If you have to name one part that your business, mostly tend to make mistakes at, you would probably say it is the accounting section.

As accounting mistakes can range from minor to major ones, you need to remember that such mistakes can seriously hamper your business.

Here is a list of common accounting mistakes that you should avoid in order to improve and maximise your business’s wealth.

Mixing your personal expenses with business expenses
Do you use your company’s accounts to pay for your personal expense? If you do, you need to stop right now. This is because personal expenses and business expenses are two different things which you should never mix up.

Whenever you purchase things for your business, you strictly need to use the company’s accounts and keep a record of all the receipts. On the other hand, purchasing your personal items with the company’s accounts is a major no-no.

Not keeping records of all the expenses
All the expenses must be recorded accurately. This means all the expenses both the big ones and small ones. When you keep accurate records, you will be able to claim some major tax deductible benefits available to the businesses.

Associating profits with cash flow incorrectly
As a business owner, you should remember that profits don’t always equal to cash flow. That is because, when you make a deal, it does not mean instant cash and generating profits can take a long time which can often result in unsteady cash flow. In some cases, if you need to close a deal, it can cost your business money in the short term which again affects your whole business operations.

Not hiring an accountant
When running a business, every term related to your finance might be alien to you. This is why a professional help is needed to help you manage your business. However, you must not be tempted to do accounting and managing your books on your own to cut down some costs. With the plenty of knowledge on accounting and financial compliance, accountants can be a great investment to grow your business.

To understand and know about your accounts and finance, you surely need to invest your time on it. Otherwise, your finances can easily take a back seat.

If you want to hand over your accounting details to a reliable professional, you can contact Harley Street Accountants. To know more, give us a call at 020 7060 9556 today.