Bookkeeping is hands down the least favorite job of a small business owner. Although it’s often dreaded, there are so many reasons to keep your books in order. From personal peace of mind to satisfying a potential IRS audit down the road, the reasons for staying organized and keeping thorough records are innumerable.When you follow these best practices for spending and tracking money, you’re going to have a better handle on your cash flow, know when things are going south and target areas of potential growth.Here are six mistakes that can cause some serious issues and how to avoid them:1. Avoiding Bank Statement ReconciliationProblem: You’ve got a to-do list that's running off the page, the family is waiting on you for dinner and you’re two weeks overdue for a nap. Reconciling your bank account is the last thing you want to do before you leave your desk. However, the time you could save by skipping this potentially mundane task can cost you a lot more in the future. By avoiding this important bookkeeping task, you could lose deductions or fail to notice mistakes until it’s too late.Solution: When you treat the job of reconciling your bank account as important as the rest of your to-do list, you’re going to stem a slew of headaches down the road. Schedule a one-on-one with your bank statement (you can choose a regular date that’s just after you normally receive your monthly statement). You’ll be able to reconcile discrepancies quickly, detect any overcharges if they happen and avoid important lapses of data collection.2. Spending Too Much on TechnologyProblem: You’re enamored by a sales pitch about software that could make your life easier, cut wasted time and save you money. Plus it has a beautiful interface and tons of widgets that look so fun to play with! But when you pull it out of the box, you realize you’re only going to use one quarter of its functionality. You’ve just paid four times as much as you should have spent for a product that is way out of your league.Solution: Clearly define your wants and needs. Keep things simple. A software system with dozens of perks could be fun, but if you’re not using all of its capabilities, why are you paying for them? There are plenty of solutions designed just for small businesses. Recognize the most important investments: Data backup (get and use a backup hard drive today), accounting software (check out Xero or QuickBooks) and reliable record keeping (see No. 3). When you’re up and running, consider automating your transaction data with Commerce Sync (yes, we offer a free trial!).Ask about trial periods and return policies. It’s hard to tell if a big ticket item is really going to help your business make more money. Before you invest, ask about refund terms. Knowing what you can return and what you can’t will aid your decisions. Grow your business, and then grow your technological capabilities, not the other way around.3. Wasting Time with a ShoeboxProblem: Sure you’re collecting receipts, but they’re “filed” in an old Zappos box under your desk. Although this is a better process than throwing your receipts away, the sight of a mixed up pile of expense “records” is going to inflict anxiety on even the most calm business owner. When it’s time to put everything in order, this system is going to drive you nuts for hours on end. Even though it could seem like a pain to track your expenses on a regular basis, heed the saying “little and often make much.”Solution: Set aside 15 minutes each week to organize your receipts. When you log a receipt, answer the questions “when, where what and why.” Sometimes there’s a “who” – write down the names of people you wined and dined at the local seafood house. At the end of the year, you’ll thank yourself for not trying to remember this information in your head.You can download apps such as One Receipt or Shoeboxed – or just use a simple Excel or Google Spreadsheet. If you’re an analogue fan, tape receipts (or printed electronic receipts) into a spiral notebook and write down the pertinent information next to it.It’s so important to keep these records because you can be audited years later when you have zero recollection of what you bought or why. It’s best to keep receipts for at least six years. Don’t just rely on bank statements because the IRS is going to want proof of purchases.Resist the urge to get distracted when you’re organizing receipts. Tracking expenses on a regular basis – and this goes for nearly all aspects of accounting – will give you a firm grasp of your cash flow and a much calmer state of mind.4. Commingling Personal and Business AccountsProblem: Your family car needs an oil change, but the only credit card in your wallet is issued to your business. If you happen to use a business card for a non-business-related expense, reconcile it immediately – and then stop doing that! If you don’t, your bank statement is going to become an overwhelming mix of personal and business expenses. Not only will you have a rough time figuring who owes what, you’re going to have a bear of a time if you’re audited. The IRS takes a strict stance on business expenses and won’t tolerate abuses.Solution: If you’re not using a separate checkbook for business and personal spending, now is the time to start. Shop around for a business bank account that suits your needs and don’t forget to look at credit unions. Ask your banker about hidden fees and complimentary savings account bundles. If you change accounts, be sure business spending (such as automated payments) and deposit processes (POS systems) are updated and linked.5. Missing Out on Tax DeductionsProblem: If you don’t keep good records of what you’re spending or aren’t clear on what can be deducted, you’re going to miss out on some much-needed tax write offs. It’s hard enough to run a small business, so you’ll want to take advantage of every deduction that’s available. Know the difference between business and capital expenses. Capital expenses are not deductible.Solution: Office supplies, a vehicle (only the portion used for business) and materials directly related to the operation of your business can be deducted. Advertising costs such as printing or placing advertisements can also be deducted. If you hire someone to create the advertising, such as a web site or flyer design, these costs are deductible, as are software, subscriptions and business-related professional organization expenses. Check out this small business deduction guide from the IRS.Be careful not to deduct capital expenses, which include land and equipment – basically, these are assets that will depreciate (and you can deduct their depreciation with IRS Publication 946 “How to Depreciate Property”). Talk to your accountant if you have any questions.6. Not Learning How to Use Your Accounting Software Problem: You’ve installed your accounting software and your daily transactions are flowing in using Commerce Sync. Both Xero and QuickBooks offer features to create 1099s, tracks bills and create expense reports. These are highly useful functions, but if you’re not using them, you can lose sight of your cash flow, forget to pay a bill or miss a deductible expense. These are all mistakes that can cost you real money.Solution: Keep a finger on the pulse of your business by learning how to use all of the functionality of your accounting software. Xero and QuickBooks offer rich online resources. If creating statements and running reports isn’t your cup of tea, consider hiring an accountant who’s well-versed with your particular accounting software. Not only could this person save you time, they can help avoid costly mistakes, find valuable deductions, and then – most importantly – help you understand where your business can grow. If you want someone who knows the type of accounting software you use, QuickBooks has a network of Pro Advisors and Xero has certified accountants, bookkeepers and advisors to help you.Although following these tips can take a little extra time each week, your diligence will be rewarded. You’ll have strategic knowledge of your business’ finances and your accountant won’t have to charge you an arm and a leg when you show up with boxes of receipts at tax time.If you take steps to avoid these common, yet easily avoidable, mistakes, you’re going to be well on your way to running a tight financial ship and growing your business.