5 Revenue Accounting Mistakes You Don’t Want to Make

Many people think that accounting is boring and fail to appreciate just how much value it creates for the modern world. In the United States alone, the market for the accounting industry is worth more than $119 billion every single year!

Of course, there are a lot of common revenue accounting mistakes that detract from the value of proper accounting. Avoiding these mistakes can mean saving your company a lot of stress, time, and even money.

So just what are these common revenue accounting mistakes and how can you avoid them? Read on to learn all about the most common revenue accounting mistakes!

1. Keeping Records Incorrectly

Many people fail to keep records correctly because they do not find the work very interesting. Even modern digital filing techniques, which have made the whole process much more convenient, have failed to make the process interesting for most people.

If you end up in a tax audit, it is absolutely essential that you have all of your records on hand. Your receipts and other records need to be organized so that you can find them if you ever need to prove that you have been conducting yourself appropriately.

2. Few Checks and Balances

In some businesses, especially small ones, a single person is in charge of all financial matters. Unfortunately, that means that there is a single point of failure. Checks and balances are important to make sure that everybody is doing their absolute best to engage in accounting with integrity.

Setting up checks and balances can help everybody feel at ease about the integrity of accounting decisions.

3. Fiddling With Closed Periods

It is important not to mess around with closed accounting periods. Once they are closed, the data in them is used to inform financial statements and other official documents. Changing them can cause disagreements in your records and statements.

4. Falling Behind on Bank Reconciliation

It is important to reconcile bank and credit card statements regularly. Although this can be tedious, it has to be done over and over again to avoid serious errors. Don’t think that you can skip it without exposing yourself to problems down the line.

5. Exaggerating Revenue

There is a long list of reasons that people can accidentally overstate revenue. For example, people can mix up received revenue with accounts receivable. Whatever the reason, a lot of people accidentally overstate revenue.

Look at every category of transaction that could be mistaken for revenue. Make sure that everybody understands what counts as real revenue and what does not.

The more you learn about the most common accounting mistakes and business accounting errors, the more interested you might be in finding small business accounting solutions for payroll mistakes. To learn more about how to manage cash flow mistakes and other common errors, click here.

Avoid the Most Common Revenue Accounting Mistakes

We hope that you were able to learn something helpful from this short piece on some of the most common revenue accounting mistakes that you would want to avoid in your business. Although it can take a long time to learn all of the nuances of proper accounting, doing so is an investment in your future business success.

To keep up-to-date on the latest developments in business, finances, and more, take a look through our other articles!