Starting a business is exciting… and a little chaotic. Between finding customers, doing the work, marketing, and keeping up with daily life, bookkeeping usually ends up as the thing you’ll “deal with later.”
The problem? The early bookkeeping habits you build (or don’t build) can make your business feel clear and confident… or confusing and stressful.
Here are some of the most common bookkeeping mistakes new businesses make — and what to do instead.
1) Mixing business and personal money
This is the classic one. Using the same bank account (or credit card) for everything makes it hard to know what your business is actually earning and spending. It also makes tax time a nightmare.
Do this instead: Open a separate business checking account (and ideally a business credit card). Even if you’re small. Even if it feels “extra.” Future you will be grateful.
2) Waiting until tax time to deal with it
When you ignore your books for months, you forget what charges were for, receipts disappear, and you end up with a big messy cleanup.
Do this instead: Touch your books weekly. Even 15–20 minutes goes a long way. A little consistency beats a big scramble every time.
3) Not tracking receipts and documentation
Bank statements show that you spent money, but not always why you spent it. Some expenses (like meals, travel, and certain purchases) need better documentation.
Do this instead: Go digital. Snap photos of receipts and upload them as you go (QuickBooks Online makes this easy).
4) Guessing on categories
New business owners often categorize transactions based on what “sounds right” — and that can lead to inaccurate reports, missed deductions, and confusion later.
Do this instead: Set up a clean chart of accounts and keep categories simple. If you’re not sure where something belongs, don’t guess forever — ask and create a rule moving forward.
5) Thinking revenue = profit
Money coming in feels great… but it doesn’t automatically mean you’re doing well. If your expenses are high, profit may be much lower than you think.
Do this instead: Review a Profit & Loss report regularly. It’s one of the fastest ways to understand the real story of your business.
6) Not reconciling accounts
If your QuickBooks balance doesn’t match your bank balance, something is off — missing transactions, duplicates, incorrect entries, or payments recorded wrong.
Do this instead: Make sure you’re consistently downloading bank/credit card transactions and reviewing them. (If reconciling feels confusing, you’re not alone — it’s one of the biggest areas people need help with.)
7) Underpricing and not planning for taxes
A lot of new business owners price based on what they think people will pay… without understanding their costs or setting money aside for taxes.
Do this instead: Use your bookkeeping to understand your true costs and build a plan for taxes (even if it’s small amounts at first).
8) Choosing a system that doesn’t fit your business
Some new businesses start with spreadsheets, random apps, or a pile of receipts — and then they outgrow it quickly.
Do this instead: Start with a simple, repeatable system (QuickBooks Online is a great option for many service-based businesses). The goal is to make it easier, not more complicated.
The good news: all of this is fixable
If you’ve made any of these mistakes, you’re normal. Most business owners do. The important thing is catching them early and putting a simple system in place that helps you stay consistent.
The sooner you get your bookkeeping set up right, the easier it is to:
- understand your numbers
- make confident decisions
- stay ready for tax season
- grow your business without the financial stress