If you’re an accountant, you likely know that minor mistakes can have significant effects on your client’s finances. Without an accountant professional liability insurance policy, even the minutest errors, such as treating sales as revenue, could cause your operations serious harm.
- Prematurely Treating Sales as Revenue
When your business makes a sale, don’t treat the transaction as revenue until your company has officially delivered the product or service to the client. If you are posting sales as revenue before finalizing the transactions, it may seem like your operations are more profitable than they really are.
- Hastily Purchasing Equipment
One of the benefits of purchasing a new piece of equipment for your business is that you can account for the depreciation over time. However, if you go too far with this, you may be putting your company at risk. Try using a credit card or taking out a business loan instead when buying new equipment.
- Confusing Profits and Cash flow
Be extremely diligent when you are tracking what your company is spending versus what it is selling. Doing this is very important before you move forward with expansion plans for your business.
Unfortunately, even with tremendous diligence, mistakes like these may likely happen at some point. Talk with your insurance agent about accountant professional liability insurance to protect your best interests and the interests of your company.