5 mistakes you must not make in your daily bookkeeping

At Collectia, we love entrepreneurs, self-employed and finance people. People we work with every single day. In fact, we have been doing so for more than 150 years.

As a debt collection company with over 150 years of experience in debt collection, we have gained a tremendous insight into companies' daily work with finances, bookkeeping and not least the recovery of unpaid invoices. 

In this post, we will focus on 5 mistakes that we see that bookkeepers often make. Mistakes that can affect the company's finances, liquidity and not least resources.

1. under-invoicing - or even forgetting to invoice

Too many companies, large and small, do not have a set procedure for sending out invoices. This is expensive, stupid and, not least, a major threat to the company's finances.

We see a surprisingly large number of companies that send their invoices too late or send invoices with the wrong amount (where not everything has been invoiced). This is often due to busyness and a lack of overview of time consumption, material consumption, etc.

Therefore, make sure to establish a solid framework and routines for invoicing in your business. If you can't manage it yourself, it might be time to get a bookkeeper or a tool that can help you record materials, hours and consumption for each customer.

2. Forgetting to book and bank reconcile regularly (and often!)

When did you last update your daily deposits and withdrawals? Last week? A month ago? 

Too many businesses, especially small and medium-sized enterprises, last updated their receipts and payments when the accountant visited or when VAT had to be accounted for.

In the vast majority of cases, this is a stupid and bad idea. Among other things, it prevents you from being able to send reminders for missing payments, which can cost you precious time in both the collection and reminder process.

3. Process for collecting unpaid invoices is missing

Bookkeeping and finance in general is fundamentally about keeping track of things. Fortunately, this has never been easier with modern ERPand accounting software.

Most companies have clarified who is responsible for payroll, accounting and reporting. However, not everyone has a reminder or collection process in place. Who should remind your customers when they don't pay their bill? Is it the accountant or the salesperson? What actions should be included in the reminder process? When do you take your first action? When does the case go to a collection agency, for example, a debt collection agency?

We recommend that you take these considerations into account so that you are well prepared. If you don't move effectively or in time, your chances of getting your money back are reduced.

4. Does not have an accountant or bookkeeper attached

It can be expensive not to have your bookkeeping in order and often very expensive when, for example, reports to SKAT are not correct.

Therefore, it's always a good idea to partner with a bookkeeper or an accountant depending on the size of your business.

Even though a bookkeeper and an accountant don't do the same thing, it's always a good idea to be able to seek professional advice. This is especially true as your business grows and the need for new assets, loans, payroll, employees, etc. increases.

The cost of an accountant or bookkeeper is often money well spent and may even save you money.

5. Lose focus on the things that make the most sense for the business

Bookkeeping, debt collection, payroll, VAT and tax are not the most interesting topics for most entrepreneurs.

Therefore, make sure to continuously assess which tasks make sense to keep internally within the company and which should be outsourced to an external agency, debt collection company or other administrative unit. After all, does it make sense for an employee to sit on a salary if it is only a few hundred kroner a month that can be outsourced? And does it make sense to spend time and resources on frustrating invoice follow-up if a debt collection agency could do the job for you?

Do you need help?

Throughout our more than 150 years in the industry, we have saved thousands of employee hours from bookkeeping. If you also need a helping hand, and thus free up time that can be spent on your core business, contact us today. We are ready to help you!