Last year, a new client came to us frustrated. "I am making more money than ever," she told us, "but I never seem to have any cash." Sound familiar?
After digging into her books, we found the problem was not her revenue. It was five bookkeeping mistakes that were quietly bleeding her dry. And honestly, we see these same mistakes in almost every new client who walks through our door.
1. The Reconciliation Gap
This client had not reconciled her bank accounts in seven months. Seven months. By the time we got in there, we found duplicate vendor payments, a subscription she had cancelled months ago that was still being charged, and a customer payment that never actually cleared.
Total cost of not reconciling: roughly $4,200.
The lesson here is simple. Reconciling your accounts every month is not busywork. It is how you catch the leaks before they become floods.
2. The Personal-Business Blur
We get it. You are grabbing lunch with a client and you swipe whatever card is handy. You deposit a check into your personal account because the bank is closer. It feels harmless in the moment.
But when tax time comes, or when you need to apply for a loan, those blurred lines become very expensive to untangle. We once spent 40 hours sorting out a client's mixed accounts. At our rates, that is money you would rather spend on literally anything else.
Keep it simple. Business expenses go on business cards. Business income goes into business accounts. Every time.
3. The Invoice Black Hole
Here is a story that breaks our hearts. A contractor completed a $12,000 job. Sent the invoice. Then got busy with the next project and forgot about it. By the time he followed up, it was 120 days later and the customer was disputing the charges.
He eventually collected $8,000. That is $4,000 left on the table because nobody was watching the receivables.
Set up a system. Follow up at 30 days. Follow up again at 45. Get serious at 60. The longer an invoice ages, the less likely you are to collect it.
4. The Miscellaneous Mountain
Open your books right now and look at your expense categories. If "Miscellaneous" or "Other" is anywhere near the top, you are leaving tax deductions on the table and flying blind on where your money actually goes.
Proper categorization is not about being organized for its own sake. It is about understanding your business. When you know exactly how much you spend on marketing versus supplies versus subcontractors, you can make smarter decisions about where to cut and where to invest.
5. The DIY Trap
Your time has a dollar value. If you are a plumber who bills $150 an hour and you spend 10 hours a month fighting with QuickBooks, that is $1,500 in lost revenue. Every single month.
We are not saying this to sell you on our services. We are saying it because we have watched too many talented business owners burn themselves out on work that someone else could handle better and faster.
The Good News
Every one of these mistakes is fixable. And once you fix them, you will be surprised how much cash was hiding in your business all along.