Bookkeeping habits correctly are like values, knowing the right things to do and the effectiveness of the subsequent result of a well-planned routine is important in achieving one’s laid down objectives and goals. Habits are an apt illustration of one’s personality, it is subconscious and quite a difficult practice to give up, and for any business to thrive and reach its maximum expectation, the habits have to be generally good and must correspond with the precise business plan. It is very significant to intuitively understand the importance of weeding out habits that will affect your mall business and to this effect, we will look into the top 5 bad bookkeeping habits that you need to drop to achieve immense financial success in your business. Let’s take a ride;
5 bad bookkeeping habits that business owners need to drop
Trailing and procrastination
Remarkable consistency aids the sustenance of every business, keeping your records updated at the right time and immediately after the transaction is very important, most business owners usually lag in inputting daily business data on their bookkeeping list which is a bad bookkeeping habit, delay in a week or two will have a significant effect and visibly weigh you down, getting back to reconcile your books can be tedious and a disturbing process. Bookkeeping Applications like QuickBooks, Xero are easily made available to you, you can definitely set these tools up and simply click instantly when inputting any data, and when you have challenges as regards to the usage of these apps, it is very important to contact the help of a professional bookkeeper who will guide you through these steps, some of these tools can be complexed and to avoid wrong input of codes, employ a bookkeeper and also totally stop the habit of procrastination by quickly doing the necessary bookkeeping at the right time instead of postponing this processes. Sometimes there are no remedies to certain mistakes and when trailing habit becomes frequent, it will certainly affect your business.
Typically associating personally and business together
Let me ask you a question, Can you mix your stained outfits and clean ones in your private closet? Or invariably wear a sleek suit with slippers to an event? Definitely no!! It is arguably a bad idea and a bad bookkeeping habit to combine your personal things with your business, like spending from your business income on your lifestyle and then fail to accurately record the expenses, it is safer to have a different business bank account for your personal and business purposes, get separate credits cards while creating a bridge and the self-discipline to maintain the running of your business and private things.
It is very difficult for any bookkeeper or business owner to effectively clean and efficiently handles the records of a book when it is mixed, the monthly financial review gives you insight into the performance of your business. If you combine your business with your personal, and how can you detect the progress of your business? If it is typically yielding considerable profits or losses? And if it needs more investment or if sales are made and the financial statistics are rising or falling. Carefully avoiding these bad bookkeeping habits is like covering the leaking roof in a duplex.
Poor tracking of specific transactions
Every business success hinges on efficient tracking by business owners of every economic transaction with its customers, you must be able to accurately record every sale and follow up the invoices, ensuring you receive payment for every service rendered or goods sold are important, it is understandable that some customers might delay payment due to credit cards issues to make an underpayment and promise to pay up later, you have to ensure you track these little financial details and make sure the payment is complete, otherwise, you will significantly lose money and experience accounting problems.
Typically create aging of accounts on reports on things received, the reason is to inform you about bills that are yet to be received, paid bills and past bills, if you ignore these fundamentals, it will have a huge impact on your business.
Not possessing bookkeeping expertise
Bookkeeping is very essential to financial productivity. It has relatively become a habit by some local business owners to handle their bookkeeping records personally even without possessing enough bookkeeping knowledge and specifications to handle such tasks. You typically need to have undergone training in accounting or bookkeeping to fully understand the rigors that come with expertly handling records so you don’t get overwhelmed by your books.
It really is a bad bookkeeping habit to consistently attempt to properly handle your books without proficiency, some expert bookkeepers are properly certified with handling these parts of your business. Carrying out bookkeeping duties without in-depth knowledge is like naturally asking a teacher to pilot a plane, making the right decision is as important as your business capital. Innovative solutions and satisfactory answers are what we adequately provide for every business.
Bookkeeping Habits – Poor communication
Good communication in business is what sunlight is to plant, a bridge to the realization of goals. Purpose, time, and effort are enshrined in communication. Most business owners imbibe the bad habit of poor communication especially with customers and the employed bookkeeper. It’s not just by answering calls or texts from investors or customers but also by creating good networking and building relationship with clients, employees. Most people will open up to their boss, and the owner from who they purchase goods and services, there are some who will stay loyal to you due to the level of good communication you keep with them. A good business with poor communication will only crumble the business over time. According to the statistics, 57% of employees report not being given clear directions and 69% of managers are not comfortable communicating with the employees in general. From the statistics, it is clear that there is a need to improve communication in the workplace.
- Some other bad habits you also need to know are;
- Poor inventory management
- No trusted data backup
- Not completely reconciling your accounts
- Ignoring small transactions
- Forgetting dates, appointments, and reviews
Bookkeeping habits are what speak without you uttering a word, it is significant that our habit is right on point and every bad bookkeeping habit stopped with the adoption of good ones that it tailored for further financial success.