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Common Accounting Mistakes

According to the U.S. Small Business Administration, about 50 percent of new small businesses started in the United States will fold within the first five years of operation.* The most common factor for failure in new businesses is poor accounting and financial management. It then becomes clear how small accounting and clerical errors can have a big impact on the success of professionals and businesses.

Even the most experienced professionals make mistakes, but most of these mistakes are avoidable. The following are some of the most common accounting mistakes and how to avoid them.**

Making Data Entry Errors

This may seem obvious, but even the smallest overlooked errors become bigger problems later on. It is important to check and double-check all of your entries. It is also important to reconcile accounts against all bank statements ever time. Being a little extra careful can save you a lot of time in the long run.

Working Without a Budget

Tackling your accounting without a budget is like going at it blind. Budgets are important because they offer a baseline to make overspending and surplus decisions. Budgets do not have to be complex and just need to function as a point of reference. Remember that your budget is not fixed and can be adjusted as you progress.

Improper Filing

Disorganization will cost you a lot of unnecessary time and money. It is important to keep track of all invoices, receipts, bank statements and other paperwork. Develop a clear system and stick to it. Get into a daily or weekly routine of organizing your paperwork to avoid it piling up and overwhelming you.

Failing to Back Up Information

Even with an organized filing system in place, things can get lost. The nice thing about most Web-based systems is that they automatically back up your information and stores it off-site. It is easily accessible and immune to natural disaster or other emergency.

Reckless Spending

It is easy to be loose with petty cash, but it is important to moderate its usage and maintain receipts for all petty cash purchases. It is also important not to confuse profits with cash flow. Even if you show a profit on paper, you could still run into problems if you are spending too much on product development. Again, working with a budget will help control these spending issues.

Learn More Accounting Skills at Everest

You can learn these and other accounting skills in the associate or bachelor’s degree in Accounting programs at Everest. Accounting is an essential part of any business. You can gain experience in the areas of:

  • Principles of accounting
  • Financial Statement Analysis
  • Payroll Accounting
  • Tax Accounting
  • Cost Accounting
  • Applied Spreadsheets
  • Financial Statement Analysis
  • Applied Business Law

You will train with industry professionals and get hands-on experience to prepare you for an entry-level position in the business, industry and governmental accounting fields. And quality training doesn’t end after graduation. Everest provides you with job-search assistance with help from its career service representatives

Contact us to get more information on what Everest can do for you.

* Source: http://www.sba.gov/sites/default/files/files/an%20analysis%20of%20small%20business%20and%20jobs(1).pdf. Your own hard work, professionalism, experience, work attitude, local market and other factors will impact your personal employment opportunities and pay.

** Source: http://www.lautze.com/level4/NPOfal08.pdf

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