Common Accounting Errors In The Service Business
2020, for most, has been hard on the finances due to many uncontrollable factors, and our accounting books don’t fail to show the same. However, no matter how cautious one is in regular life. There are some accounting errors faced by field service businesses that end up being very costly if not rectified timely.
If your service business is going through the same and looking for solutions to make the best out of the available resources, you are at the right place!
The steps are divided into three parts:
#1 Misplacement or Duplication of Invoices
For starters, considering a technician whose work-hours are on the field, it is not hard to imagine him or her misplacing the invoices. With driving to-and-fro for numerous jobs, there could be disorganization in managing paperwork. Losing record of billing and invoices could further end up being expensive for the business and mislead the year-end figures. Along with the same, duplication of invoices could lead to incorrect calculations and transfers.
#2 Errors in accounting for Taxes
Another common mistake comes down to the errors in taxes. Quarterly estimated payments for taxes are to be made by the service contractors depending on the income. Thus, keeping an accurate record of income and expenses is crucial. Things may vary from state to state, as one might be responsible for collecting and paying sales tax for each job in some states. With the numerous responsibilities at hand, the omission in applying sales tax is not surprising.
#3 Skipping Tracking of Indirect Expenses
The next in the list is not tracking miscellaneous expenses. In everyday operations, numerous indirect costs like fuel for trucks, material, vehicle leases, equipment, and so on need to be accounted for regularly. Not only it helps service businesses to measure profits accurately but realize the cash flow in the business.
#4 Inaccuracy due to Double Entry and Manual Work
Apart from these mistakes, for the businesses who are dependent on paperwork or excel sheets, the process becomes even more chaotic. Duplication of efforts due to double entry and manual handling of work makes it a tiresome job. The crashing of unsaved excel files might take away your hours of labor with it. As manual work is open to higher chances of making mistakes, even every yawn might cost you dollars!
Now, how can these issues be solved?
The short answer is — Cloud-based accounting software
To make sure the misplacing of invoices is not affecting your business, move all your invoices to cloud-based accounting software. It will not only eliminate the paperwork but provide access to all the invoices on-the-go. Thus, make way for peace with online invoicing!
Accounting software will also eliminate the errors in taxes as you can automatically apply sales tax to a job. For a defined sales tax process, the software will allow you to set sales tax rates and taxable sales items, which would help to track liabilities. It also eases up tracking the income and expenses.
Lastly, coming to tracking the miscellaneous expenses, cloud-based software would help your service business manage all your expenditure in one place. It will allow you to be in touch with the current financial position of your business and timely track the money in the bank.
With every mom and pop shop and the advancement in the technological space, every service business needs to keep up with technology to run the race. When it comes to choosing the accounting software for your service business, QuickBooks, without saying, has become the standard for the industry. Even while selecting a field service software to streamline the overall business operations, QuickBooks integration is a must-have!