08 Oct 5 Most Common Accounting Mistakes Small Businesses Commit in the Philippines

Filipinos are known to be “maparaan” or resourceful. If they think they can save money by doing the jobs by themselves, they will definitely do it – yet this may not be the best idea for business owners. Most especially for Bookkeeping and Accounting, even a small mistake may cause a big impact on the company’s reputation and finances. Below are the most common mistakes small businesses commit by trying to handle their own accounting.

1. Doing all accounting transaction on their own

When you create your own business, you become passionate in doing everything for it. When your business is just starting, you might just have small number of transactions that you can still handle. However, sooner or later, problems will arise when you try to manage all transactions on your own which can expose your business to a lot of risks and penalties. Doing accounting is not just about addition or subtraction. You have to record, analyze, and report every centavo that you spend or earn.

Hiring a professional accountant can spend their time doing bookkeeping and accounting while you can focus on the other important things in your business.

2. Combining business with personal finances

A business, may be big or small, should be treated as an entity, hence, it has an independent existence. All transactions within the business especially the deductions should be recorded as it may be a valuable tax deduction for the business. Doing it without proper knowledge will surely mess up the business financials.

3. Submitting incomplete and inaccurate financial report

One bad entry may result to painful consequences to the business. Incomplete and inaccurate financial reports may have been caused by wrong entries, lack of information or misinterpreted data. Incomplete and inaccurate Financial Report may cause penalties, wrong decision making, fraud or even bankruptcy.

4. Limited knowledge on Tax Regulatory Laws and Compliance

As taxpayers, we have to understand our rights and our responsibilities to comply with the law. This is very important most especially for business owners. If the owner or accounting professional fail to keep up with the changes concerning tax regulatory laws, it may cause penalties and other charges, and the business may possible miss out on tax incentives.

5. Hiring the wrong person

If the person who manages your accounting and bookkeeping is not knowledgeable with the job, then you are in great trouble. As a business owner, you are liable for any mistake or error that your employee has done. The risk of hiring someone who is not a licensed professional may put your business in danger, he might even engage in a criminal activity like embezzlement or theft.

Looking for a competent and reliable Accounting and Bookkeeping service provider? Bliink might just be the perfect choice for you. We just don’t generate reports and compliance for you, we also make sure to see you twice a month for consultation and data analysis. Not just that, you’ll also be surprised of how affordable our services are.