Bookkeeping is deemed to be one of the most important aspects of any business, yet it always gets overshadowed by different company operations.
It will only become apparent whenever there is a problem- usually borne out of a supplier demanding payment or there were some unforeseen accounts receivables that you haven’t collected yet.
Whatever the case may be, your in-house bookkeeper actually has a lot on their shoulders. You may want to consider getting bookkeeping services in Malaysia which are known to be highly competent.
In any case, there are numerous ways your bookkeeper can ruin your business. This article highlights some of the common ways.
Ignoring or Losing Receipts for Small Transactions
No matter what expenses you have to consider, it is important that your bookkeeper keeps tracks of all of your company’s receipts, even if they are just small (and rather) negligible transactions.
The reason is simple: those small transactions can be added up and the aggregate number that you are going to get is much bigger than you might expect.
That is why it is imperative that you let your bookkeeper keep all of the receipts no matter how big or small the transaction is.
A side benefit would be that it will make it easier for auditing purposes if you keep track of every transaction that your business makes.
Failing to Keep an Accurate Accounts Receivable Aging Report
So, your business is doing well and you have plenty of customers. There are some that would pay you outright with cash and there are some that would pay you via monthly installments.
Everything is good and all, but there is one problem: your bookkeeper didn’t make accurate accounts receivable reports.
If you are losing money, chances are that there is an error in such reports. There are probably some people that still not have paid their dues and your accounts receivable report could have notified you if that is the case.
Accounts that either have 120 or even 180 days of arrears can ruin any business. That is why it is important that your bookkeeper should maintain all financial reports with updated data at all times.
Improperly Categorizing Expenses
Bookkeepers have acquired education to help them get to where they are now. However, there are some people that might have lacked some practice in that they might not be able to do things as effectively as possible.
For instance, all financial statements follow the GAAP which makes things standardized. This translates to accounts that are much easier to read and it is much more streamlined than ever before.
The problem is that there are still some bookkeepers that improperly categorize your business’ expenses. This can lead to a number of problems and could spell doom to your company. Make sure that the bookkeeper that you hire knows the GAAP.
They Forget (Or Ignore) to Look at Your Financial Reports Every Month
Bookkeepers can get really busy, but this shouldn’t be an excuse not to reconcile with your previous financial reports.
Not looking for any erroneous entries or accounts that are due could pile up and you could be in serious financial trouble if that is the case.