Tips for Avoiding Accounting Errors

Accounting errors can have significant financial and legal consequences for businesses. Especially small businesses and startups, which often do not have specialized accounting teams, are vulnerable to such errors. To keep your accounting flawless and avoid legal issues, you should follow the tips below.

Thorough Records

A common mistake is the inadequate recording of transactions. It is crucial to carefully capture and store all financial documents, such as invoices, receipts, and bank statements. Swiss legislation requires that business records and receipts must be kept for at least ten years (Art. 958f OR). Using digital tools to organize and store these documents can help ensure compliance with this regulation and ensure traceability. Here you can find a post with more information on digital document storage.

Separation of Personal and Business Expenses

Another mistake is the mixing of personal and business expenses. This can lead to confusion and erroneous entries. To avoid this, you should use separate bank accounts and credit cards for your business transactions. This not only makes bookkeeping easier but also the preparation of the tax return, as all business expenses are clearly documented.

Timely Booking of Transactions

The untimely booking of transactions can also lead to an inaccurate financial overview. Regular bookings are essential. Modern accounting software can help set automatic reminders and synchronize bank accounts in real-time to ensure all transactions are recorded on time. Otherwise, it is advisable to set a fixed time window once a week or once a month to properly record the transactions.

Categorization of Expenses

A frequently overlooked area is the categorization of expenses. Incorrect allocations can lead to misunderstandings about the financial situation of the company. A clearly structured chart of accounts and training for employees can help here.

Attention to Small Amounts

Even smaller amounts should not be ignored. In total, even small expenses can have significant impacts. Therefore, all transactions, regardless of their size, should be recorded.

Conclusion

The topic of accounting can initially seem overwhelming. Much needs to be considered, and a certain discipline is required to ensure the financial overview of the company.

In such cases, it can be helpful to seek professional help. A trustee or advisor can help avoid errors in accounting. If you need support with your accounting, visit us at Findea.ch.