Accounting is an essential pillar for any SME. However, many managers make mistakes that can have significant tax, financial or legal consequences. Here are five common mistakes to avoid and best practices to adopt.
1. Mixing business and personal expenses
Many entrepreneurs use the same bank account for both personal and business purchases. This complicates management, distorts the interpretation of results and can cause problems during a tax audit.
Best practice: open a separate business bank account and strictly separate cash flows.
2. Postpone accounting entry or invoicing
Keeping accounts ‘at the last minute’ or delaying invoicing leads to errors, missed payments and a distorted view of cash flow.
Best practice: set up regular monitoring (weekly or monthly) of accounting entries and invoice as soon as the goods are delivered or the service is provided.
3. Neglecting VAT
VAT is often a source of errors: failure to declare, incorrect rates applied or incorrect deduction of expenses. Tax adjustments can be costly.
Best practice: systematically check the applicable rates, anticipate deadlines and use software that automates calculation and reporting.
4. Forgetting to monitor cash flow
Many managers confuse profit with cash flow. A profitable company can find itself in difficulty if it does not monitor its cash inflows and outflows.
Best practice: draw up a cash flow forecast and update it regularly to anticipate financing needs.
5. Neglecting to file supporting documents
Losing invoices or receipts causes difficulties when doing your accounts and may call into question the deductibility of certain expenses.
Best practice: adopt a paperless solution and store each supporting document in an organised manner (secure digital filing).
Conclusion
Avoiding these five mistakes not only ensures compliance with legal obligations, but also provides reliable financial information for managing your business. Well-maintained accounting is a management tool, not just a constraint.
29th August 2025