The 10 Most Common Bookkeeping Mistakes Businesses Make (and How to Avoid Them)

Running a business is hard enough without the books causing extra stress. Here are the most common bookkeeping mistakes I see — and simple ways to fix them.

1. Mixing personal and business spending

This makes your accounts messy, taxes harder, and your profit unclear.
Fix: Use a separate card and bank account for the business. Always.

2. Not reconciling regularly

If you wait months to reconcile, you lose visibility over cash and miss errors.
Fix: Reconcile weekly (or let your bookkeeper do it).

3. Forgetting GST rules

Many owners accidentally pay too much or too little.
Fix: Check whether expenses actually include GST and ensure Xero is programmed correctly.

4. No backup receipts

If the ATO asks questions and there’s no backup… that’s a problem.
Fix: Use phone apps or Xero’s built-in photo capture.

5. Leaving payroll until the last minute

Late super. Incorrect pay items. No award compliance.
Fix: Set payroll reminders and automate where possible.

6. Misclassifying expenses

Putting everything under “General Expenses” doesn’t help you run a business.
Fix: Use meaningful categories that match your business.

7. DIY bookkeeping without understanding Xero

A simple mistake today can create hours of cleanup later.
Fix: Get training or a professional to set up the file properly.

8. Not invoicing fast enough

If you don’t bill, you don’t get paid.
Fix: Send invoices the same day the job is done.

9. Not tracking debtors and creditors

This kills cashflow.
Fix: Use Xero’s ageing reports weekly.

10. No monthly review

Numbers only help if you actually look at them.
Fix: Commit to a monthly numbers meeting — even 20 minutes helps.

Final Thought:
Good bookkeeping isn’t about compliance — it’s about visibility and control. If you need help getting your books back on track, I’m always happy to talk.