Virtually every department in any business is crucial to its success. Why else would you have it? That said, there are some businesses that can have more of an impact than others when it comes to the consequences of mistakes that get made. One of those is your accounting department. Whether committed innocently or not, some accounting mistakes can result in your business getting fined.
Inaccurately Reporting Income
Accuracy is crucial when it comes to accounting. Ask anyone who’s ever had to tangle with the IRS before. You’d better believe that if you find your company getting audited, they’ll be going over everything with a fine-toothed comb. If you made errors when reporting your income, they’ll find them. That can result in some hefty fines for your business. That’s not something you want to deal with, which is part of why it’s best to leave that sort of thing safely in the hands of professionals with stellar reputations.
Business taxes aren’t just limited to the traditional tax season. For a business, taxes are a year-round process, especially when it comes to payroll. Managing payroll involves accurately accounting for many federal and state taxes. Failure to accurately record and pay these taxes can cost your business more in the form of fines. Again, this is a task best left to professionals with an aptitude for details and software that minimizes the occurrence of human error.
Not Tracking Expenses
When was the last time you kept a receipt instead of throwing it away? If it was a receipt for a business expense, the answer had better be the last time you had such an expense. Remember that fine-toothed comb the IRS will use to go through your figures? It doesn’t just apply to your income – it applies to your expenses as well. If you want to write something off as a business expense, you need to have the paperwork to back it up. No receipt means no write-off. Failing to have proof of your purchases can mean some nasty fines if you get audited. Keep the receipts. It’s just not worth the risk.
If you were to ask any business owner what the main purpose of their business was, if you were to really get down to the bottom of it, the honest answer is to make money. That can’t happen if your business is constantly making accounting mistakes, especially if those mistakes get you fined. Remember, you’re in the business of making money, not hemorrhaging it away.
Check out this article on critical mistakes that can cost your business!