5 Accounting Mistakes SMEs Should Avoid

5 Accounting Mistakes SMEs Should
Avoid :
When you started your own business you started with passion and
determination in your mind. As an entrepreneur you may have more
important things to do than accounting. However accounting still
remains the integral part of your business. Investing in your
company’s accounting needs should be considered critical. A messy
book of accounts or accounting done with cheap resources could
prove to be more problematic in future. It could cause hindrance in
growth of your business or all together closing your company. Below
are 5 mistakes which you can avoid by being mindful and cautious to
be one of the Best Accounting Outsourcing Companies in Dubai.

1. Avoid cheapest available resource
• Well, well, well accounting skills is not something which you
can pick up on a sale from supermarket. While you can
always find affordable options but be mindful of what you
get. Many businesses have receptionist, spouse, sales
person etc doing their accounts or hire an accountant
which charges less salary as his/her accounting skills are
very minimum. This could lead to many financial dents in
future. Try to see what an optimum salary for accountant in
market and find a decently experienced accountant
depending on your business scale. If hiring is an expensive
or not possible option (have space constraint for
accountant like a salon business) then try outsourcing it to
a accounting firm.

2. Avoid writing your own accounts
• As we said earlier that as an owner you have
much bigger and much more important things to
do then writing your own accounts. If an owner
decides to write his/her accounts most of time
it’s not done at all or done in a very partially
manner. From costing point of view also it’s very
inefficient. If an owner spends his precious
towards developing his/her business it’s much
valuable then writing accounts which could be
done or outsourced at a much cheaper price.

3.Try not to mix business money with
personal money
• This is easier said than done. It is very convenient thing for an
entrepreneur to mix business and personal money. In early stage of
business money flows from owners personal account to business
account and in later stage of business it is other way round (talking
from our experience). All entrepreneurs know that they should
have a company bank account and all the business related
transactions should be done from that, but how many actually
follow it? Well if you have a good accountant (here we mean pushy
and tough) accountant he/she will make sure you follow this basic
rule. The benefits reaped are correctly done accounting and clear
view of your cash. More on benefits of correctly done accounting in
our future article.
•

4.Use appropriate software for doing
accounting
• At different stages of your business you need different tools to run
your business efficiently. Accounting software is one of them. A
giant retail company could be using very expensive high end erp
software but the same software could be of no use to a multi chain
restaurant. As an entrepreneur you need to identify your needs and
pick appropriate software. Xero, Quickbooks, Zoho books, Tally,
Wave, Sage are few of the popular options used for accounting.
Excel is a great tool and used by many accountants worldwide but
not for accounting certainly. It is doesn’t have a double entry
system which is basic and bare minimum for accounting system. We
prefer cloud based accounting system for being Accounting
Outsourcing Companies in Dubai due to it’s many advantages over
desktop based accounting software. More on benefits of cloud
based accounting software in our future articles.
•

5.Remember to record your petty cash
expenses
• Small expenses done for company are simply ignored by owners.
They spend from their pocket and forget to record it. These
expenses may seem small to worry about but if you see your yearly
petty cash expenses it would be a decent amount which you as
owner should be aware about. Also theses expenses could be part
of your tax returns which you may miss out claiming if you have not
entered in accounts. So this is clearly loss of money. Would like to
add one more step here. Match your actual bank balance with
accounts bank balance. This is called reconciliation of bank balance.
There could be many small expenses for which you paid from your
bank. Matching the balance ensure that you record all your bank
transactions so that even smallest expenses are not missed out.
•

• Investing in your company’s accounting needs
should be considered critical. We
as Accounting Outsourcing Companies in
Dubai provides Cloud Accounting Services and
also believe that every business need to have
a proper accounting function to make
informed business decisions.