5 of the Most Common Mistakes Made in Accounting

Looking to become a chartered accountant? Whether you’re still at university or considering a total career change, it’s important to know that human error can still significantly disturb operations in accountancy. 

For those thinking of progressing in the industry, it’s essential to stay one step ahead of the game. With the right knowledge, you can prevent some of the most avoidable mishaps.

What is an accountant?

Accountants are finance professionals. They provide confidential advice and specialist guidance to businesses, individuals, and charitable organizations across all industries. Their core responsibility is to help others achieve their strategic and financial goals.

A chartered accountant is one who has obtained specific accreditation in the industry. Any chartered accountant will usually be a member of a professional governing body like the Institute of Chartered Accountants in England and Wales (ICAEW).

Accountancy is generally known as a stable career. Whether you choose to work in the public or private sector, it can be incredibly fulfilling and lucrative. As they progress, accountants enjoy fantastic earning potential.

How do you become an accountant?

Accountancy requires extensive training, so you’ll need to be determined if you’re serious about pursuing a career in the industry. 

There are several routes into accounting, but many choose to take a university course first. Apprenticeships are also available, allowing students to earn while they learn. A few of the vital skills that you’ll need to succeed in an accounting career include:

  • Strong analytical skills and high numerical literacy
  • Commercial mindset
  • Highly organised with impeccable time management
  • Confidence and proficiency with IT systems

What are the 5 most common mistakes in accounting?

  1. Being disorganised

Bookkeeping demands extreme organisational skills. Keeping a record of every single transaction, including its origins and tax receipts, is imperative. If smaller transactions are forgotten about, accountants risk jeopardising their work and landing their clients in trouble with HMRC.

  1. Unreconciled accounts

To reconcile accounts means to ensure that bank accounts show the correct balance according to cash flow. If there are discrepancies, immediate action must be taken to ensure that the account reflects the same balance. Unbalanced accounts can also be a sign of fraudulent transactions, so many accountants choose to get covered with professional indemnity insurance.

  1. Data entry errors

Entering data incorrectly or failing to ensure timely and comprehensive backups can prove troublesome in accountancy. Digital issues can arise at any time, so it’s crucial to not only understand the systems you use at work but also keep them updated and secure. 

  1. Software misuse

Mistakes with software can be encountered in accountancy for a wide variety of reasons, but improper training is one of the most prevalent. There are so many benefits to having a centralised system, so knowing how to work one will help you keep data in one place.  

  1. Inaccurate reporting

Keeping records up to date and accurate is one of the biggest responsibilities of every accountant. Once administrative tasks are complete, ensure to check the figures through. And when you need to declare figures to HMRC, remember that using automated software can help to deliver enhanced accuracy.

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