After working with business owners for 20 years, we at SBS have seen certain accounting mistakes surface again and again. These patterns often come to light only after the mistake has caused financial, tax, or operational problems – and we want to make sure your business is not falling into any of these bad habits.
One of the most damaging mistakes is co-mingling personal and business expenses. This can take the form of running personal purchases through the business, paying business expenses from a personal account, or generally treating the company’s bank account as interchangeable with personal funds. (No, you can’t expense your child’s tuition as a business expense. Yes, we had a client try to do that one time.)
Beyond creating messy books, mixing expenses can weaken liability protection, complicate tax reporting, and make it far harder to understand how the business is actually performing. In some cases, it can also raise red flags with lenders, investors, or the IRS.
Another costly issue is relying on cheap accounting solutions under the assumption that “accounting is accounting.” We’ve seen businesses choose the lowest-cost option early on, only to discover years later that their records were incomplete, inconsistent, or flat-out wrong. One client was using software that couldn’t even produce balance sheets when they came to us – made even worse because they had been expensing items that should have been capitalized. Fixing these kinds of issues after the fact is almost always more expensive than doing it right from the start.
A closely related problem is not reviewing financial reports in a timely manner. Even when bookkeeping is technically being done, many owners don’t look at the numbers until tax time or only when something feels wrong. When reports aren’t reviewed regularly, small issues quietly grow into larger ones. Missed trends, incorrect balances, and unnoticed errors can all accumulate long before anyone realizes there’s a problem.
We’ve also seen issues when owners are unresponsive to their bookkeeper or accountant. Requests for clarification, missing documents, or approvals often sit unanswered for weeks. Over time, this slows down reporting, increases the likelihood of assumptions being made, and reduces the usefulness of the financials. Accurate accounting is a two-way process, and responsiveness plays a bigger role than many business owners expect.
Another common error is thinking that a credit card statement serves as a receipt. While a statement shows where money was spent, it usually doesn’t provide enough detail to support deductions, especially for meals, travel, or mixed-use expenses. Without proper receipts, businesses can lose legitimate deductions or struggle to substantiate expenses during an audit.
Finally, many of these mistakes are made worse by not saving receipts at all. Even businesses with good intentions often fall behind on documentation, especially during busy periods. Over time, missing receipts erode the quality of the books and limit how defensible the numbers really are.
Most of these mistakes don’t come from carelessness. They come from running a business without clear systems, timely visibility, or the right level of accounting support as the business grows. This is where having the right processes—and the right advisors—can make a meaningful difference.
Running a small business is hard. You need accounting and advisory services so you can enjoy your business again and get back to what you do best. We’re ready to help. Contact us at help@sbsaccountants.com or 770-745-4283.