Tue. Jun 18th, 2019

10 Things Not to Do in a Small Business

Again and again, we not only getting absurdities from the bookkeeping but also untruths which entrepreneurs spread or catch at the regulars’ table. I would like to make a small list and clear it up. What you should avoid with your bookkeeping, I would like to explain briefly in the following points:

1. Hand in Dirty Documents or Folders

Under no circumstances should you expect your administrator to handle dirty accounting folders or filthy accountant’s files.

With such dirty files, you only achieve one thing: the clerk is disgusted by them and then makes mistakes that you as an entrepreneur have to pay for. So, simply buy a clean folder and you can also save taxes. The excuse: “I work on the construction site or in a car repair shop” doesn’t count either, because nowadays you can wash your hands before you start working in the office, so that doesn’t happen.

dirty file folder

2. File All Documents in Transparent Foils

A grey for every accountant, first remove all documents from the transparent films, label them and then file them back into transparent films. What’s all this about? If you punch your documents correctly (note error no. 4) and stapled them, you can save the transparencies. Not only the clerk can work faster but also the entrepreneur finds his documents faster later. Nobody even thinks about shrink-wrapping pictures in a photo album and then entering them into the family album, right?

3. Stapling Invoices and Receipts Together Unnecessarily

This can also be very annoying, not only for the accounting clerk. Many entrepreneurs would simply have a lot of invoices together. Either with a stapler (also known as a spider monkey) or with paper clips. This is where the trouble begins because before you can really get started, you have to free all documents from each other. This, in turn, costs time, which ultimately the entrepreneur has to pay monthly.

4. Punching and Filing Accounting Documents on the Wrong Side of the Page

Perforate either on the short side or on the right long side and file incorrectly. The operator must either constantly turn his head in order to be able to read or must first punch all the documents again, file them correctly, in order to then be able to work properly. If the entrepreneur does this work right from the start, both sides save time and money.

How do you punch right?

Rule 1: The page must always be turned so that you can read the writing on it from top to bottom. Thus no turning of the head is necessary.

Rule 2: If rule number one is followed, holes are always punched on the left side of the page. That’s it, that’s it.

Please do not punch anything away. This means that they only lose money themselves if the clerk or the tax office’s tax audit can no longer recognize certain figures or data. So, look properly before punching.

5. Use Thermal Paper

Those who file receipts in their bookkeeping that have been printed on thermal paper run the risk of numbers and information being removed in the course of time, making the receipt worthless.

6. Hand in Documents in a Shoe Box

A big mistake when you consider that all documents, invoices, and receipts are sorted and not punched and handed over to the tax consultant or accountant. Surely everyone can imagine that the responsible clerk has to spend a relatively long time to sort out the mess in the shoe box. By the way, a shoebox is not always used, sometimes only a single transparent film, a single folder or the documents are filed on a filing strip. The shoe box is certainly the most extreme thing that can happen at this point.

Bookkeeping in a shoe box
Tip: Delivery notes, offers, order confirmations, transfer slips, correspondence, correspondence mail does not belong in the bookkeeping unless they are absolutely necessary to explain a business transaction. They must nevertheless be kept in the documents of the entrepreneur.

Many entrepreneurs make this mistake because they either have no time or no idea what they are doing. Talk to your tax advisor about which documents are superfluous in your bookkeeping, where both you and the clerk can save time in the future.

7. Notoriously Submit Invoices and Other Supporting Documents Too Late

If you hand in your documents every month at the last minute or even a few days or weeks too late, you cannot expect the clerk to start work immediately. In addition, you will always be bombarded by the tax office with late payment surcharges, which can be quite expensive in the long run. So if you have too much money and no time, you can continue this game. For all others, it should be a matter of course as an entrepreneur to prepare and submit the documents at an early stage.

8. Submit Incomplete Documents

In the long run, this group can also cost the tax consultant or accounting clerk some grey hair and nerves. You think everything is complete and you can start working, the door opens and someone hands over further documents, invoices or corrects documents that have already been handed in. The clerk will, of course, take all this information into account, but this is not optimal in terms of time, which is once again reflected in the costs for bookkeeping at the entrepreneur.

A way out:

The entrepreneur should take at least once a month the time to work through his documents completely, to sort them and to prepare them in such a way that the accounting clerk can work through them from A to Z in one go. That’s how much time you need, no matter how busy you are. It simply belongs to it. Nobody is perfect and everyone forgets something.

sad businessman

9. On a Cash Receipt Many Different Bookkeeping Procedures

While shopping privately in the supermarket, you discover that you need a few things to run your business. So put everything on a receipt, mess it up and then pay all at once with the Opens internal link’s EC card in current window business accounts.

Receipt with several bookings
Picture: Cash receipt with several bookings
Thus a series of bookings arise with a cash receipt, which could have been avoided. So office supplies, small appliances, representation costs, advertising and the rest of the amount is finally a private expense, which must also be booked because the whole was paid via the business account, so the balance must be right. Thus with a cash receipt with under up to 10 single bookings with euro amounts which can be calculated individually can develop, which must be seized also all individually in the PC with the bookkeeping software. Thus you drive your clerk in the bookkeeping or in the tax office without seeing it yourself into the madness. If you as an entrepreneur are also subject to turnover tax, the individual items on the sales slip must be sorted according to tax type. This sometimes results in additional bookings, because milk for the office is taxed at 7% and cola or multivitamin juice at 19%. So the clerk has all beverages für´s office available (is recorded on a booking account), but he must nevertheless carry out two bookings due to the tax types. Noooooooo, please never do that!

Way out:

In any case, divide private and business and buy separately. Of course, this can happen shortly one after the other, if you first put your private purchases on the tape at the cash desk and pay. Then pay for the business things. In addition, it saves work in accounting if you don’t pay for private things via the company’s business account, but only pay for business expenses with the company’s EC card.

10. Want to Cheat, if One has No Idea

You should avoid regularly hiding invoices and expenses in your accounts which are very obviously private expenses for the clerk. These are, for example, regular gifts to business friends, flowers or flower gifts, regular hospitality from suppliers and customers (unfortunately even on Sundays). Diesel bills, even though your company car has a petrol engine or company parties, even though you work alone in the company. All these are typical mistakes of beginners, who want to generate operating expenses, by all means, reduce their profit and thus save taxes.

But: Every blind person and reasonably experienced accountant or clerk recognizes such attempts immediately. If even the apprentice of the tax consultant recognizes such stupid attempts of tax evasion, you can assume that the tax inspector of the tax office also finds out these false calculations during a tax audit. So don’t even try and save yourself the time. It could also be embarrassing.

Final Remark

There is no ranking, the order is arbitrary. The enumeration is also not exhaustive. Most tips lead to enormous time savings.