How to Handle Accounting Errors
2024-01-07 – BE&O A&B
No business owner wants to make an error in their accounting books, but sometimes it happens. How do you correct those errors?
Ty Shea, the Chief Financial Officer of Circle City Broadcasting, says handling errors in your bookkeeping is less catastrophic than some might think. He says mistakes happen, and the best way to handle them is to “Own it and get out in front of it.”
Shea also says the fallout from a bookkeeping error will be smaller if you catch it in-house before it gets in front of a banker, investor, or business partner. But, he says, if it does make it that far, clearly communicate the steps you are taking to fix the error and assure the other party that the mistake won’t happen again.
Keeping communication open and not trying to hide the error from others is a key step in the process, and Shea says it could also go a long way in building trust with a lender or business partner.