Avoid Common Financial Mistakes

Avoid These Common Financial Mistakes Made By Small Business Owners

Starting a small business is exciting and stressful at the same time, and some people compare it to a roller coaster ride. When you start a new venture you can expect to experience some great opportunities, but there are some common mistakes that might pop up along the way as well.

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Since the stakes are high, it is essential that you are careful to avoid these common mistakes so that you can create long-term growth for your company. Here are the 3 biggest mistakes that you can avoid:

Classifying Employees Incorrectly

Do you know the difference between an employee and a contractor? It is essential that you talk with an accountant to understand these differences, because the classification impacts the way the payments are handled. If you classify an employee incorrectly as a contractor, then it is possible that you might have to pay back wages and penalties.

Lack of Automation

Are you still trying to do everything by hand, because you don’t have a good financial system in place? It might not seem like a big deal to track payroll, invoices, and other financial information in a spreadsheet. But, these activities are eating away at your productive time each day. Instead of trying to track everything by hand, it is better to implement a good financial system from the beginning. It’s much easier to use automated systems right now, rather than wasting time with manual tracking and then trying to transition everything to an automated system later on.

Cash Flow Problems

It is common for a small business to be over-extended, making it hard to come up with the cash flow that is needed to keep the business running. If you aren’t staying up-to-date with finances, invoices, and bank account balances, then you might find yourself in a world of hurt when you need cash to restock inventory or pay your employees. Instead of making knee-jerk reactions every time you need to make a financial decision, it is better to stay current with your financial tracking systems so that you always have current financial information about your company.

The easiest way to stay current with your small business finances is to hire a professional to help. In fact, many business owners find that hiring an accountant or bookkeeper to assist with financial tracking is a way to decrease costs and boost the success of the business. Here at Easier Accounting, we offer the accounting and bookkeeping services that you need. Call us to learn more: (888) 620-0770

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