How to Make Your Company’s Income Statement Error Free

Business accounting errors can be costly and detrimental to the financial health of a business. Even with the best online bookkeeping software such as ZarMoney, it is still possible to have some errors. Entries into accounting software are manual. Likewise, most of the errors are detectable by a competent financial team.

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Sources of Errors Made by Staff on Income Statements

When performing entries into a cloud business accounting software, the following errors are possible:

 

  1. Not analyzing financial reports making it difficult to pinpoint anomalies.
  2. Entering expenses in the wrong place
  3. Staff who are not knowledgeable in the use of a business accounting software
  4. Entirely omitting a transaction so that it is not traceable.
  5. Reversing a transaction, e.g. posting it as the credit instead of debit.
  6. Misclassification of a transaction, thus entering it into the wrong ledger.
  7. Mathematical errors made when entering a transaction, e.g. omitting a zero at the end of a figure.
  8. Preparation of inaccurate financial statements.
  9. Recording of transactions in a previous financial period after the period has ended.
  10. Failure to seek professional help in accounting when the business needs it.
  11. Not using a suitable online bookkeeping system
  12. Complete deletion of files from the storage system, e.g. a hard drive

 

How to Make the Income Statement Error Free

Business accounting riddled with errors is a liability. The following are ways that a financial statement can be made error-free:

  1. Routine analysis of financial reports. There is no point in preparing the summaries if the business team will not study them.
  2. Training of staff to use online bookkeeping
  3. Assigning a manageable workload to the staff will prevent rushed entries that cause so many errors.
  4. Ensure scanned copies of receipts are present in the cloud storage.
  5. Continuous capacity building for the financial team on accounting principles to minimize technical errors
  6. Conduct reconciliations of financial statements regularly for early detection of errors.
  7. Ensure that the staff get into a routine of performing entries in the business accounting software system to prevent backlog.

 

How can the cloud business accounting software make the Income Statement Error Free?

Some errors in the income statement are manageable by the proper use of an online bookkeeping system. Business accounting software makes a difference by:

  1. Processing of complex business accounting data
  2. Business accounting software has options for the creation of repeat customers’ profiles for automatic sending of invoices, reminders to pay and keep track of payment defaulters.
  3. Digital payment providers, e.g. banks, have features of integration with the accounting software. Payments are, therefore, received and updated automatically.
  4. Cloud business accounting software works with bank reconciliation systems to generate periodic updates of cash flows.

In conclusion, the proper use of business accounting software is a great way to track cash flow, manage the inventory, and generate financial reports. The process of business accounting is made simple by the use of an appropriate cloud business accounting software. 

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