9 mistakes to avoid when working with an accounting program

Proper use of accounting software is key to efficient business management. However, entrepreneurs often make mistakes that can significantly complicate workflows and lead to financial losses instead of profits.

We analyzed the experience of Torgsoft customers and highlighted 9 common examples of incorrect use of accounting software:

1. Lack of comprehensive inventory

Many customers, instead of conducting a full inventory in the store, only adjust the quantity of goods through the "Stock Status" mode, i.e., they make changes to the receipt. This can create discrepancies in the quantity of goods and reduce the accuracy of accounting. It also leads to the accumulation of errors in the receipt.

Full inventory allows you to get an accurate picture of the remaining goods and avoid misunderstandings. Regular stocktaking in the store allows you to check the actual quantity of goods in the store or warehouse, compare them with the data in the Torgsoft program, identify shortages, overstock or excess goods, and verify the price tags of the goods.

To ensure that the inventory does not block the store's operations, Torgsoft recommends conducting it by product groups. Before starting the inventory, it is worth creating an "Inventory Statement" and selecting a filter for the goods involved in this process.

2. Using stock status instead of sales

Some entrepreneurs, instead of selling goods through "Sales," just look at prices in the product catalog in the "Stock Status" mode and conduct sales by writing them on a piece of paper or in a notebook. This method does not allow tracking the real movement of goods and leads to confusion and loss of up-to-date information on the stock of goods.

3. Changing prices in the receipt after partial sale of the batch

Adjusting prices in the receipt after selling part of the batch of goods will lead to incorrect cost calculation, discrepancies in financial reports, data on the cost of balances, changes in gross profit, net profit, and other profitability indicators. If you need to keep inventory accounting, the report will be generated incorrectly.

4. Selling small items "in the minus"

Entrepreneurs often underestimate the importance of small items and do not enter them into the accounting software. However, these items are often the main sources of sales, and during seasonal fluctuations, they make up a significant percentage of daily gross income.

Selling goods "in the minus" distorts data on actual profit and stock status, leading to incorrect calculations. As a result, the profit amount will be overestimated, which distorts the real picture of the business and causes problems with purchase planning. To find out if the item is in stock, it will have to be counted manually.

5. Editing documents retroactively

Editing warehouse and financial documents retroactively distorts the real situation and violates the main rule of management accounting: the data in the program must correspond to the real state of affairs. This way, you avoid self-deception and do not get confused by changed data.

Such actions can lead to abuse, as your partners or managers may start doing the same, which will devalue all accounting. Incorrect data causes errors in accounting and wrong management decisions, as information about warehouse stocks and financial transactions is distorted.

Editing warehouse documents retroactively leads to incorrect inventory accounting and reporting, which can, in turn, result in fines.

Retroactive editing increases the risk of reputational loss. If employees or partners find out that the data in the accounting program is being edited, it will undermine trust in the accounting system and those who manage it.

6. Incorrect product returns

In the Torgsoft program, the exchange of goods (barter) cannot be performed. All goods must go through the sales and returns procedure to ensure accurate accounting. When a product is sold, its quantity in stock decreases, and when returned, it increases. This affects the cost price, as each transaction changes the total value of inventory.

If the exchange of goods is conducted without registering the return in the accounting program, this will lead to inaccurate accounting. For example, an item exchanged for a cheaper one can cause losses for the store, as the sale will not be properly reflected in the financial statements. In addition, this will lead to product misallocation, causing confusion in the warehouse. As a result, situations may arise where the warehouse records the presence of a product that is not actually there, or vice versa - the product will not be in the program, although it is in the warehouse. This can cause delays in customer service and supply problems, as the warehouse will be working with inaccurate data.

If the product was sold through an ECR, the return must also be made through the ECR. This will help avoid financial problems, particularly reducing the tax burden, especially for sole proprietorships on the 3rd group. Incorrectly processed returns can distort reporting and lead to fines.

To avoid problems, return money in the same way the customer made the payment. This not only complies with the law but also minimizes the risk of fraud.

7. Incorrect preparation for opening an online store

• Using the wrong type of product. When a product is placed in an inappropriate type, for example, generators next to food on the site, it causes confusion and inconvenience for customers.

• Long product names in the description. If all the information about the product is in the name, it complicates the creation of product models. Each product will have to be edited to separate the name from the description.

• Using dynamic characteristics as the main one. This can lead to inaccuracies and incorrect accounting, as dynamic characteristics often change and cannot serve as a permanent product identifier.

• Inconsistent names of characteristics. Creating the same characteristic with different spellings, such as "green," "Green," "greenish," "greens," "grn.," leads to confusion on the site and complicates the search for products.

