Payroll and Owner Draws: Two Areas That Commonly Throw Off Your Books
Some of the biggest issues in a set of books aren’t obvious right away.
Payroll and owner activity are two of them.
With payroll, I often see only the net pay recorded. Taxes and liabilities are missing, or the entries don’t tie to what actually ran through payroll.
That throws off expenses and creates problems on the balance sheet.
Owner draws are another common issue.
I regularly see draws mixed into expense accounts. That lowers profit on paper and makes it harder to see what the business is actually earning.
If you’re not sure what you’ve actually made versus what you’ve taken out, this is usually part of the problem.
When I’m cleaning up books, a lot of the work happens behind the scenes:
Reviewing payroll entries
Cleaning up balance sheet accounts
Making sure liabilities are recorded correctly
It’s not just about the P&L.
If these areas aren’t handled properly, the reports won’t be reliable- even if everything looks organized on the surface.
BookWise Bookkeeping
Phone 314-325-2478
info@bookwisestl.com