people will use "adjusting" entries to make it work. But beware! This quick fix can cause problems down the road, making it hard to track where your numbers are coming from or why they don’t quite match reality. It’s like putting a band-aid on a wound that needs stitches—temporary, but not a real solution.
2. Posting Payroll Directly to Expenses (Without Splitting Deductions/Taxes)
Payroll is one of the trickiest parts of bookkeeping, and one common mistake is entering payroll directly as a lump sum expense. While this might seem like an easy way to handle it, skipping over the details can come back to haunt you. Payroll should always be broken down into gross wages, taxes, and employee deductions. Failing to do so means you’re missing critical data about where your money is going—and trust us, you don’t want that kind of ghost hanging around your books!
3. Forgetting to Leave Memos for Unusual or Unclear Expenses
Ever had an expense pop up in your books that, months later, you have no clue what it was for? If you don’t leave a memo, that’s exactly what can happen. It might seem like overkill when you're entering every expense, but those little notes can be lifesavers when you're trying to explain a weird charge later. A simple explanation in the memo section can save you a ton of confusion down the road—think of it as leaving breadcrumbs to follow when things get foggy.
4. Mixing Personal and Business Expenses
This one’s a classic horror story: entering personal expenses or owner distributions as business expenses. While it might seem innocent enough at the moment, this can seriously mess up your financial records. You should keep personal and business finances separate. Mixing them can not only create confusion but could also cause major issues if you’re ever audited.
If any of these mistakes sound familiar, don’t panic—you’re not alone! These are common missteps that can happen to anyone trying to handle their own bookkeeping.
The good news? You don’t have to deal with these scary problems on your own.
Hiring a professional (like us!) can help clean up those financial cobwebs and get your books back in tip-top shape. 💪
Whether it’s fixing a few issues or taking the entire bookkeeping process off your hands, we’ve got you covered. Shoot us a message, and let’s take the fear out of managing your finances! 🙌🏻
Meet The Author
Maddie Craig is the founder of Blue Cypher Bookkeeping, a detail-oriented bookkeeper, and definitely a “numbers nerd”! She is passionate about helping organizations understand the full story of their financials and using it to make more confident decisions and grow strategically. She has experience working with a wide array of clients, including small businesses and non-profit organizations. When not crunching numbers, she and her husband enjoy traveling, being active in the community, and sharing their love for good food with friends and family.
Comments