Even businesses operating out of a garage or through someone’s computer at home are aware of the importance of accounting. It’s an important process that dictates the success and eventual growth of a business. But it’s also a difficult process where people are liable to get things wrong. These are some of them:
The most regular form of error during the accounting process is human error. People are liable to make all kinds of mistakes when entering data and doing calculations. The goal is to reduce these wherever possible and ideally have a check and balance measure.
While it might not be feasible to go through every document and field to ensure all materials are error-free, this must be necessary for all the big-ticket documents. There should be a good protocol set for checking out the essential aspects of a financial document during the accounting process.
The SARS won’t go off of any verbal agreements or negotiations that you present them with. They require documents in either hard or soft copy to validate or nullify any claims. You’re liable to all kinds of losses, from being unable to claim tax deductions to receiving penalties.
You should have policies that are rigidly followed to ensure that for all the payments being made and any reimbursements done, there needs to be an accompanying receipt for it. Unless you’ve received the bills for your purchases from any vendors, don’t pay them to ensure you get your necessary documentation.
Not Using Accounting Software
Globally, it’s becoming common practice to perform all accounting activities through software. It’s much faster than any work on paper and pen. Many modern tools come with a whole suite of tools that you can customize to meet your needs and potentially speed up your accounting process.
Another great aspect is that these can do a lot of the calculations for you once you’ve given them the correct formula, and they have much higher accuracy than a human. Pair these with backup services to keep your data secure, and you’ve got an excellent system set up for your accounting operations.
Not Hiring an Accounting Service
Accounting is a taxing job, requiring a lot of attention to detail. As a business owner, if you’re unfamiliar with the work, you’re likely to make a lot of mistakes during the learning process, and it will feel like an uphill climb.
For those well-acquainted with the process, they’ll know that the amount of time doing accounting yourself could be better spent on core business tasks. As important as accounting is, it can be repetitive and seem menial, which you can allow an expert to take care of for you instead.
It’s easier than ever to acquire a service to take care of all the accounting work for you. ANM Auditors offer you a complete package of services that cater to your business, including business accounting services, tax preparation services, business payroll services, VAT accounting services, professional bookkeepers for hire, and company registration services in South Africa. Reach out to us right away so we can help your business flourish.