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 no one ever clearly explained the impact.

Below are the most costly issues we saw, why they matter, and how to fix them moving forward.

❌ Personal expenses paid from the business account

Meals, subscriptions, or travel charged to the business account made financial reports inaccurate and deductions harder to defend.

✅ Fix it:
Keep separate personal and business bank accounts and cards. If a personal expense slips through (it happens), reclassify it correctly as soon as possible.

❌ Payroll run with outdated tax rates or settings

Using old tax rates or missing new payroll requirements led to underpayments, IRS notices, and unnecessary stress.

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

❌ Large purchases expensed instead of depreciated

Equipment or major software purchases were fully expensed, distorting profit and creating issues in future tax years.

✅ Fix it:
Flag large purchases early and track them properly so depreciation is recorded over time.

❌ Sales tax recorded as an expense

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

✅ Fix it:
Record sales tax as a liability (not an expense) and reconcile it before filing returns.

❌ Loans recorded as income

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

✅ Fix it:
Record loans as liabilities so your reports reflect true operating income.

❌ Accounts left unreconciled for months

Bank and credit card accounts fell behind, allowing small errors to snowball into bigger problems.

✅ Fix it:
Reconcile accounts monthly to catch issues early, before they turn into time-consuming and costly cleanups.

If you want 2026 to feel more organized, confident, and profitable, now is the time to fix what didn’t work last year. Reach out to learn how we can help you build better systems, gain clarity around your numbers, and stay on track to meet your goals.