7 Common Accounting Issues That Could be Affecting Your Business

Reading Time: 3 minutes

Accounting ecosystems are incredibly complex, and getting an accurate financial picture of your business relies on accurate date, following processes that ensure the accuracy of that data, and setting up systems that help you manage your business effectively. When these elements break down, you’ll find yourself dealing with an unfortunate accounting issue.

Let’s break down 7 common accounting issues that could be affecting your business.

1. Inaccurate or Duplicate Data Entry

The most common accounting issue we see in new clients (and why we offer bookkeeping software cleanup services), is inaccurate or duplicate data entry. These issues can be as simple as a misplaced decimal point or two numbers being switched to even bigger errors like missed line items or inputing into the wrong area.

While most accounting softwares follow double entry bookkeeping standards and offer automations to reduce the risk of error, human input is still required, and with human input and data entry there is always room for error.

Data entry issues can be a huge pain to rectify, which is why it’s important to reconcile statements and all transactions. Periodic internal audits or checks from a CPA can help keep your records accurate as well.

2. Unreconciled Statements

As you might have guessed, the next most common error we see is unreconciled statements, whether they are account statements, bank statements, or credit card statements.

Reconciling your statements is one of the top tools in your accounting toolbox to ensure that records are accurate, and this process is crucial to every single business’ process, whether you are freelancing on the side of a day job or a multi-employee business.

If you are leaving statements unreconciled, you might be missing duplicate transaction, inaccurate charges, instances of theft, or other errors. This is a straightforward way to protect your business’ financial health. We can’t press enough the importance of reconciliation.

3. Miscategorized Expenses and/or Transactions

Whether you’re inaccurately tagging software and hardware expenses, or adding transaction details to the wrong account, miscategorized expenses and transactions can really screw up your entire accounting ecosystem.

While this can disrupt the accuracy of your reports and your cashflow, come tax time this can cause major issues. Expenses absolutely must be correctly categorized for accurate tax reporting, and miscategorizing expenses or transactions can throw off your depreciation calculations and even cause you to misreport expenses and income.

4. Ignoring Depreciating Assets (or not calculating correctly)

A depreciating asset—such as a computer, piece of equipment, or company vehicle—affects the valuation of a company’s total assets. If you ignore depreciating assets, you are missing out on valuable tax breaks and accurately portraying your company’s asset value. But, you must make sure you calculate these depreciation values correctly. If you’re not sure if an item qualifies as a depreciating asset, or if you did not claim something you should have the previous year, speak to your CPA and/or accountant.

5. Paper-Only Record Keeping (or record keeping without backups)

Paper-only record keeping is inefficient and much more error-prone than software-based accounting, however, no matter what approach you take, it is absolutely critical that you back up your data. Most accounting softwares conduct automated backups and stores your information in the cloud, so you can access it from anywhere and don’t have to worry about losing valuable information if your computer crashes.

Record storage is a critical component of accounting. If you prefer the ease of paper-only record keeping, you may want to consider bringing in a computer-savvy individual to input your paper records into an accounting software program that also manages backups.

6. Not Having Internal Controls and Workflow Standards

Internal controls, workflow standards, and designating roles in a way that ensures data is checked for accuracy by multiple people helps prevent fraud, ensure records are accurate, and keeps your data and reporting accurate.

If you don’t have internal controls, or your internal controls aren’t robust, you might end up with inaccurate financial statements, missing money and assets, inaccurately filed taxes, and many other issues.

An accounting and CPA consultant can help you establish controls that segregate duties, offer second-checks, and protect your company’s financial health.

7. Not Working with a CPA

While some areas of accounting can be handled by other professionals (i.e. bookkeepers updating your ledger, HR professionals issuing payroll), this all should ideally be done under the watch of a CPA. A CPA understands accounting best practices, ever-changing IRS regulations, accounting standards, and how to set your accounting system up to run efficiently and effectively. Without a CPA, your company is at risk for error.

There are so many elements of accounting that make for challenges when data isn’t issued accurately. Taking a proactive approach, ensuring you are practicing due diligence, and taking the help of a Certified Public Accountant can help make sure that these accounting mistakes don’t impact your business in the day-to-day or at tax time.

