Big businesses have the advantage of having a professional accountant whose sole job is to watch the numbers. Small home business owners, or even self-employed consultants or freelancers, have to do bookkeeping themselves–on top of everything else the business demands.
With this set-up it’s quite possible for you to make bookkeeping errors. Mistakes happen, but when those numbers represent money and assets, accuracy is important. Here is a simple, straightforward and easy guide — just like o5.com’s other recipes for life.
Locate the bookkeeping error
When looking for bookkeeping errors you need to have the proper frame of mind for it. You should be focusing on number-checking, nothing else.
Common bookkeeping error # 1: wrong amount
One of the most common bookkeeping errors is keying in the wrong amount. This is a very crucial error because one wrong figure will already ruin everything because the final results will be wrong.
The problem is often caused by keying in the wrong numbers. Some of the common reasons for keying wrong amounts is skipping a line in the data that is entered or by jumbling up the data from two different lines.
Common Bookkeeping Error # 2: swapping numbers
This is a common mistake when inputting numbers that look alike. For example, the numbers 2 and 5 could look the same especially to a person who’s either trying to do his job quickly or is already fatigued. The only way to prevent this error from occurring is by being more deliberate with inputting numbers. Slowing down and taking a little more time to look at the numbers closely will help eliminate this error. Other solutions would be to print out the data to make it easier to look at or by zooming in on the data on the computer monitor to make it easier to read and identify the different numbers.
Common bookkeeping error # 3: wrong decimal points
Another common error is putting in the decimal point in the wrong place. This honest mistake can have a huge difference in the outcome. For example, 155.5 and 15.55 already spells a difference of almost 140. This error happens not just with manually inputting the decimal point but also automatically when the wrong commands are specified in a spreadsheet software.
Common bookkeeping error # 4: wrong accounts
A really big error would be putting a transaction from one account to another account. This is a potentially devastating error and care should be taken to avoid this kind of error. Double checking figures and the indicators for each figure will help in identifying which account each transaction belongs to.
Common bookkeeping error # 5: wrong columns
Finally, inputting figures on the wrong column or side is also a potentially devastating problem. For example, mixing the figures and putting a number that is for a debit to the credit side will have a huge difference in the final figures.
In order to avoid this mistake, a simple solution would be to input all of the credit first then just follow with the debit side.
Looking for professionals
Bookkeeping is a very important, precise and time-consuming task. You may want to consider getting a professional bookkeeper to handle this. You can check online directories for your area: United Kingdom, United States, Canada and Asia Pacific.
Photo from statonbookkeeping.com
I certainly can use these tips. I think I might have to stick with relying on the pros, though.