What are typical mistakes that are made when preparing a balance sheet?
April 20, 2022 | 50,00 EUR | answered by Xenia Zellerbach
Dear Tax Advisor,
my name is Hanna Altmann and I run a medium-sized company in the IT industry. In recent years, I have taken over the preparation of the balance sheet myself, thinking that this would be a cost-effective solution. However, lately I have noticed some discrepancies in my balance sheet and I fear that I may have made typical errors in the preparation of the balance sheet.
As a self-employed person with little experience in the field of accounting, I am unsure if I have correctly captured all relevant data and if my financial statements comply with legal requirements. I am worried that my balance sheet may be incorrect and could have negative implications for my company.
Could you please advise me on the typical errors that are made in the preparation of the balance sheet and how I can avoid them? Are there specific aspects that I should pay particular attention to in order to create an error-free balance sheet? I am looking for concrete tips and recommendations to make my accounting more professional and accurate in the future.
Thank you in advance for your support and advice.
Kind regards,
Hanna Altmann
Dear Mrs. Altmann,
Thank you for your inquiry regarding typical errors in financial statement preparation. It is commendable that you, as a business owner, have taken on the task of preparing the financial statements yourself to save costs. However, it is important to note that financial statement preparation is a complex process that requires specific expertise. Therefore, it is possible that errors have occurred that need to be corrected to avoid any negative impact on your company.
Typical errors in financial statement preparation may include:
1. Incorrect valuation of assets and liabilities: It is important that you correctly value all assets and liabilities to obtain a realistic picture of your company's financial situation. Make sure to comply with the valuation regulations of the German Commercial Code (HGB).
2. Incomplete recording of business transactions: It is possible that you have not fully recorded important business transactions, which can lead to a distorted presentation in the financial statements. Therefore, maintain accurate and complete bookkeeping records.
3. Incorrect depreciation: Incorrect calculation or neglect of depreciation can result in a misvaluation of assets. Ensure that you correctly carry out depreciation in accordance with legal requirements.
To avoid these errors and prepare error-free financial statements, there are some aspects you should pay particular attention to:
1. Regular training: Attend training sessions or seminars on financial statement preparation to keep your knowledge up to date and avoid errors.
2. Use of professional software: Use accounting software that assists you in data entry and analysis, and minimizes errors.
3. External support: If you are unsure or have complex issues in financial statement preparation, consider seeking the assistance of an experienced tax advisor or auditor.
I hope these tips will help you make your financial statement preparation more professional and accurate in the future. If you have any further questions or need assistance, I am happy to help.
Sincerely,
Xenia Zellerbach
