Every business is required, by law, to maintain complete and accurate records. However, many business small and large, can find this quite challenging. Below are the top bookkeeping mistakes made by business, and some tips on how to avoid them.

1. Not saving receipts. Many business are good at keeping large invoices, however they do not always ensure they keep receipts. This can present issues, as legally you can not claim a GST expense without a valid tax invoice or tax receipt for your claim. It can also make it difficult in tracking and categorizing your expenditure. File all your receipts and your expense records, however small, in a file. Sort them by date so they are easy to locate. Avoid the plastic bag accounting method or “shoebox” accounting if you can, as it will only cost you in accounting fees at the end of the year.

2. Forgetting to track reimbursable expenses. Small business owners often pay for expenses out of pocket or with their own personal credit card then make the mistakes of failing to track these expenses. They then fail to submit the expenses to the company for reimbursement. Make sure you repay reimbursable expenses at least once a month, so that you do not loose track.

3. Not properly classifying employees. There is a great deal of confusion between classification of employee, contractor and consultants – often this results in issues in PAYG, Super and employer obligations. If in doubt, use the ATO's contractor decision tool, available from www.ato.gov.au

4. Failure to reconcile books to the bank statements. A key aspect of bookkeeping is ensuring that the books are fully reconciled to the bank statements each month. This is one of the primary controls for ensuring that you have complete books, however it is easy to make mistakes and many companies fail to do this during the year, resulting in error in their books. It is also a good way of tracking all your payments and receipts to ensure each have been received and sent. Bank statements should be reconciled once per month, at a minimum - if you don't get statements that frequently, download them from the internet.

5. No backup. The paperless office does not exist in the real world, where audits do still exist. A paper trail, documentation or verification in the form of backup documents should be available, especially if all files are on the computer system, which could be prone to technical problems.

6. Failure to adequately track petty cash. A simple system should be set up whereby a set amount of money is in petty cash and each time money is taken out for any purpose, a petty cash slip is filled out. When the fund is exhausted, the slips will total the original amount and a check can be written to cash to set up the full amount again. Many offices are nonchalant about using the petty cash fund without keeping accurate records.

7. Failure to use a logical accounting system. Use a proper accounting system to keep track of your payments and receipts. Issue all your checks in the correct sequence and do the same with sales receipts. This does not have to be a computer system, although with the range of simple and cheap systems available for every size of business, this is usually the easiest option, a simple, logical and will assist you in managing your finances.

8. Failure to separate business and personal expenses. A consistent problem with many companies is the failure to correctly classify and separate business and personal expenses, leading to GST claiming errors. Quite simply, have a business account for business transactions, and a personal account for personal transactions.

9. Failure to communicate with the tax office. The tax office will always be willing to talk to business owners about their obligations, and especially if they are having trouble paying. If you having problems meeting your tax payments, talk to the tax office and arrange a payment plan, in most cases they are happy to offer help and advice.

10. Doing it yourself. Yes, this is a shameless plug for business, but it is also true. No matter how much they hate it, many small business owners insist upon handling the books themselves. A competent qualified bookkeeper will save you time, money and hassle, and enable you to focus on what you do best, running your business!