This blog post is about the best practices to prevent errors in bookkeeping. It will cover few common mistakes that people make when it comes to bookkeeping and how you can avoid them.
Whether you are a small business owner or an accountant, this information will be helpful for you!
Mistake #1: Not keeping up with changes in the tax laws. For example, when it comes to filing your taxes and paying estimated payments for the year, you need to be aware of any updates made by Congress every year, or else you could end up owing more than necessary!
Remember, anytime there are new reforms passed by Congress, make sure that you take note and adjust accordingly to avoid missing anything. Due dates may change slightly, but if they don’t, then at least you won’t have additional penalties from underpayments!
Mistake #2: Not understanding the consequences of a change in accounting methods. Going from a cash-basis to an accrual basis may affect your taxes and require additional information for tax purposes.
Be sure that you know what each process entails before making any changes!
If you don’t understand the different types of bookkeeping, it’s always best practice to use one system until you’ve mastered it so as not to make mistakes. Due diligence is key!!
Mistake #3: Being unclear about which ledger or account needs posting transactions first – debit or credit side? Understanding when debits and credits should be posted will help prevent you from posting a transaction that needs to be reversed.
Understanding how categories work in accounting can help you have an easier time keeping track of your books, so watch this video on the topic!
To prevent mistakes in bookkeeping, always make sure that all transactions are tracked and recorded accordingly- read more about the best practice here!
If you want to avoid these errors, you can always go to Online Services like QuickBooks error support!