SMS Marketing Blog

Common Accounting Mistakes

13th May 2010 - Posted by Sarah Magill in category Misc

It’s not rocket science, but Accounting does have the potential for a plethora of mistakes that could really harm your company. If you forget a decimal or just record the depreciation amount incorrectly, it can cost any enterprise a bundle of time and money. Some companies have a private accountant on staff and others hire a public accountant during tax season and at the end of accounting periods. Whatever you choose, just know that obtaining accurate financial statements is priceless.

For example, if the ending inventory was overstated in 2008 by $10,000, that value carries over to the next year. Even if the financial statements were prepared correctly in 2009, the mistake made in 2008 would carry over and continually create an imbalance in the statements. Sometimes inventory mistakes self correct in a few years, but you can see the impacts of a simple mistake can be quite harmful to the company.

On a more positive note, according to USA Today, firms are making fewer accounting mistakes than in previous years. Just 630 U.S. companies reported accounting problems serious enough to warrant a restatement. This is a 24 percent decline from the number of companies with accounting problems in 2008.

Here is a link to a helpful article about how to recognize discontinuities in your finances.