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15760 Ventura Blvd, Suite 610 Encino, CA 91436
FREE CONSULTATION818-436-2775
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Personal, Affordable Payroll Services, Bookkeeping, and Tax Processing for Small Business throughout Los Angeles County.

Three Common Accounting Mistakes That Businesses Make

The top accounting firms in Los Angeles are busy working with multiple businesses each day. During this process, they often notice that many of them make the same mistakes that complicate the accounting process. If you are a business, it is important to try to avoid these three mistakes. In doing so, your finances will benefit.

1 – Forgetting About Your Receivables

One of the biggest mistakes companies make is forgetting about their receivables. Collecting money is not the most exciting part of doing business. However, it is necessary if you want to stay in business. Also, in terms of accounting this can be a major nightmare. When you have several unpaid receivables in your books, you might end up overpaying on your taxes. In order to pay the right amount of taxes, you have to write these receivables off as bad debts. It is better to stay on top of these receivables and figure out a way to make sure you collect them as soon as possible.

2 – Losing Receipts

Many top accounting firms in Los Angeles say that you should always keep your receipts from your expense charges. Although your bank account might show charges, it does not itemize what you spent. This makes it hard to allocate the charges to the right expense account. If you were to get audited, this could become an issue. Instead, find a good organizational method for saving your receipts.

3 – Not Recording Cash Expenses

If you pay with cash, it is important to record the expense. You can right it down on a piece of paper or keep the receipt from the transaction. These expenses do not show up on your bank statement. However, you definitely want them to show up on your income statement. If you need to, download an app to help you keep track of what you are spending.

These three common mistakes that the top accounting firms in Los Angeles notice regularly are easy to avoid. Determine today how you can prevent them for better accounting results.