The main goal of setting up any business is, of course, to make a profit, and the dream of every businessman is to make good money while setting up a business. Statistics show that only 3 out of 10 businesses that are started survive, and only 1 of them make a profit. Apparently, these results cannot satisfy the businessman.
The statistics of the 4 largest accounting companies in the world, the so-called "big four", show us that the main problem in 93% companies that cannot continue their activities and/or cannot turn a profit for a very long time is that the accounting is not set up correctly. . In this article, we will tell you about the five biggest accounting mistakes that businesses make.
Incorrect grouping of business income and expenses
Especially in newly established and small businesses, the income and expenses of the business are not clearly defined. Incorrect grouping of expenses, i.e. lack of what type and where the expenses of the business are, also makes it difficult to calculate the expenses of the business digitally. For example, if your business is involved in the production of paper, first all the costs that the business will incur during the production of one unit of paper (purchase of raw materials, purchase of equipment, costs of human resources to operate the equipment, utility consumption of the equipment, etc.) should be determined, even if they are not numerical. Otherwise, if you cannot accurately group the cost of human resources during the production process, it will be impossible to measure it numerically.
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Non-optimization of human resource costs
The richest man in the world of "Amazon" company the founder Jeff Bezos everyone has an opinion to pay attention to; if you can't feed a team with 2 pizzas, then the team is too big. According to statistics, human resources in both small and medium-sized businesses are either optimized in uncertain periods or not optimized at all. Times are changing, opportunities and opportunities are ever-changing for businesses. For example, if 15 years ago, human resources and a large team were required to do some work, now it is possible to do it with only one software and one operator. For this reason, optimization of human resources in accordance with the strategy of the business from a certain period will ensure the sustainability of the business and increase the effectiveness of the work done.
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Unnecessary expenses, unnecessary work
The post-pandemic landscape has shown that companies have taken rapid steps towards digitization. Processes that take a lot of time and cost, especially for small businesses, such as the transition of sales and marketing processes to a digital environment, the digitalization of delivery-transportation-logistics management, and the digitalization of business process management, began to cause more harm than good after a while. "Why don't we have that dragon?" We can see from the statistics that his approach is wrong. A study conducted in 2021 shows that businesses that have transitioned, budgeted for, or planned for digitalization did not actually need this process until 30%. Business requires seeing five steps ahead, not one. For this reason, there is no benefit in making unnecessary expenses to follow fashion. By calculating budget plans for the long term, you can ensure that your money is spent on plans that will benefit you in the long run.
Avoiding inspections - not being open to innovation
One of the famous philosophers has a saying that has gone down in history; A man is a man as long as he makes mistakes. We all make mistakes, knowingly or unknowingly. But our biggest mistake will be to prevent our mistakes from appearing. KPMG reports show that only 34 out of every 100 businesses engage in planned audits. Businesses should use the audit service of an outside person or company at certain intervals in accordance with their plans. As they say, the musicians themselves can play the bow, the conductor is there to control whether they know how to play the bow or not.
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Maybe let's slow down a bit?
Especially young and impatient businessmen want it to grow very fast when starting a company. Except for certain exceptional cases, of course, this wish often turns into self-delusion, since it is impossible for such a thing to happen. This causes business and businessmen to create their biggest enemies. To quote a famous example, a business that "sees itself in the giant's mirror" makes plans far above its budget and begins to act. As a result, the lack of a real budget to implement the plan forces it to become a fiasco. Every businessman and all the management staff as a whole must see the realities, build and implement future plans and strategies based on them.
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