Mistake #1 - MIXING PERSONAL AND BUSINESS FINANCES: Keep personal and business finances separate!! Make sure you have a dedicated bank account and credit / debit card that is used ONLY for business expenses.  There could be negative repercussions with the IRS if these are not managed separately.  As your business grows, consider having up to three bank accounts: one for operating expenses, one to hold your taxes so they are available when it is time to pay, and the other to set aside profit which you can use to reinvest in your business and maybe pay yourself a bonus for all your hard work. If you have not done so already, set up a salary or scheduled draw to “pay” yourself.  This makes it is easier to plan both your personally and business finances.

Mistake #2 - NOT KEEPING UP WITH YOUR RECEIPTS - Get your receipts organized to avoid scrambling at the end of the year to pull your finances together.  Let’s face it, a shoebox or even a drawer full of receipts just doesn’t reflect you have a handle on what is going on. A great way to manage those receipts is to scan or snap a picture of the receipt then store it in a file in the cloud, on your computer or on a jump drive.  Some cloud based bookkeeping systems like Xero and Quickbooks Online even allow you to attach that receipt right to the transaction so you don’t ever have to go looking again for a lost receipt.  Plus, you will not have to worry about trying to read those faded receipts in a year or two.

Mistake #3 - NOT TRACKING YOUR EXPENSES -Use a good coding system, also known as a chart of accounts. A chart of accounts that is customized to your needs is crucial to track how money is moving in and out of your business. Coding every transaction can help you keep up with your expenses, which can prove invaluable at tax time.  

Mistake #4 - NOT HAVING A PLAN FOR FINANCIAL SUCCESS - Set up a budget!  Use information from previous years to plan how you will manage your money for your business to be on point for financial success!  Set out clear expectations so it is easier to track where you are going. Identify and cut back on areas that are taking too many of your resources, and beef up spending in areas that can actually help you grow, like marketing!

Mistake #5-NOT TAKING A BIRD’S EYE VIEW OF YOUR FINANCES-  Set aside time monthly to review your financials to see where you stand and plan for the future.  Reports like a Balance Sheet, Income Statement and Statement of Cash flows may sound daunting but can be a wealth of information on what is going on currently and where you can go in the future.

Mistake #6- NOT TAKING ADVANTAGE OF TECHNOLOGY THAT CAN TAKE YOU TO THE NEXT LEVEL - Consider moving to a cloud based bookkeeping software.  There are several great options available that are bank level secure and provide you with tremendous flexibility and quick access to your finances. All that is needed is internet access through your computer.  You can even get access through your smartphone and tablet.

Mistake #7-  NOT ASKING FOR HELP SO YOU CAN FOCUS ON WHAT IS IMPORTANT TO YOU - Consider letting a qualified bookkeeper come alongside to assist you in managing your practice books, someone who could provide some much needed stress relief, organization and a help give a better understanding of your financial present and future.  What would you do with the precious gift of time given back to you if you were relieved of the tedious task of tracking your finances? To what heights could your business grow if you had more energy to develop it?