As you already know, accounting is the art of measuring, communicating, and interpreting financial activities. In companies, accounting plays an important role in measuring, describing, and providing certainty about financial information. The purpose of accounting itself is one of them to prepare accurate financial statements that are expected to help decision-makers in determining the most appropriate policies. If you need qualified and good accounting services, just visit https://www.boydassociates.com.au/.
Although the purpose of accounting is clear and important, it does not mean accounting is an easy thing to do. In fact, it is very possible that a number of problems occur in accounting. Accounting problems often occur because of neglect or ignorance carried out by a number of parties in the company. Of course, the impact can be very big for your company. Here are some accounting problems that often occur and you should know!
It is not enough to carefully store proof of transactions
Not a few business owners who do not carefully store proof of transaction or business expense receipts. In fact, these failures can lead to tax, accounting, and company cash flow problems. Although it sounds trivial, proof of the transaction is very important for your accounting activities. Remember that receipts and notes can be valid proof when there is a difference in the numbers when checking your company’s financial statements. Receipts and notes are also very useful and reliable to facilitate the audit and taxation process.
In business, getting paid is certainly one of the most exciting things. However, you must be careful enough to track your business receivables. When you issue an invoice, that means the receivables will be recorded and the customer owes you money. When the debt is paid, the invoice status will change to paid. This receivable calculation process must be clear so that your business profits run smoothly.
The problem is, the company’s accounts receivable calculation doesn’t always run smoothly. Sometimes errors can occur in recording receivables and you do not have enough time to fix them. Accounting problems relating to company receivables must be resolved precisely and accurately so as not to cause financial losses to the company or business that you run.
Makes reports only as records
For some business people, accounting might only be seen as a process of recording company financial data. Its function is no more than calculating company balances or taxation interests. In fact, accounting has a greater role. Financial statements are able to present a variety of information that can be taken into consideration in decision making. Making decisions and determining business development strategies that look in the financial statements certainly enlarge the potential for developing your business.
Accuracy is the most important thing in the accounting process. Moreover, accounting provides financial information for your company, so that inaccurate data will certainly harm you. Mistakes when counting can not only occur to entrepreneurs but also experienced accountants. Errors of arithmetic may occur when accountants are in a hurry or are tired so that they are unable to detect arithmetic errors.
You should not underestimate this arithmetic error. Because if mistakes when counting are combined with errors when input and reconciliation, it will be a big mistake against the company’s financial statements. If the error is not known in a period of time, months, for example, it will trigger a much more complex problem. More complex problems will certainly make the process of repair and resolution more difficult to do.
Error writing decimal
This one accounting problem might occur if you still use the manual recording. For example, suppose you want to write 1,000,000, but you write it wrong to be 10,000,000. Of course, this decimal writing error will greatly affect your financial statements. Therefore, you must pay close attention to writing decimals so as not to repeat errors that can cause data errors in the financial statements.
Avoid a number of accounting problems that often occur as mentioned above to produce accurate and accurate financial statements. May be useful!