3 Common Accounting Mistakes SMEs Make (and How to Fix Them)

When we review new clients’ accounts, we often see the same issues again and again.
Small things that seem harmless — until they cause delays, penalties, or wrong reports later.

If you’re running a growing business, here are 3 common accounting mistakes you’ll want to avoid (or fix before your next financial year end).

‍

💸 1. Mixing Personal and Business Spending

This one is super common — especially for small companies or directors who use one bank account for everything.

You buy lunch, fuel, or family groceries with the same card used for business payments.
At the end of the month, you can’t tell which is which.

The problem?
Your accountant can’t classify them properly.
It makes your financial statement messy, and you might miss legitimate claims or get overtaxed.

✅ How to Fix It:

• Use separate bank accounts for business and personal spending.
• If you must use your own card, record and tag the expense clearly.
• Set up a director’s account in your books — so you can track any personal advances or reimbursements properly.

Clear separation = cleaner books = fewer headaches later.

‍

🧾 2. Not Recording Transactions Monthly

Some companies only do their accounts once a year — just before audit or tax submission.
But when you do that, you lose track of your cash flow and can’t make real-time decisions.

You also risk missing invoices, losing receipts, or forgetting what that “RM480 transfer in March” was for.

✅ How to Fix It:

• Record transactions monthly, not yearly.
• Reconcile your bank statements regularly — so your books match reality.
• Keep digital copies of receipts; even phone photos are fine.

Treat accounting like brushing teeth — small effort every month, not one big panic at year-end.

‍

💰 3. Relying Only on the Bank Balance to Judge Business Health

Many owners look at their bank app and think,

“Got money = doing fine.”

But your bank balance doesn’t show what’s owed to you (receivables), or what you owe others (bills, loans, tax).

You might have RM50,000 in the bank today but RM45,000 in unpaid supplier invoices — which means your true balance is only RM5,000.

✅ How to Fix It:

• Review your Profit & Loss and Balance Sheet every few months.
• Track who owes you money — and follow up early.
• Don’t rely only on “gut feel” — check the data before making big spending decisions.

Knowing your real position helps you grow safely, not blindly.

‍

💬 Final Thoughts

Most accounting mistakes don’t happen because people are careless — they happen because everyone’s busy running the business.
But small habits make a big difference.

If you keep your records clean, separate your spending, and review your numbers regularly, your year-end process becomes easy — no panic, no missing data, no stress.

At Trust Maven®, we don’t start work until a client officially engages us — but we do offer a free accounting health screening to check where you stand.
Sometimes all you need is a quick review to know what’s missing before it becomes a real problem.

‍

💌 Want us to take a quick look at your books?
Message us for a free accounting health screening — no commitment, just clarity.