Small business owners are busy people. As one myself, I understand. Between managing team members, meeting customer demands and brainstorming new ideas, there's not always a lot of time left for bookkeeping. But despite a hectic schedule, it's important to stay on top of your finances ‒ otherwise, you may face some costly mistakes.

In this blog post, I'll outline five simple bookkeeping mistakes that small business owners often make and offer advice on how to avoid them. I hope this information proves helpful in keeping your business running smoothly!

1) Not keeping track of your expenses – Recognizing your expenses will help you with various aspects of your business. Understanding what it costs to operate your business will make it easier to determine rates for your products or services and monitor your margins. Additionally, by knowing your total expenses, it will be easier to see how much money you should be keeping on hand for emergencies.

2) Not recording income and expenses in the correct month – If you are not documenting your income and expenses in the months in which they occur, your financial reports will be skewed. You will not have a clear picture of your margins, turnaround timing for payments, net profit or loss and more. Keep things simple and be sure to record and reconcile your sales and expenditures when they take place.

3) Not reconciling your accounts regularly – If you hear the word, 'reconcile' and immediately say, 'what?!?,' don't worry, you're not alone! In a basic way of thinking about it, reconciliation is like balancing your checkbook (if you still have one of those!). It provides you with an opportunity to ensure all account transactions have been accounted for and your month-end balance in your records, matches what's been provided by your financial institution. By reconciling your accounts minimally every month, it can save you a lot of time and energy by catching any discrepancies timely.

4) Not filing taxes on time – This one is pretty straightforward but can quickly spiral into disastrous, costly territory. Be sure to connect with your bookkeeper, CPA and even payroll provider to confirm which taxes your business needs to be paying, the frequency and who will be responsible for submitting them. Not filing on time can cause you to incur penalties, including fees and interest, or worse.

5) Not having a separate bank account for business transactions – For both ease of financial management and business requirements, separating your business and personal expenses is essential.  I can guarantee that your bookkeeper and CPA will be very grateful if you provide them with clean financial records that they don't have to question or sort through. This will also save you money if you're paying by the hour! Additionally, without getting into the legalese, comingling business and personal funds can create major problems if your business were ever to face legal troubles. You can easily avoid this by establishing separate bank accounts under your business and also having a system for managing and sharing any receipts or transaction information.

So even though we're all busy, and it may be tempting to put bookkeeping off until later, doing so can end up costing you more time (and money!) in the long run. However, by prioritizing your financial management, creating an actionable, manageable plan or reaching out for help from a professional, you can avoid these issues and stay on top of your finances.

Don't let the potential feeling of frustration or overwhelm when it comes to managing your finances keep you from achieving your business and personal goals.

Are you looking to go from bookeeping confusion to financial freedom and get back to doing what you love? Be sure to check out my upcoming FREE live Bootcamp!