58% owners of new business owners never had experience of making financial plans and managing accounting books. This leads to decrease in company's profit and lack of effective future strategies and the result is that they are not able to make gain momentum for pushing there business towards success. So here are 5 typical reasons for occurrence of accounting errors that every business owner must know.

1. 5 Typical Reasons for occurrence of
Accounting Errors

2. Being a small
business owner, you
ought to eliminate
accounting book
errors. These errors
may happen in ledger
or any other
financial statement.
While recording the
financial transaction
in accounting books
these errors may
happens. These
errors can distort
true business
results.

3. So, these are the 5 reasons for inaccuracies in
your records.
1- When you skip small expenditures in account
2- Considering cash flow and net profit as same
3- Not reconciling your books and Bank
statements regularly
4- When you do not create financial budget
5- Spending overtime on accounting tasks

4. When you Skip small Expenditures in
Account
Sometime when you record
accounting, you can skip a
lot of small expenditure
amounts. Whenever you
miss to record common
business expenditures,
even minor ones, your
books are going to be off.
These books with errors
can lead to issues with
assessing profitability and
processing taxes.

5. Considering Cash flow
and net profit as same
Net profit and cash flow
both are related to earnings
and expenditures. However,
there exists a difference in
what net profit and cash
flow calculates.

6. Net Profit
After paying expenditures whether you make money or not,
the money you need for your business for a particular time.
Net Profit = Expenditures - Earnings
Cash Flow
Net profit calculated on a particular time period. The cash flow
calculates how rapidly money moves through your enterprise.
It calculates the in and out amount of money, ultimately you
know about the liquidity of your money.

7. Not Reconciling your books and Bank
Statement regularly
You have to reconcile your
books with your account to
ensure the balance of your
bank account statement and
accounting details match.
This process makes possible
to find errors.

8. When you do not Create Financial Budget
Many small business run
through cash problems at initial
stages of business. You should
arrange for earnings and
expenditures with a business
spending budget. With financial
planning, you can estimate the
spending amount whenever you
establish the business budget.
By using the past accounting
data, you can forecast your
earnings and expenditures for
long term.

9. Spending overtime on accounting tasks
As a small business owner, you
may feel as though you have to
do it all and handling of books is
time consuming. It is important to
leave these tasks when you get
tired and perform them with a
refreshed mind from where you
left. This will help in avoiding
mistakes.

10. One Stop Solution
You can hire an outsource finance and accounting service that
can give you accurate and timely reports of accounts. You
never need a full time accounting professional. Whenever you
file your tax return or perhaps extend your business, an
outsource accounting firms can certainly help you.