7 Bookkeeping Mistakes Costing You Time & Money (and How to Fix Them)

Bookkeeping is the backbone of any healthy small business. Let’s walk through the 7 most common bookkeeping mistakes and tips to fix them.

1. Skipping Regular Reconciliation

The mistake: Letting bank and credit-card statements pile up for months.

Why it hurts: Unreconciled accounts hide errors, duplicate expenses, or even fraudulent charges.

How to fix it:

• Schedule a weekly 15-minute block to match every transaction.

• Use your bank’s CSV export and import it directly into your bookkeeping software.

• Flag discrepancies immediately and resolve them before they snowball.

2. Mixing Personal & Business Expenses

The mistake: Paying for a personal lunch or subscription from your business account.

Why it hurts: It muddles your financial picture, complicates tax deductions, and can trigger red flags in an audit.

How to fix it:

• Open a dedicated business bank account and debit card.

• Record any personal withdrawals as a “shareholder draw” or owner’s loan.

• Clearly note personal vs. business in your expense tracker.

3. Forgetting to Track Receipts

The mistake: Tossing paper receipts into a drawer or letting digital receipts slip through the cracks.

Why it hurts: Lack of proof for deductions can cost you write-offs or trigger IRS penalties.

How to fix it:

• Use a mobile app (e.g. Receipt Bank, Expensify) to snap and upload receipts instantly.

• Link each receipt to its expense in QuickBooks, Xero, or your preferred platform.

• Archive originals in a labeled envelope (or skip paper entirely with e-receipts).

4. Mis-Categorizing Transactions

The mistake: Marking office supplies as “utilities” or client meals as “marketing.”

Why it hurts: Your profit-and-loss report and tax return become misleading.

How to fix it:

• Create a chart of accounts that matches your industry needs.

• Review your categories monthly and recode anything that looks off.

• Use rules or tags in your software so similar transactions auto-categorize correctly.

5. Ignoring Depreciation & Amortization

The mistake: Treating large purchases (equipment, software licenses) as a single expense.

Why it hurts: You lose out on multi-year tax benefits and misstate your true monthly costs.

How to fix it:

• List capital assets in a fixed-asset schedule with purchase date and cost.

• Apply depreciation (MACRS or straight-line) over the asset’s useful life.

• Schedule a consultation at JasonBrettCPA.com.

6. Not Backing Up Your Data

The mistake: Relying on a single local copy of your bookkeeping file.

Why it hurts: A hard-drive failure or ransomware attack could wipe out years of records.

How to fix it:

• Move to a cloud-based solution (QuickBooks Online, Xero).

• If you prefer desktop software, schedule daily backups to Google Drive or Dropbox.

• Keep a monthly offline backup on an encrypted external drive.

7. Waiting Until Tax Season to Get Organized

The mistake: Racing to gather receipts and statements in March and April.

Why it hurts: You’ll pay a premium for last-minute bookkeeping help and risk missed deductions.

How to fix it:

• Set a mid-month reminder to catch up on your books by the 5th.

• Run quarterly mini audits of your P&L and balance sheet.

• Visit JasonBrettCPA.com and schedule a consultation.

Conclusion

Avoiding these 7 mistakes will save you headaches, sharpen your financial insights, and maximize your tax savings. Good bookkeeping isn’t just about compliance it’s the engine that powers growth, so you can spend less time digging through paperwork and more time growing your business.