Extreme Accounting Errors By Small Business That Will Make You FREAK
You would think with all the sophisticated accounting software available that mistakes would all but vanish? Not so fast. Even with automation tools and sophisticated software it still happens. Only now, the errors are much larger in scale and complexity. As a result, they become EXTREME issues. The core problem is many don’t what a mistake looks like when they see it and therein lies the problem.
1) Modifying Numbers You Shouldn’t Modify.
Hello People—You shouldn’t change your prior year books!! Once Done, they are DONE. Many software packages allow you to make changes to prior years. It’s not recommended, but it happens and can cause a cascading effect of errors and issues. Do you like looking for needles in a haystack? Yes? No? If no, then do yourself a favor and make sure you have a competent bookkeeper or accountant plus an auditor or outside resource for double checking the books.
2) Data Mis-Management.
This is a biggie! Issues include not backing up your data. Having corporate financial data saved to a personal device. Working with sensitive data in an open Wifi Internet. This stuff happens…people! How about erasing data by mistake? Or you unknowingly modify formulas. What is the common thread in all of these scenarios—human error. Trust but verify.
3) Fraudster Alert. Not Balancing and Reconciling Financial Accounts.
This can turn into a HUGE issue. This is a recipe for fraud on a grand scale. Its just like if you didn’t conduct inventory of products for sale on a daily/weekly/monthly basis. Stuff disappears. And so does money if you are not watching.
4) You think you can figure out the problem?
We run across this problem all the time. Here is some advise. Do what you do best and hire a trusted and seasoned accountant who understands your business. If you are a real estate professional, do real estate. If you are a contractor, do construction. Let experts handle your accounting and bookkeeping needs.