Does managing your business each day feel like you’re riding a roller-coaster? Yes, starting a business can be exciting–the thrill of your first sale, the rush of landing a big client! But then, over time, you realize you have to track every single penny. Enter bookkeeping!
Did you spend your entire weekend trying to figure out whether the $12.79 charge on your business card was for buying printer ink or a burrito? If yes, then by now you know how important bookkeeping is in your business.
Let’s help you discover simple and effective ways to streamline your bookkeeping and also save you time. Listed below are the 5 biggest mistakes entrepreneurs make when managing their books and we also tell you how you can dodge those mistakes like a pro.
Mistake #1: Mixing Personal Expenses with Business Expenditure
Not a big deal, you think. But, it becomes a big deal when you mix personal and business spending. So, for instance, you’re at your go-to coffee shop and you swipe your business card for that latte and avocado toast you had. You tell yourself, “I’ll sort it out later.” Now fast-forward to tax season, and your accountant is staring at your statements like they’re a cryptic crossword puzzle. “Why,” they ask slowly, “does your ‘office supplies’ category include seven charges from ‘Bean Haven’?”
Yikes.
Mixing personal and business spending is like tossing your clean laundry into a muddy puddle–it just makes everything messy. And you’re not alone: 23% of small biz owners do this, turning tax time into a horror movie.
Fix It Fast:
Open a separate business bank account. Treat it like your work BFF. Only hang out with it during business hours. Grab a business credit card for expenses. Use bookkeeping software like QuickBooks to auto-sort transactions.
Mistake #2: Lost Receipts
We all do this. Shove receipts into our wallets and discover them a year later, all faded and unreadable. If you’ve made this a habit, it’s time you put an end to it, no matter how tiny the expense. “It’s just five bucks,” you think. But those $5 drips add up fast. Next thing you know, you’re missing out on tax deductions, and your cash flow has dried up. Almost 82% of small businesses fail due to cash flow chaos–and those lost receipts?
Fix It Fast:
Download expense management apps such as Expensify or Dext. Snap a pic of receipts immediately. Adopt a “no receipt, no reimbursement” rule. Do it even for your own purchases. Also plan weekly “finance dates” with your books so you know they are all up to date.
Mistake #3: Late Payments
So, you’ve successfully finished a project, sent the invoice, and now you’re in wait mode to receive your payment. But your wait has now gone into two months! Believe it or not but 39% of invoices are paid late.
Fix It Fast:
Use tools like HoneyBook or FreshBooks to auto-send polite-but-firm payment reminders to your clients. No more “pay whenever” vibes. Offer Venmo, PayPal, carrier pigeon—whatever gets you paid faster.
Mistake #4: Failure to Review Books
Here’s what happens when you turn your bookkeeping software into a digital shoebox for receipts. Before you know you’ve caused a cash flow crisis. Did you know, 29% of businesses fail because of shortage of cash? Try this and stop yourself from turning into a statistic.
Fix It Fast:
Block 30 minutes weekly to review all your profit/loss statements. Obsess over three numbers: cash flow, outstanding invoices, and profit margins. If you think this is not your cup of tea, hire a bookkeeper to translate “accountant-ese” into human language.
Mistake #5: The DIY Approach
When you’re just starting out in your new business, it’s understandable that you adopt the DIY way of bookkeeping. But as your business grows and expands, you can’t spend 10 hours a month categorizing expenses. It’s like using a flip phone in 2025!
Here’s some math to explain this: 10 hours a month = 120 hours a year. That equals to five full days you could’ve spent scaling your business.
Fix It Fast:
Rely on Xero or Wave accounting software platforms. Next, hire a bookkeeper to manage all the complex stuff. And then, ask yourself, “Would I rather chase receipts or chase dreams?”
Let’s face it, bookkeeping will never be the highlight of your entrepreneurial journey. So, whether it’s tracking every penny, chasing invoices, or reviewing numbers regularly, let an experienced bookkeeper handle it. Maybe you can opt to hire a remote bookkeeper to manage your books. Why not outsource before you burn out? Free up your time so you can do what you actually love, like growing your business.
