To help you avoid common mistakes accountants face with regard to accounting field. In this content I explained five common mistakes I’ve noticed in the Accounting industry. These mistakes may be from my past experience and it may be helpful for you.
If you’re short on time, here’s the gist:
Avoid these common mistakes
1. Big Effect of Small Accounting Mistake : Never take any accounting mistake as small. For example, due to accounting mistake of figures, our profit goes down. Whole share market depends on it. Share market price may be down fastly due this small accounting mistake. Lakhs of shareholders' heart may fail due to this shock.
2. Wrong Estimation: Accounting provides us all the past information of expenses, incomes, assets and liabilities. But we do mistake when we estimate future figures without proper analyze of accounting. Actually this is the part of management accounting. Without this, accounting will provide you some doubtful information and you can estimate in wrong side. So, make a good budget by analyzing all past accounting figures.
3. Mistake in the Calculation of Labour Cost: Cost accounting is the part of accounting which tells us the cost of every thing. But, it is the case, we can do mistake in its calculation. Suppose, you have calculate the cost of daily pay Rs. 500 per day per labour cost. But, it may be some employees do overtime and some employees take leave. So, your accounting record need amendment and updates of all these things.
4. Mistake in Risk Calculation: Accounting is the science to record financial data. Risk is also part of financial data. To calculate and to record the financial risk is not so easy. Accounting old record shows only past statements. On this basis, we can estimate future risk and record it. But in future, you can see, everyday, a new risk will come in your front. There will not any provision or reserve for this. Simple example is construction of my one room. It is on first floor. I have constructed it on two walls and one support. On my accounting base, I estimate every material, labor and other overhead cost. But, I could not estimate the cost and make provision if any worker or labourer died due to any default in the construction. What amount, I have to pay. So, I am increasing the scope of accounting and started to record every new future risk in my accounting record.
5. Mistake in Cash Management : Cash management is also part of accounting. If any cash is less, it can effect whole accounting system which accounting will be recorded less to balance this money. This will be the great challenge for accountant. No, accountant is ready to give his own money to cover this less cash from any fund.
If you’re short on time, here’s the gist:
Avoid these common mistakes
1. Big Effect of Small Accounting Mistake : Never take any accounting mistake as small. For example, due to accounting mistake of figures, our profit goes down. Whole share market depends on it. Share market price may be down fastly due this small accounting mistake. Lakhs of shareholders' heart may fail due to this shock.
2. Wrong Estimation: Accounting provides us all the past information of expenses, incomes, assets and liabilities. But we do mistake when we estimate future figures without proper analyze of accounting. Actually this is the part of management accounting. Without this, accounting will provide you some doubtful information and you can estimate in wrong side. So, make a good budget by analyzing all past accounting figures.
3. Mistake in the Calculation of Labour Cost: Cost accounting is the part of accounting which tells us the cost of every thing. But, it is the case, we can do mistake in its calculation. Suppose, you have calculate the cost of daily pay Rs. 500 per day per labour cost. But, it may be some employees do overtime and some employees take leave. So, your accounting record need amendment and updates of all these things.
4. Mistake in Risk Calculation: Accounting is the science to record financial data. Risk is also part of financial data. To calculate and to record the financial risk is not so easy. Accounting old record shows only past statements. On this basis, we can estimate future risk and record it. But in future, you can see, everyday, a new risk will come in your front. There will not any provision or reserve for this. Simple example is construction of my one room. It is on first floor. I have constructed it on two walls and one support. On my accounting base, I estimate every material, labor and other overhead cost. But, I could not estimate the cost and make provision if any worker or labourer died due to any default in the construction. What amount, I have to pay. So, I am increasing the scope of accounting and started to record every new future risk in my accounting record.
5. Mistake in Cash Management : Cash management is also part of accounting. If any cash is less, it can effect whole accounting system which accounting will be recorded less to balance this money. This will be the great challenge for accountant. No, accountant is ready to give his own money to cover this less cash from any fund.
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