Common Mistakes made by Business Owners

Mistakes made in businesses

Even if you have a creative business idea, everyone knows that just having an idea and running with it is not enough to guarantee success. It’s usually the small details that can make or break a company. Every business has its own set of decisions to make – no one can guarantee a surefire solution that will work across the board. However, here are some common mistakes that you can keep a lookout for.

Procrastinating on paperwork

The accounting team needs time to close the books every month while also handling everyday activities within the company. If time is not allocated properly to get this done, it can eventually snowball and lead to books being closed way later than when it is supposed to. Though it may seem small, this can affect business as it makes it hard for business owners to make accurate and timely financial decisions.

Being cost-effective

Entrepreneurs and company owners should know the type of company they are running and make long-term plans to ensure that the company stays cost-effective. There are several ways to be cost-effective, such as hiring external auditors and accountants instead of hiring your own, or renting a coworking space instead of a whole office space.

In this day and age with the popularity of e-commerce and the availability of outsourcing, it is much simpler to be cost-efficient. If you are looking for an external accountant, be sure to reach out to us for price quotes.

Not focusing on other areas of your business

While the sale of your product or service itself and accounting are two aspects that you should focus on, companies should also develop other areas of business such as marketing, operations, product development and business development. However, most entrepreneurs spend most of their time juggling all these jobs.

If you are unable to recruit help for these roles when you need it, it can make it hard for you to devote your time to your business development and distract you from making proper decisions. As a business owner, make sure that you are working with what you can handle and do not be afraid to engage people to help you when you need it.

Keeping up with regulatory changes and new accounting standards

Keeping up with ACRA and IRAS’ standards can be daunting at times, especially when there are changes. No matter if you are doing your accounting on your own or engaging someone else to do it either externally or internally, make sure that everyone is on the same page when handling these new changes. Everyone should be clear about the new changes and settle all accounting matters following the new changes.

At Swiftly, we can guarantee that our accountants are familiar with all the ins and outs regulations under ACRA and IRAS. If you need a trustworthy accounting company to help you with your work, be sure to give us a call.

Reconciling your books

Here at Swiftly, we know how much of a hassle it can be to close your books, especially if you don’t have a good accounting system to help you. A small mistake can cause other even bigger ones such as inaccurate calculations and even audits. This is why you need to double-check all your company transactions at least once a month, if not at the end of every day.

Maintaining cash flow

This is one of the most common issues among small businesses – many of them end up failing in their first year due to cash flow issues. When this happens, it is largely due to the business owners’ lack of knowledge about how to manage money.

Many small businesses struggle to set aside funds to meet expenses, and this makes it hard for them to remain on top of their finances and track down payments from customers. This can improve if the business has a proper accounting system and proper accountants. With this at the back of your mind, it allows you to focus on business growth and creating a positive image of your company.

Not reporting small transactions

It can be pretty tempting to dismiss petty cash transactions as insignificant, especially in retail settings where transactions are conducted in cash. However, your company should keep track of all expenditures, no matter how minor. Even small transactions such as paying for postal delivery should be recorded.

If you can keep track of these small transactions, the bigger ones will be even easier to manage. It will help you manage your books when your firm develops in size and the number of transactions increases.