Unfortunately, many small businesses fail because the owners aren't financial professionals. You can have a great business idea, be a great leader, and get a wonderful business started, but if you aren't a financial professional with the skills to manage money, you might not succeed. This is why it's smart for small business owners to hire an accounting firm. Let's look at some common accounting mistakes small businesses often make without a CPA on their side.

1. Unreliable Bookkeeping

If you're not a professional CPA, you may not understand the importance of precise and accurate bookkeeping. Bookkeeping can't be an afterthought, and it can't be something that falls victim to procrastination. Bookkeeping is a full-time task, and you need the help of committed professionals to ensure you stay viable and profitable.

2. Confusing Cash Flow and Profits

This is another seemingly small detail that could have disastrous results. Profits can be calculated based on things that haven't actually happened yet. For instance, deals that will close in the near future. However, cash flow is the cold, hard reality of how much money you have access to. If you try to book profits that you don't actually have your hands on yet, it could create huge problems in the future. An accounting firm can help make sure you keep a realistic perspective on how much money your business has to work with.

3. Mixing Up Personal and Business Funds

There is sometimes the mentality that if you own the business, then all the money is yours. Although that might be legally true, if you ever want your business to succeed, you absolutely can't think this way. If you start blurring the lines between the two, it'll be much too easy to lose sight of what's what. An accounting firm can help you keep these lines clear and easy to follow. Being responsible with your company's funds is the first and biggest step to economic success.

This is only the tip of the iceberg. Did you know that over one-third of small businesses pay over $5,000 per year to administer their federal taxes, according to Fit Small Business? If you need help with bookkeeping for income expense tracking, monthly end-of-year tax calculations, and much more, contact Brittany L Montrois, CPA, PC today.