There is money flowing out of your business right now as a result of simple small business accounting mistakes. Below are the top ten and how to fix them:
Not Balancing Your Bank Statements
All sorts of strange deductions can happen from your cash accounts at your bank. For example, checks and direct transfers can be cleared for the wrong amount. Checks can be cleared in your account that are not your checks. A transaction may be recorded for $63 when it is supposed to be $630 or worse, it could have been entered twice.
Solution: Balance checking accounts every month. Have it done by a different person than the one that pays the bills to add an increased level of security. Have an accountant check it quarterly.
Letting Customers Pay With 30, 45 or 60 Day Terms
Every day, you don’t collect money from customers for an outstanding bill is a day you are acting as their personal bank.
Solution: Ask to get paid at time of purchase or no later than 30 days. You will be amazed how many customers will agree to do this.
Not Following up to See if Invoices are Received and Scheduled to be Paid
Many small business owners’ mail or email invoices, but never check to see if they were received by the customer or when they are scheduled to be paid.
Solution: Establish a strict follow up schedule. Call to see if the invoice was received and when it is to be paid. If payment is not received by the promised date, follow up again.
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