Business Owners: 7 Bookkeeping Mistakes That Are Costing You Money (And How to Fix Them)

Running a small business is tough enough without throwing away money on avoidable bookkeeping mistakes. Yet every day, business owners across San Antonio are unknowingly making errors that cost them thousands of dollars, whether through missed deductions, IRS penalties, or simply not knowing where their money is going.

The good news? Most of these mistakes are totally fixable once you know what to look for. Let's dive into the seven biggest bookkeeping blunders that are draining your bank account and exactly how to stop them.

Mistake #1: Mixing Personal and Business Expenses

What's happening: You use your business credit card to grab lunch, then pay for office supplies with your personal card. Sound familiar? This might seem harmless, but it's creating a financial nightmare.

Why it's costing you: When personal and business expenses get tangled up, you lose track of legitimate business deductions. Plus, if the IRS comes knocking, mixed records make you look unprofessional and can trigger deeper audits. Even worse, mixing funds can actually void your business's legal protection if someone sues you.

The fix: Open a dedicated business bank account and credit card, today. Use them exclusively for business expenses. If you accidentally pay for something personal with business funds, record it properly as an owner's draw, not a business expense. Your future self (and your accountant) will thank you.

Mistake #2: Treating Receipts Like Confetti

What's happening: You stuff receipts in your glove compartment, lose them in coat pockets, or worse, throw them away thinking you'll remember the expense later.

Why it's costing you: No receipt means no deduction in the eyes of the IRS. You could be leaving thousands of dollars in tax savings on the table simply because you can't prove you spent the money. Business lunch? Office supplies? That conference you attended? Without documentation, it didn't happen.

The fix: Go digital. Use your phone to snap photos of receipts immediately, or invest in a receipt-scanning app. Create a simple filing system, even a shoebox labeled "2025 Receipts" is better than nothing. Set a weekly reminder to organize your paperwork before it gets out of hand.

Mistake #3: Playing Bookkeeping Catch-Up

What's happening: You promise yourself you'll "catch up on the books" next month, but next month becomes next quarter, and suddenly you're staring at a year's worth of messy financial data.

Why it's costing you: Outdated books mean you're flying blind. You can't track cash flow, identify profitable services, or make informed business decisions when your financial picture is three months behind. Plus, catching up on months of bookkeeping at tax time is expensive and stressful.

The fix: Block out time every month, yes, every month: to update your books. Treat it like any other important business appointment. If you can't commit to monthly bookkeeping yourself, that's a clear sign it's time to outsource to a professional.

Mistake #4: Ignoring Bank Reconciliation

What's happening: You figure if money goes out and comes in roughly like you expect, everything must be fine. You rarely check if your accounting software matches your bank statements.

Why it's costing you: Bank errors happen more than you think. Duplicate charges, unauthorized transactions, and recording mistakes can silently drain your accounts while you remain clueless. Without regular reconciliation, you might be missing money or overstating your profits.

The fix: Reconcile your bank and credit card statements monthly: no excuses. Most accounting software makes this process fairly painless. Set a recurring calendar reminder and stick to it. If numbers don't match, investigate immediately. Small discrepancies often reveal bigger problems.

Mistake #5: Guessing Your Way Through Categories

What's happening: You're not sure if that software subscription goes under "Office Expenses" or "Technology," so you pick one and hope for the best. You do this for dozens of transactions throughout the year.

Why it's costing you: Random categorization makes your financial reports useless. You can't track spending patterns, identify cost-cutting opportunities, or properly calculate business metrics. Come tax time, your accountant has to clean up a year's worth of guesswork.

The fix: Set up a proper chart of accounts from the start. When you're unsure about a category, ask someone who knows: don't guess. Create a quick reference guide for common expenses so you stay consistent. If categorization feels overwhelming, this is another great reason to work with a bookkeeping professional.

Mistake #6: Recording Owner Payments as Business Expenses

What's happening: When you pay yourself, you record it as a business expense like "Owner Salary" or "Management Fee," thinking this reduces your taxable income.

Why it's costing you: For sole proprietors and single-member LLCs, owner draws aren't business expenses: they're distributions of profit. Recording them wrong distorts your actual business income and can create tax complications. You're not saving money; you're just making your books inaccurate.

The fix: Create an "Owner's Draw" or "Distribution" account in your equity section. When you pay yourself, record it there, not as an expense. This keeps your profit calculations accurate and your tax filings clean. If you're unsure about how to pay yourself properly, consult with a tax professional.

Mistake #7: Forgetting About Business Mileage

What's happening: You drive all over San Antonio for business: client meetings, supply runs, networking events: but you never track the miles because it seems like too much hassle.

Why it's costing you: Business mileage is one of the biggest tax deductions most small business owners miss. At the current IRS rate, even 100 business miles per month adds up to significant tax savings over a year. Multiply that by actual business driving, and you could be missing out on hundreds or thousands in deductions.

The fix: Start tracking business miles today. Use a simple mileage app on your phone, or keep a logbook in your car. Record the date, destination, purpose, and miles for each business trip. It takes 30 seconds per trip but can save you serious money at tax time.

ACTION STEPS: Getting Your Books Back on Track

Ready to stop hemorrhaging money through bookkeeping mistakes? Here's your action plan:

This Week:

• Open separate business banking and credit card accounts if you haven't already

• Download a receipt-scanning app or set up a simple filing system

• Schedule monthly bookkeeping time on your calendar

This Month:

• Reconcile your bank statements for the past three months

• Review your expense categories and create a reference guide for common transactions

• Start tracking business mileage for all work-related travel

This Quarter:

• Evaluate whether you need professional bookkeeping help (hint: if any of these mistakes sound familiar, you probably do)

• Set up systems to prevent these mistakes from happening again

• Consider working with a local accounting firm that understands San Antonio businesses

The Bottom Line

Bookkeeping mistakes aren't just annoying: they're expensive. But here's the thing: you don't have to fix everything overnight, and you definitely don't have to do it alone.

At SBS of SA, LLC, we help San Antonio business owners clean up their books and implement systems that prevent these costly mistakes from happening again. Whether you need full-service bookkeeping or just want someone to review your processes, we're here to help you keep more money in your pocket where it belongs.

Don't let another month go by throwing money away on preventable bookkeeping errors. Your business: and your bank account: deserve better.

Disclaimer: This article provides general information and should not be considered specific financial or legal advice. Consult with qualified professionals regarding your individual business circumstances and tax situation.