What Are Accounting Mistakes?
One could say that it was an unfortunate event which led to the downfall of the company. It was a simple mistake but the effects were detrimental and devastating. A simple mistake by a simple clerical worker resulted in thousands of dollars of fees being charged to a small company that had not even begun operations. It was a simple clerical error, that had a major impact.
The company had just started operations after a series of delays due to a failed business plan, and now had to pay the fine for the mistake they made at the time. The costs incurred for the mistake, and the ongoing costs to this day.
A few hours later the business was in the papers again, this time, the owners had sued the company that made the error, and the company was ordered to pay out a massive sum, so the saying went, for the mistake of a clerical error.
It was not a one error mistake.
A small business that was having problems, the owner hired a part-time clerk. A mistake of this nature has a domino effect of its own. In fact, the consequences would not have occurred if the owner had picked another profession. He would not have needed a secretary, and the business would not have had to pay for the mistake of a clerical error.
The owner of the company was a bookkeeper, and the clerical error had resulted in a massive bill to another company.
Accounting Errors are the major cause of business failure.
There are four types of errors.
- Firstly, the basic errors that can be done by anyone, from the novice accountant to the advanced corporate accountant.
- Secondly, the errors which are preventable by applying basic knowledge and understanding of the system of accounting used.
- Thirdly, the more specific errors which result from data entry errors, and finally, the complex errors which arise from coding errors.
- All of these types of accounting errors are extremely costly in terms of time and money, and can have a major impact on the financial health of a business.
Accounting Mistakes are the result of mistakes. They may be the result of a human error, or they may be the error of a machine. Either way, the consequences are the same. Every month, every quarter, and every year there are mistakes that lead to a mistake, and these mistakes could be the result of an illegal deletion of data, or they could be the result of an improper calculation of data. These mistakes could also be the result of an error in bookkeeping.
To avoid the errors and to be on the track contact the professionals at www.theaccountingandtax.com
