Costly Bookkeeping Mistakes Businesses Made in 2025

As we reviewed 2025 financial records, the same bookkeeping mistakes showed up again and again. Not because business owners were careless, but because the impact was never clearly explained. Below are some of the most costly issues we saw and how to fix them moving forward.

❌ Personal meals, subscriptions, or travel were paid from the business account, making reports inaccurate and deductions harder to support.

✅ Keep separate personal and business accounts and cards, and if something personal slips through, reclassify it correctly right away.

❌ Payroll was run using outdated tax rates or without accounting for new requirements, leading to underpayments and notices.

✅ Review payroll settings regularly and confirm tax rates and thresholds are updated, especially at the start of the year.

❌ Equipment or large software purchases were fully expensed instead of depreciated, causing distorted profit and future issues.

✅ Identify large purchases early and track them properly so depreciation is recorded over time.

❌ Sales tax collected from customers was recorded as an expense, reducing reported profit incorrectly.

✅ Record sales tax as a liability, not an expense, and reconcile it before filing returns.

❌ Business loans or lines of credit were recorded as income, inflating revenue and tax exposure.

✅ Record loans as liabilities so reports reflect true operating income.

❌ Bank and credit card accounts were months behind, allowing errors to pile up unnoticed.

✅ Reconcile accounts monthly to catch mistakes early.

If you want 2026 to feel more organized, confident, and profitable, now is the time to fix what did not work last year. Book a call to see how we can help you build better systems, get clear on your financials, and stay on track to meet your goals.