As accountants working with Bermuda businesses every day, we see the same bookkeeping mistakes come up time and time again. These errors might seem small, but they can have a significant impact on your bottom line. Here are the top five mistakes we see—and how to avoid them.
1. Mixing Personal and Business Expenses
One of the most common mistakes we see, especially with sole proprietors and small business owners, is mixing personal and business expenses. This not only makes bookkeeping a nightmare but can also create problems come tax time.
The Fix: Open a dedicated business bank account and credit card. Use these exclusively for business transactions. It's a simple change that makes a world of difference.
2. Not Reconciling Accounts Regularly
Bank reconciliation might not be exciting, but it's essential. Many business owners only reconcile when they absolutely have to—like at year end—and by then, discrepancies have compounded.
The Fix: Reconcile your accounts monthly, at minimum. Better yet, have a professional handle it. Catching errors early prevents bigger problems later.
3. Poor Receipt Management
Lost receipts mean lost deductions. We've seen businesses miss out on thousands in legitimate expenses simply because they couldn't prove the purchase.
The Fix: Go digital. Use apps like Dext or Receipt Bank to capture receipts immediately. Or better yet, let us handle it as part of our bookkeeping service.
4. Ignoring Accounts Receivable
You did the work. You sent the invoice. But following up on unpaid invoices often falls to the bottom of the to-do list. This impacts cash flow significantly.
The Fix: Set up a systematic follow-up process. Send reminders at 30, 60, and 90 days. Consider offering early payment discounts or using automated payment collection.
5. DIY When You Shouldn't
We get it—you want to save money. But spending hours on bookkeeping when you could be growing your business often costs more in the long run. Plus, errors made by non-professionals can be expensive to fix.
The Fix: Know when to bring in help. If your bookkeeping is taking more than a few hours a month, or if you're not confident in the accuracy, it's time to outsource.
Ready to Fix Your Bookkeeping?
If any of these mistakes sound familiar, you're not alone. The good news is they're all fixable. Our team at Bermuda Accounting Services can help you get your books in order and keep them that way. Contact us for a free consultation.