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Three Common Accounting Mistakes

Great article for small business owners that drives home a number of the the viewpoints I’ve shared in the past. – T.C. Wright

 

Three Common Accounting Mistakes

Expert advice and lessons learned from financial missteps of small-business owners.

By Lisa Girard 

Tax time isn’t the only time business owners should review their accounting practices. Experts say small-business owners often make seemingly simple accounting mistakes that — which at their most extreme — could mean the difference between a good and bad fiscal year. Here are three common missteps entrepreneurs make and the lessons you can learn from them.

Mistake No.1: You treat sales as revenue before the product or service is delivered.
Stuart Reisch, co-founder of Transform, a company that makes custom storage units, learned this the hard way after unwittingly counting deposits as income his first year in business in 1999. The New Rochelle, N.Y.-based company had $1.2 million in expenses versus about $1.4 million in sales, resulting in what looked like a $200,000 profit. However, $200,000 worth of products that were sold weren’t actually installed until January of the next year. As a result, Reisch ultimately had to revise the company’s financials and realized the business had only broken even — not earned a profit after all. He then decided to temporarily halt plans for growth.

Go to Entrepreneur.com to finish the article.

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About Tiffany C. Wright

Hi! I,Tiffany C. Wright, am the author of the ebook, "Help! I Need Money for My Business Now!!" and the book "Solving the Capital Equation: Financing Solutions for Small Businesses", available on Amazon. I am the president of Toca Family Business Services, a short-term & project-based interim management & strategic and financial advisory firm, located in Atlanta, Georgia. In the past five years I've helped small and medium companies restructure and obtain over $31 Million in financing and a similar amount in purchase orders and contracts. I have an MBA in Finance and Entrepreneurial Management from the Wharton School of Business at the University of Pennsylvania and a B.S. in Industrial and Systems Engineering from The Ohio State University. Personal: I enjoy investing. I am a prodigious reader of everything from business books, magazines, and newspapers to horror and popular fiction. I read 4-6 books per month. I also love to travel. I've been to 33 countries on 5 continents and lived in Japan for 2.5 years and aim for a foreign locale twice a year. I am also an athlete and run track on the Master's Circuit. The highlight was placing 7th in my age group in the 2007 World Master's Track and Field Championships in Italy.

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The Resourceful CEO, Tiffany C. Wright

the president of Toca Family Business Services, a strategic and financial advisory firm which provides short-term & project-based C-level management. She is the author of Solving the Financial Equation: Financing Solutions for Small Businesses, available on Amazon.

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