Bookkeeping is not for the faint of heart. There seem to be so many ways to mess up your financial records without knowing it. But don’t worry, a lot of these mistakes are common, and, most importantly, they are correctable if they are caught early enough. In this blog post, we will explore four common bookkeeping mistakes and, more importantly, how LedgerDocs can be your savior, helping you to avoid or fix these pitfalls.
Failing to Record Small Expenses
The Mistake: Business owners often have a lot on their plate and sometimes it feels like keeping track of their small expenses, such as office supplies or occasional lunches, is more trouble than it is worth. It is tempting for these individuals to think, “Is it worth my effort to meticulously record every minor transaction?” The answer, however, is a resounding “yes.” Failing to record these transactions, over a long period, can erode the accuracy of your books.
How LedgerDocs Can Help: At LedgerDocs we hear you. The traditional method of receipt management is too tedious and time-consuming. Gathering and preserving every tiny receipt for manual entry often consumes more time and effort than it seems to be worth. That is why we have created a process that simplifies expense tracking. Using our app on your smartphone, you can snap a picture of any expense receipt, add any notes or tags, for your bookkeeper’s reference, directly to the receipt, categorize the receipt, and upload it onto the document management platform. Once your receipt is in the platform, you can use our advanced OCR feature to automatically extract data from your receipt and post it directly to your accounting software. Saving yourself hours a month of manual data entry.
Mixing Personal and Business Finances
The Mistake: A common mistake many people, especially small business owners, make is using the same accounts for both their business and their personal expenses. This often makes the process of tracking and recording these expenses extra time-consuming and complicated leading to confusion and mistakes.
How LedgerDocs Can Help: Even though in ideal circumstances you would separate your personal and business finances. Sometimes it is already too late, you have used the same account all year and now it’s time to hand over your finances to your bookkeeper to manage. LedgerDocs can help mitigate the fallout from this mistake while you work towards separating your finances.
Using the tag feature, within LedgerDocs, you can easily tag personal business vs personal ones to help clarify the information within the statements. To provide additional context, you can use the notes feature. Add notes for your bookkeeper to help them understand the nature of specific expenses, further reducing the potential for confusion.
If you have questions or need to draw your bookkeeper’s attention to a particular expense, you can utilize the @ mention feature. This function allows you to notify your bookkeeper directly, ensuring swift and accurate clarification.
The Mistake: Anthering task that can easily slip through the cracks when a business owner is managing their finances or they are using an inexperienced bookkeeper is reconciling the businesses’ bank statements with the company’s financial errors. This can result in errors and missed discrepancies.
How LedgerDocs Can Help: LedgerDocs makes reconciliation a breeze. Securely link your bank account to LedgerDocs to automatically fetch your bank statements each month. Allowing you to store all of your bank statements and your recipes and invoices in the same place. Use the QBO integration to extract key data and upload it automatically to the appropriate fields in QuickBooks. This synchronization of financial data reduces the tedious tasks required to perform reconciliations, such as searching for receipts and cross-referencing transactions, resulting in a more efficient, accurate, and simple process.
Forgetting to Back Up Financial Data
The Mistake: In the world of business bookkeeping, data loss can be catastrophic. But unfortunately, it happens all too often. It is not uncommon for bookkeepers or business owners to forget to back up financial data, putting important records at risk.
How LedgerDocs Can Help: When you use LedgerDocs stores and manage your financial documents, you can rest easy knowing that your information is securely and automatically backed up in the cloud. You can access your data from anywhere at any time without having the fear of breaching security or losing your information.
Discovering a mistake in the way financial documents have been managed can be stressful. Catching, fixing, and avoiding making these mistakes again in the future is critical to maintaining the health of your books. LedgerDocs is here to help get back on track and stay on track as painlessly as possible, with thoughtful features designed specifically to help streamline the bookkeeping process.
Book a demo and let our team show you how LedgerDocs can make your bookkeeping process become precise and hassle-free process.