When it comes to operating a small business, the devil is in the details, and this devil has a keen interest in his personal financial enrichment. Small oversights in your operations. Integrate accounting and inventory software directly into your process which could lead to sizable and unnecessary expenses and also Access the financial information you need. Fortunately, these oversights have easy fixes that will keep your hard-earned revenue under your control where it belongs. Correcting these three mistakes that are costing your company money should keep you from giving that detail-loving devil his due.
Improper Inventory Management
Dealing with inventory is the bread and butter of many a business. At first glance, recording what’s coming in versus what’s going out seems relatively intuitive. However, modern inventory strategies and techniques, such as advanced analytics, have made a science of inventory, and you could be missing out on their benefits. Improper inventory management can lead to dead inventory, and that, in turn, leads to costs you can’t recoup. By preventing unpopular or expiring inventory from collecting dust in your warehouse, you can pay less each month.
Losing the Receipts
In your personal life, you can find that the pockets of your winter jacket have collected a few too many receipts in them. On the other hand, when it comes to bookkeeping for your small business, you can never have enough documentation. By keeping meticulous records of all purchases, no matter how small, you can only help your cause at tax time—that way, you can make necessary deductions and always have the receipts to prove it. Without such proof, small businesses like yours find themselves paying too much in taxes. Whether you embrace a tangible filing system for your receipts or scan them and upload them to a digital archive, make sure you have exhaustive documentation of your expenses. But unlike your souvenirs from trips to the gas station and pharmacy, you definitely don’t want to leave these in your coat pocket.
Taking It Personal
Entrepreneurs can’t help but see their small businesses as extensions of themselves. When it comes to blurring the boundary between business and personal expenses, though, the Internal Revenue Service tends to have a different opinion. Putting personal expenses on your business’s books is tempting, but bringing more ambiguity into your accounting could be among the biggest mistakes that are costing your company money. Keep business and personal expenditures as separate as you can for clean books that accurately reflect your business’s revenues and expenses and keep that other, government-based devil at bay.