Accounting is much like a messy bedroom.

As small business owners we don’t have much time for accounting. If a client or customer needs something from us, accounting quickly is thrown aside.

Heck, if a customer doesn’t need something from us, we still throw accounting aside.

I’ve been in accounting for over 20 years. The past 14 years I have been bookkeeping for small businesses.

I see many small business owners making the same mistakes. Below is a list of the most common mistakes I have seen over the years.

1. Miscategorizing expenses: There are standard categories that are generally used in accounting. When you set up your accounting software you can select the Chart of Accounts that best fits your business.

Try to stick with those standard accounts. It will cut down on confusion for the bookkeeper and CPA. This will save time and money spent on the accounting professionals.

Also, be aware, if you are mis-categorizing expenses you could have an incorrect view of your books and, therefore, incorrectly report on your tax return. If you are unsure how to categorize something check with your bookkeeper or CPA.

2. Mixing funds: There are three important reasons why mixing funds is bad for your business.

First, you won’t get a true picture of your net income. Second, you won’t get the tax deduction for the expense. Last, but very important, if you are mixing funds you lose the protection of your corporation.

If something goes wrong with your business and you are not treating your business as a separate entity, no one else will either. It’s called piercing the corporate veil.

Protect yourself. Make sure you are not mixing funds between personal accounts and your business accounts.

3. Not keeping receipts: The obvious problem with not keeping receipts is for audit purposes. Another important reason to keep all receipts is for accurate bookkeeping.

Let’s say you have a contracting business. If there is a receipt to a home improvement store it could be categorized two ways. It could be a tool for your business. It could also be material for a job. To have accurate tracking of jobs, it’s important to keep all receipts. Just like mixing funds, if you don’t have your receipts you can lose that expense.

4. Not reconciling books: To ensure all deposits and expenses are entered into the books correctly it’s important to reconcile the bank statement each month.

Along with reconciling the statement it’s important to review your profit and loss and balance sheet as well. You will then begin to see patterns in your business, allowing you to make better financial decisions.

5. Not meeting with your CPA twice a year: As small business owners we don’t have a lot of time. So the thought of having another meeting with our accountant is not on the top of the list.

If you meet with your CPA mid- to end-of-year, you can get a good idea of your tax liability due at the end of the year. Your accountant can strategize with you. They can help ensure your business is moving in the right direction.

Don’t have any unwanted surprises at tax time. Take the time to meet with your CPA.

6. Doing it yourself: Small business owners can do their own books. The problem is, they don’t have time to do it. It becomes last priority and quickly falls behind.

Find a good bookkeeper and let them handle the books while you work on the business. We have all heard the saying “work on the business not in it.” This is a perfect example of that.

These professionals are here to help make things easier for you and your business. Do any of these accounting mistakes look familiar to you? If so, it might be time to get some help. Contact your CPA or a trusted friend for a referral.

I remember as a child my mom would come into my messy bedroom demanding I clean it.

I would, in the whiniest voice says, “But mom, that will take me all day.”She would always say, “If you just took 10 minutes a day and cleaned your room, you wouldn’t have this huge mess that takes hours to clean.”

Accounting is much like a messy bedroom. No one has time or wants to do accounting daily. It builds up and quickly becomes a dreaded mess.

Take the time. Clean your room.

Diana DeAndrea-Kohn is a small business owner and writer in Kirkland. For writing projects you can reach her at Diana@writingilluminated.com or www.WritingIlluminated.com.