Bookkeeping Mistakes - and how to avoid them
Most often, as a founder, your core focus is on product development, sales, and markerng. But it’s easy to forget that there are costs associated with these activities, which need to be monitored regularly through bookkeeping to make smart, informed decisions.
Ignore it for too long, and you could face cash flow crises, funding challenges, and even penalties if your filings are not up to date.
Here are our top 10 bookkeeping mistakes founders make - and how to avoid them
1. DIY Bookkeeping
The mistake: "I'll just do it myself," you said. "How hard can it be?" Turns out, harder than it looks. Small errors add up fast.
How to avoid it: Use tools like Xero, QuickBooks, or NetSuite, or hire a part-time bookkeeper. A few hours a week can keep your books in shape and your stress levels low.
2. Mixing Business and Personal Expenses
The mistake: Using the same bank account for your startup and your take out orders. It makes tracking a nightmare and tax time worse.
How to avoid it: Open a dedicated business bank account from day one. Keep it clean and separate. Your future accountant would thank you!
3. Not Reconciling Bank Accounts Weekly
The mistake: Accidentally paying the same invoice twice - or missing a payment altogether.
How to avoid it: Link your bank to your accounting software and reconcile weekly. It takes minutes and saves money.
4. Ignoring Unpaid Invoices (Aged Receivables)
The mistake: Clients "forget" to pay you, and you forget to chase them. Result? Cash gets tight.
How to avoid it: Set up automated invoice reminders in your accounting software and review receivables monthly.
5. Misclassifying Expenses
The mistake: Recording a laptop as a regular office expense instead of a fixed asset. Or logging an annual software subscription all in one month.
How to avoid it: Hire an accountant or bookkeeper who knows how to categorize things correctly. Clean books = accurate financials.
6. Delaying Bookkeeping Until Year-End
The mistake: "I'll deal with it when tax season comes." Fast forward: receipts everywhere, numbers
missing, panic sets in.
How to avoid it: Do a little each week or hire someone to keep things updated. Year-end should be smooth, not stressful.
7. Ignoring Cash Flow
The mistake: Your P&L looks great, but your bank balance is dangerously low.
How to avoid it: Monitor your cash flow monthly and create short-term forecasts (3–6 months). It helps you spot problems before they hit.
8. Mishandling Payroll and Taxes
The mistake: Confused about how to handle bonuses, holiday pay, or statutory leave - and then getting payroll wrong.
How to avoid it: Use payroll tools like PayFit or Pento, or outsource it completely. Payroll compliance isn't optional.
9. Forgeting to Track Reimbursements
The mistake: You or your team pay for business stuff out of pocket and forget to log it. That's free money left behind.
How to avoid it: Use tools like Expensify, Ramp, or even a shared spreadsheet to track reimbursements.
10. Not Saving for Taxes
The mistake: Spending every bit of cash and then realizing taxes are due next week. Cue panic.
How to avoid it: Set aside a tax reserve every month in a separate account. Your future self will thank you.
Final Thoughts
We know - you're a product builder, a visionary, maybe even a coding machine. You're not a finance nerd, and that's perfectly okay.
But ignoring your books won't make the problems go away — it just makes them more expensive later. It’s okay to ask for help. You don’t need a full-time CFO or fancy finance team. Sometimes all it takes is the right tool, a few hours of support each week, or a part-time bookkeeper who knows their stuff.
Stay consistent, keep things clean, and don’t be afraid to delegate. Because a well-run business isn’t
just about users and features — it’s also about knowing where your money is going.
You've got the vision. Let the numbers back you up!
