5 Common Bookkeeping Mistakes Small Businesses Make (and How to Avoid Them)

Bookkeeping isn’t just about keeping HMRC happy — it’s about giving you a clear picture of how your business is really doing. But many small business owners make avoidable mistakes that can cost time, money, and peace of mind. Here are the most common ones I see:

1️⃣ Mixing business and personal expensesUsing the same account card for everything creates a nightmare at year-end. Tip: Open a dedicated business bank account and keep transactions separate.

2️⃣ Not keeping receipts and invoicesDigital copies are fine (HMRC accepts scanned receipts). Tip: Use an app or cloud accounting software to store them as you go.

3️⃣ Falling behind on record-keepingWaiting until year-end to update books leads to errors and stress. Tip: Schedule a regular “money hour” each week to stay on top.

4️⃣ Misunderstanding VAT rulesFrom thresholds to reclaim rules, VAT mistakes are costly. Tip: Speak to an accountant before registering – and use software that handles VAT correctly.

5️⃣ DIYing everything without guidanceSpreadsheets can work for a while, but as your business grows, they often lead to mistakes. Tip: Investing in bookkeeping support saves you money in the long run.

✅ Getting these right early on makes your finances cleaner, helps with cash flow, and saves on accounting costs.

👉 Curious – which of these have you struggled with in your business journey?

#SmallBusiness #Bookkeeping #Accounting #UKBusiness