5 Bookkeeping Mistakes That Could Cost Your Small Business Thousands

When you’re running a small business, every dollar matters. Yet, one of the top reasons businesses lose money is simple: bookkeeping mistakes. In fact, according to the U.S. Small Business Administration (SBA), poor financial management is one of the leading causes of small business failure.

At Mill Stone Bookkeeping, we help businesses avoid these costly pitfalls. Here are five of the biggest bookkeeping mistakes — and how you can steer clear of them.

1. Mixing Personal and Business Finances

It might seem harmless to occasionally pay a business expense with your personal card (or vice versa), but mixing finances is a recipe for disaster. It complicates taxes, hides cash flow problems, and can even expose you to legal risks.Solution: Open a separate business checking account and dedicate a credit card solely for business use. NerdWallet has a great guide on how to open a business bank account if you're just starting out.

2. Falling Behind on Record Keeping

Small things pile up fast. If you wait too long to record transactions or reconcile accounts, mistakes multiply — and valuable deductions can get missed at tax time.Solution: Schedule weekly bookkeeping sessions or outsource to a reliable service (like Mill Stone Bookkeeping!) to keep your records up-to-date.

3. Not Tracking Receivables Properly

It’s one thing to send an invoice — it’s another to make sure you actually get paid. Many businesses miss out on income simply because they don't have a system for tracking outstanding invoices.Solution: Implement a reliable invoicing and follow-up process. Tools like QuickBooks can help automate this — or we can recommend a customized system just for your business.

4. Misclassifying Expenses

Wrongly categorizing expenses can skew your financial reports, making it harder to understand your true profitability. It can also trigger red flags during a tax audit.Solution: Work with a knowledgeable bookkeeper who understands tax codes, expense classification, and can help you maximize your deductions.

5. Trying to DIY Without Help

There’s a difference between saving money and risking it. DIY bookkeeping can be fine when you’re just starting out — but as your business grows, the risks (and costs) of mistakes get bigger.Solution: Invest in professional bookkeeping early to build a strong, accurate financial foundation that supports your growth.

Final Thoughts:

Bookkeeping isn’t just about keeping records — it’s about making smart, profitable decisions with confidence.

If you're ready to stop stressing over your books and focus on growing your business, Mill Stone Bookkeeping is here to help.

👉 Contact us today for a free consultation and discover how professional bookkeeping can make all the difference!