Running a small business comes with enough challenges—your accounting shouldn’t be one of them. Yet, many business owners unknowingly make financial missteps that can affect their growth, tax compliance, and long-term success. At BM Accountancy & Advisory, we help ambitious businesses stay financially fit from day one. Below, we’ve outlined five of the most common accounting mistakes and how to avoid them.
1. Mixing Personal and Business Finances
It may seem harmless to use the same bank account for both personal and business expenses—especially when you’re just starting out—but this habit can quickly lead to confusion, missed deductions, and messy records.
How to avoid it:
Open a separate business bank account as soon as possible. Use it exclusively for business income and expenses. This not only simplifies bookkeeping and tax preparation, but also presents your business more professionally.
2. Poor Record-Keeping
Many small business owners wait until year-end to sort through receipts, invoices, and bank statements. Unfortunately, poor or inconsistent record-keeping can lead to costly errors, missed opportunities for tax relief, and even penalties.
How to avoid it:
Stay consistent—record income and expenses regularly. Cloud-based accounting tools (like Xero or QuickBooks) make it easier than ever to keep your records clean and accessible. Or, better yet, outsource your bookkeeping to a professional so you can focus on growing your business.
3. Not Setting Aside Money for Taxes
It’s easy to forget that not all the money in your business account belongs to you. Failing to plan for tax obligations is one of the fastest ways to run into cash flow problems.
How to avoid it:
As a rule of thumb, set aside 20–30% of your profits for tax. You can also set up a separate “tax savings” account and transfer a portion of your income there each month. An accountant can help you estimate how much to save based on your business structure and earnings.
4. Failing to Track Cash Flow
Profit doesn’t always mean cash in the bank. Many profitable businesses struggle—or fail—due to poor cash flow management. If you’re not tracking how and when money moves in and out of your business, surprises are bound to happen.
How to avoid it:
Monitor your cash flow weekly or monthly. A good accountant will help you create cash flow forecasts so you can plan ahead, make informed decisions, and avoid sleepless nights.
5. Trying to DIY Everything
It’s tempting to do your own accounts to save money, especially in the early stages. But accounting involves more than just data entry—it’s about strategy, compliance, and insight. One small mistake could end up costing more than hiring a professional in the first place.
How to avoid it:
Understand your limits. Delegate the numbers to a trusted accountant who understands your goals. At BM Accountancy & Advisory, we act as more than just number-crunchers—we’re growth partners for clients who want to build something lasting.
Avoiding these five common mistakes can put your business on stronger financial footing and free up more time to focus on what you do best. Whether you’re just starting out or scaling up, having the right support in place makes all the difference.
Ready to get it right from the start?
Get in touch with BM Accountancy & Advisory for expert, down-to-earth accounting that understands your ambition.
