Some bookkeeping mistakes are annoying. Others cost you money or create problems that take real time to fix. These are the ones that come up most often.

Mixing personal and business finances is the number one issue. Using a personal credit card for business purchases or running personal expenses through a business account makes everything harder. Your books become unreliable, your profit and loss statement is wrong, and your accountant has to spend time sorting through transactions that should never have been mixed. Open a dedicated business bank account and business credit card. Use them exclusively for business.

Falling behind on bookkeeping is extremely common. It usually starts innocently. You skip one month because you’re busy, then two months become six, and suddenly you’re staring at a year of unreconciled transactions. The longer you wait, the harder it is to remember what charges were for or catch errors. Weekly or monthly reconciliation keeps everything manageable. Once you’re months behind, you’re looking at a catch-up bookkeeping project just to get back to current.

Miscategorizing expenses happens constantly with DIY bookkeeping. Putting a tool purchase under “office supplies” or lumping all expenses into one generic category means your financial reports don’t tell you anything useful. Worse, it can cause you to miss deductions or raise flags with the IRS. Every expense needs to land in the right category so your reports reflect reality.

Not reviewing financial reports is a quieter mistake but just as damaging. If you never look at your profit and loss statement or balance sheet, you’re running your business on gut feeling instead of actual data. Monthly review of your financials shows you trends before they become problems. Revenue dropping? Expenses creeping up? You won’t know until you look.

Misclassifying workers as independent contractors instead of employees is a mistake that carries penalties. California is particularly strict about this. If someone works set hours, uses your equipment, and follows your direction, they’re likely an employee regardless of what your agreement says. Getting this wrong creates payroll tax liability plus penalties and interest.

Not saving documentation is the mistake that hurts most during an audit. Bank statements alone don’t prove what a purchase was for. Receipts, invoices, and contracts tell the full story. Digital storage makes this easy. Take a photo, upload it, move on.

Finally, trying to do everything yourself when you don’t have the time or knowledge creates a false sense of savings. Spending ten hours a month on bookkeeping you’re doing incorrectly isn’t saving money. It’s creating future cleanup costs and possibly costing you deductions. Working with a QuickBooks ProAdvisor in Long Beach or anywhere else means your books are done right from the start and you get that time back for running your business.

Most of these mistakes share a root cause. They happen when bookkeeping gets treated as an afterthought instead of an ongoing part of running the business. Small consistent effort prevents big expensive problems later.