Most small business owners don’t start out because they love paperwork. You started because you’re good at something. Maybe you fix cars, cut hair, build decks or run an online shop. The books end up at the bottom of the list.
Hardly anyone enjoys it, so it gets put off. One lost receipt or one wrong code doesn’t seem like a big deal. Then a BAS comes due, or the ATO sends a letter, or the bank wants your numbers, and you’re digging through months of records. Most of these mistakes are easy to spot once you know what to look for. These are eight we see a lot, with a simple fix for each.
1. Mixing Personal and Business Money
This one is very common in the first year. You pay for groceries with the business card. You pay a supplier from your personal account because it was quicker. It feels harmless at the time.
The trouble shows up later. Someone has to work out what was business and what wasn’t. Real expenses get missed, and personal ones sneak into your claims, which can raise questions in an ATO review. Open a separate business account and card, and use them only for business. If you slip up, record it as an owner’s drawing (or a director’s loan if you run a company) so the books stay correct.
2. Not Reconciling Your Bank Accounts
Bank reconciliation means matching your accounting records to your bank statement. It sounds dull, but it’s how you catch mistakes early. Skip it for a few months and small issues get hard to untangle.
Regular reconciliation will turn up things like:
- Duplicate transactions
- Payments that were never recorded
- Bank fees you forgot about
- Subscriptions you no longer use
- Charges you don’t recognise, including possible fraud
Monthly is the minimum for most businesses. Weekly is better if you have lots of transactions. Bank feeds in Xero, MYOB or QuickBooks make it much quicker.
3. Losing Receipts and Invoices
The ATO says most business records must be kept for five years. That covers receipts, invoices, bank statements and payroll records. Plenty of owners still keep receipts in the ute or a kitchen drawer. Then the ink fades, or the paper just goes missing.
Without proof, you might lose the deduction. For most purchases over $82.50, you also need a valid tax invoice to claim the GST credit. Take a photo of each receipt as soon as you get it. Apps like Dext, Hubdoc or the Xero app can attach it to the right transaction. Supplier bills need the same care. A simple accounts payable routine, where every bill goes to one place and gets paid on a set day, stops them getting lost.
4. Getting GST and BAS Wrong
If your business turns over $75,000 or more a year, you must register for GST. Many owners register on time and then slip up afterwards. Some claim GST on items that are GST-free. Some forget to charge it on sales. Others lodge the BAS late.
The usual problems are:
- Claiming GST credits without a tax invoice
- Charging GST when you shouldn’t, or not charging it when you should
- Switching between cash and accrual GST methods without realising
- Using the wrong figures from the last quarter
- Missing the due date and getting a late penalty
Your software can track GST, but only if each transaction is coded properly. A quick check before every BAS saves a lot of grief. Getting your bookkeeping setup right from the start makes GST coding much easier later.
5. Making Payroll and Super Errors
Paying staff is more than sending wages. You also withhold PAYG tax, report through Single Touch Payroll and pay super. Since 1 July 2026, super has to be paid on each payday under Payday Super. The money must reach the employee’s fund within seven business days, and the rate is 12 percent of qualifying earnings. If you used to pay quarterly, your cash flow planning needs to change, because Payday Super means smaller payments, made much more often.
Late super can trigger the Superannuation Guarantee Charge, and that isn’t tax deductible. Another common error is treating a worker as a contractor when they’re really an employee. That can lead to back payments of super and tax. Keep clear records of hours, pay rates and leave. Some owners pass this part to a payroll service so deadlines don’t slip.
6. Leaving the Books Until the End of the Year
A lot of owners say they’ll catch up when things go quiet. Things never go quiet. The pile grows, and by June it feels impossible.
Doing a little each week works better because:
- You still remember what each transaction was for
- You always know your cash position
- Errors are small and quick to fix
- BAS and tax time are less stressful
- You can make decisions with real numbers
Even one hour a week makes a difference. Pick a set day and stick to it.
7. Coding Expenses to the Wrong Category
When an expense goes in the wrong category, your reports tell you the wrong story. A vehicle cost ends up under “office supplies”. A loan repayment gets treated as an expense, when only the interest part is. Your profit looks higher or lower than it really is.
This matters for tax, but it matters for your own decisions too. If your marketing spend is buried in “general expenses”, you can’t tell if it’s working. Start with a simple chart of accounts. You don’t need fifty categories when fifteen will do. Be consistent, and ask if you’re unsure where something belongs. Owner loans, asset purchases and GST need extra care. If the books are already messy, a one-off clean-up before the next lodgement can reset things. A good bookkeeper will usually start there.
8. Poor Software Setup and Going Without Help
Cloud accounting software is great, but it’s only as good as its setup. Many owners sign up, connect the bank and start clicking. They skip the chart of accounts, the tax settings and the opening balances. Months later, the numbers don’t match anything.
Doing it all alone can backfire too. Some of these problems come from:
- Spending ten hours a week on bookkeeping instead of earning
- Avoiding it completely because it feels confusing
- Never having anyone review the work
- Using the wrong GST or payroll settings from day one
You don’t need a full-time bookkeeper. Even a monthly check from a professional can catch problems before they grow. Work out what your time is worth, then decide what to keep and what to hand over.
Quick Summary Table
| Mistake | What It Can Cost You | Simple Fix |
|---|---|---|
| Mixing personal and business money | Missed deductions, ATO questions | Open a separate business account |
| Skipping reconciliation | Hidden errors and fraud | Reconcile monthly or weekly |
| Losing receipts | Lost deductions and GST credits | Photo every receipt right away |
| GST and BAS mistakes | Penalties and interest | Check coding before each BAS |
| Payroll and super errors | Super charge, back pay | Pay on each payday and keep records |
| Leaving books until year end | Stress, rushed mistakes | Set a weekly bookkeeping time |
| Wrong expense categories | Bad reports and tax errors | Keep a simple chart of accounts |
| Poor software setup | Numbers that don't match | Set up properly or get a review |
One Fix This Week Is Enough to Start
Nobody gets bookkeeping perfect. Most owners make at least a few of these mistakes along the way. What matters is catching them early, before a lodgement date or a bank request turns them into a problem.
Pick one thing and do it this week. Open the separate account, or start photographing receipts. Then add the next habit when you’re ready. If you’d like someone to look over your books and tell you where to start, Elite Plus Bookkeeping is based in Dandenong and works with small businesses across Melbourne’s South-East and beyond. You can also book a free consultation with us.
Frequently Asked Questions
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