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Are You Making These Five Common Accounting Mistakes?

Erin Baas, Client Advisory Services Director
February 23, 2017
Are You Making These Five Common Accounting Mistakes?
You’re busy running your business and handling your finances. Bills are getting paid. Invoices go out, and you receive payment for them. Employees collect their paychecks on time, and you’re up to date with payroll taxes. Your accounting operations seem to be running smoothly. But are they? Just because the day-to-day stuff seems to be working nicely doesn’t mean you’re not missing some of the big-picture problems. Here are five questions to ask yourself.

1. Are you running critical financial reports regularly?

If you’re doing your accounting work manually, this will be challenging. But you need a way to keep a close eye of things like aged payables and unpaid invoices. As you grow, this will become even more important. Accounting applications make it easy to create such reports. Still, there are complex reports like Profit & Loss and Balance Sheet that should be generated periodically, especially if you need to deal with investors or financial institutions. An accounting professional can create and analyze these.

2. Are you using an accounting application that “fits” your business?

Accounting software or a cloud-based solution should meet your needs easily and accommodate expansion by integrating add-ons or moving up to a more sophisticated application in the same family.

3. Are you using the tax structure that best matches your company?

If you launched your business on your own, you probably called it a sole proprietorship. But maybe it should have been a Limited Liability Corporation (LLC). If you started out as a larger organization, did you designate your company as a corporation or a partnership? Your choice in both these cases has great impact in two areas primarily: taxes and liability.

4. Are you keeping your business plan updated?

If you don’t have one, think seriously about assembling one. Business plans contain multiple written sections, but also incorporate historical and current financials, as well as projections. Like standard financial reports, they’re usually required by banks or investors. They can be of great value to you, too, as you plan out your company’s future. And they should be evolving documents. Revisit yours periodically.

5. Are you doing your own accounting work and neglecting business management tasks and planning?

Many entrepreneurs fall into this trap. They don’t want to lose control of sales and purchases, so they hang onto the accounting work and don’t leave themselves enough time for running the business and planning for its growth. You started a business because you had an idea for products or services that would solve professional and/or personal problems. And you’re the best person to see that your business thrives. If you see yourself in any of these five scenarios but don’t know what your next steps should be, we can help. Contact us, and let’s explore how we might work together to tackle these or any other accounting problems that are keeping you from accomplishing your company’s mission.
  • Relator, Analytical, Achiever, Deliberative, Futuristic

Erin Baas

Client Advisory Services Director

Erin Baas, Client Advisory Services Director, began her career in 2002. She has developed comprehensive expertise in outsourced accounting and business consulting throughout her time in public accounting. 

Leveraging her expertise in business advisory services, Erin focuses on private physician medical practices and family office administration. She provides comprehensive financial reporting, budgeting, forecasting, and practice benchmarking solutions. Erin values serving as a true business partner to her clients, helping them develop and implement strategies that drive operational success and sustainable growth. 

 

At Lutz, Erin's ability to relate to clients and her deliberative nature make her an exceptional advisor. She builds lasting relationships while taking a thoughtful approach to problem-solving, enabling her to craft solutions that address complex business challenges. 

 

Erin lives in Omaha, NE, with her two children. Outside the office, she can be found running, working out, enjoying the outdoors, and spending time with family. 

402.827.2045

ebaas@lutz.us

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