Facebook
Twitter
LinkedIn
Sign Up For Our Weekly Newsletter
*Email
AKIF CPA
5.0
Based on 107 reviews
powered by Google
Annie Phillips
Annie Phillips
12:35 10 Oct 21
Turn around time was amazing on the project I needed done. When you don’t understand all the different forms communication is key and you will get that here. They are there to explain what and why you need it.
Meru Kapadia
Meru Kapadia
23:33 01 Oct 21
I usually don't write reviews much as everyone has different experiences, but definitely wanted to share the positive experience I have had here and why I would recommend them to all my family, friends and co-workers.I got a referral for here from a friend, so thought of giving them a try over my old CPA firm. I have been going here for a couple years now and have to say they are top notch. They are always responsive and willing to work with me even when I am delayed. I generally like to ask a lot of questions and not once did I feel like they were annoyed by it and would very thoroughly and positively answer all my concerns with detail explanations. Even during the pandemic, they worked with me 100% virtual and it was seamless. Overall, I am very happy with this firm and will continue with them for the foreseeable future.
Kevan Shah
Kevan Shah
21:45 01 Oct 21
I’ve been going to them for 3 years now for multiple of my businesses. I changed to them after I had problems with my previous CPA firm and I’m so glad I did! Best decision I ever made for my businesses. They have saved me thousands of dollars over the years as well as deal with my immensely complicated tax filling issues. No matter when I call, they always help answer all my questions (and trust me I have a lot) and put my mind at ease on all my concerns. I feel as if I am family the way they take care of me. The quality of their work has not changed; very consistent and professional. It is an understatement when I say I highly recommend them.
Maunil Shah
Maunil Shah
16:19 01 Oct 21
AKIF CPA is the best place for your tax needs! Saim has been easily available for my all my questions and concerns. Couldn’t ask for a better firm that provides excellent service and a familiarity with their clients. I always recommend family and friends to AKIF CPA!!
Shah Hussain
Shah Hussain
03:58 01 Oct 21
Hello AKIF CPA,I wanted to share my experience with you, your team and whomever may be reading this message. My most humble thanks to you and your team for a being such great part of my success.You have done a fabulous job for us this year, and since you took over our books (during our most devastating times) you have literally taken weight off of our shoulders.Thanks for bringing everything up to date and also providing us with numbers or as you call it consultations, ahead of time so we could seal the holes.Great work!!!Shah H.
Sumit Dalwadi
Sumit Dalwadi
04:57 30 Sep 21
The professionals at Akif have been absolutely amazing! Quick to answer all the questions I had and always available to offer their guidance.
Calvin R
Calvin R
20:21 29 Sep 21
I recommend these guys! I will be going back next year. They made everything simple and we understood what was happening. There we issues with our taxes due to our previous accountant and these guys fixed everything. They answered our questions and service was always with a smile.
Ammoria Daniels
Ammoria Daniels
02:11 16 Sep 21
We contacted Akif with an urgent matter regarding corporate taxes. Akif immediately understood what was needed and within days had everything ready to sign. The level of service we received was amazing and unmatched. Waqar expertise in trucking industry made our situation seamless. His communication was outstanding; I heard from him daily and could have been completed sooner if I was as fast as he was 😃 Highly recommended!
Joe Paneitz
Joe Paneitz
18:30 18 Aug 21
What an absolute pleasure to work with this CPA firm. My business is already seeing such a positive impact and growth. I cannot believe I didn't connect with them sooner. This firm is helping in so many ways! 5 stars is an understatement! Thank you so much for your help AKIF CPA
Helptest ARCpoint Labs
Helptest ARCpoint Labs
15:02 18 Aug 21
The firm is quick, responsive, and has the latest technological software. Thus far, I have been with them for 3+ years and will continue to work with them even after relocating. They make it easy even when I'm miles away. Would highly recommend them.
Luz Tipaz
Luz Tipaz
16:06 13 Jul 21
Saim and his team are the best CPAs in town. I have been their client for years. All started when I needed help with company structure with multiple companies and then accounting and Taxes. I have been very happy ever since. Thank you AKIF CPA.
Maria perez
Maria perez
18:31 08 Jun 21
Me and my husband have been getting all of our personal Taxes, business Taxes, monthly bookkeeping, accounting and payroll done with AKIF CPA. Recently, we had more stuff come up and had detailed analysis done on capital gains, single family rentals (SFR) and business disposition. You will only know how great this CPA company is until you have worked with them and given them a chance. Words can’t describe our experience. AKIF CPA gets the job done every time - very reliable, professional and affordable.
Afnaan Amin
Afnaan Amin
22:14 02 Jun 21
Very good experience, we had unique situation in regards to cross border income as Canadians currently residing in the US. Income on both sides of the border through completely different channels. Everything was very easy and completed timely, I also had lots of random questions and Mohammad provided top notch service along the way and even after we finished our taxes!! Highly recommended.
Ryan Paton
Ryan Paton
10:56 08 May 21
I moved to the USA from Canada late 2018 as part of a promotion/relocation for work. For my 2019 returns, I used an accounting firm recommended by the local Canadian social club in my city, which was a terrible experience. They were slow to respond to inquiries and would follow up in piecemeal requests which dragged out my return process over several months, often asking for information I had already provided.For the price I paid, I vowed to find better service. I found Mohammad online and decided to reach out. Mohammad was extremely responsive, took care of my US and Canadian returns as well as my wife's business returns in a timely manner. Overall, it was a very positive experience and I would recommend him to another in my situation.
Tuan Vo
Tuan Vo
01:59 20 Apr 21
I relocated to Texas from Alberta, Canada and needed a CPA to help me with my cross-border taxes as I was not happy with the CPA that I used previously. During my interviewing process to find another CPA, I had good feedback from Mohammad as he was able to answer my questions regarding my unique tax situation with expertise, and importantly to me, in a timely manner. I decided to use his services for the current tax year and I have nothing but compliments for the work Mohammad provided. If you are in need of a professional cross-border CPA, I highly recommend reaching out to Mohammad Akif.
See All Reviews
js_loader
Archives

Crypto Tax & Accounting Newsletter Signup

*Email

Cross-Border Tax Newsletter Signup

*Email