• Using abbreviations in names. Names like "Tel.Xi.Red.128" are difficult for users to understand, and they are not optimized for search engines. When there is a need for proper names, all products have to be redone or separate names created.

To avoid these problems, it is important to properly classify products, use clear, consistent names and characteristics, and avoid excessive abbreviations. This will improve the user experience and simplify inventory management.

8. Selling categories instead of products in checks

Selling goods in fiscal checks through categories instead of specific names is a violation of tax legislation. This practice does not comply with the requirements of the Law of Ukraine on ECR and the Regulation on the form and content of settlement documents, approved by the order of the Ministry of Finance of Ukraine dated 21.01.2016 No. 13.

According to these documents, the fiscal receipt must contain clear and detailed information about all sold goods (services), including their names, quantities, prices, and the total amount of the purchase. Without this information, proper accounting is impossible, which can lead to fines and other sanctions from tax authorities.

This approach also complicates proper accounting. Without detailed goods information, it is impossible to accurately determine the cost of goods, analyze the sales ranking of certain categories. For example, if you do not know how many units of a particular product were sold, it is difficult to determine how many need to be purchased next time, or what is the actual cost of the sold goods.

People may use this scheme for various reasons. Often, entrepreneurs resort to this out of laziness to enter goods into the accounting system, as detailing all sold goods takes more time and effort. Others may do this to avoid paying taxes, thinking that by not specifying the details of sold goods, it will be easier for them to hide their income. Some simply do not know about the requirements for fiscal receipt issuance or neglect the rules out of carelessness.

Maintaining honest and transparent accounting is an important condition for the successful development of business and customer trust. Instead of using dubious schemes, it is better to focus on proper accounting and paying the necessary taxes, which will ensure the stability and reputation of your business.

9. Incorrect accounting parameter settings

Setting accounting parameters without proper understanding of their impact on the system can lead to incorrect data and complications in accounting. For example, clients often include the entire product name in its description during registration in the accounting program. Then, to create product categories, all products with incorrect descriptions need to be rewritten.

The optimal way is to request a file with a correctly filled product database from the supplier. If such a file is not available or it is created incorrectly, it is easiest to enter product categories not in an Excel table, but in the Torgsoft accounting program to make it easier to work with the correct database in the future.

Incorrect accounting parameter settings in the Torgsoft program can lead to various problems affecting the store's operations. Therefore, when registering, pay attention to the settings in the menu item Merchandising - Product type.

Main mistakes when setting up product categories

Incorrect structure of the product types directory

Lack of a clear hierarchy of products in the directory can complicate the search and filtering of products. Follow the recommendations for building a directory with top levels (general product types) and sublevels (specific product types). For example, the top level is "Clothing," the sublevel is "Outerwear," and even lower is "Jacket," "Coat."

Too general product type names

Using too general names that do not give a clear idea of the product. Use specific names that reflect the main characteristics of the product. For example, instead of "Shoes," use "Sports Shoes" or "Men's Shoes."

Using all levels of hierarchy in the product name

Too long product names due to the inclusion of all hierarchy levels in the name. Only the lower branch of the tree should participate in the product name. For example, for the product "Jacket," do not include "Clothing" and "Outerwear" in the name.

Incorrect price rounding settings

Incorrect rounding settings can lead to incorrect price calculations. Choose the appropriate method of rounding prices for each product type. In Ukraine, entrepreneurs who use ECR for cash settlements must round the total amount of the purchase. According to the rounding rules, amounts ending from 1 to 4 kopecks are reduced to the nearest amount ending in 0 kopecks, and amounts from 5 to 9 kopecks are increased to the nearest amount ending in 0 kopecks. For example, UAH 12.34 is rounded to UAH 12.30, and UAH 12.35 to UAH 12.40. Rounding is applied to the total amount of the receipt, not to each item separately.

Lack of markup settings

Unconfigured markups can lead to the absence of margin on goods. Set markups for each product type or use markup groups for automatic application.

Ignoring additional product characteristics

Activate the necessary characteristics for each product type to have detailed information about the product in the product card, such as manufacturer, article, season, color, material, etc.

Lack of control over serial numbers

Activate the function of accounting for serial numbers for warranty products. Selling such products also obliges to keep inventory accounting.

Incorrect discount settings

Incorrect maximum discount settings can lead to financial losses. Set maximum discounts for each product type to avoid selling goods below cost.

Lack of fiscal accounting and VAT settings

Check and set up fiscal accounting and VAT accounting parameters for each product type, according to your tax system.

Avoiding these mistakes will ensure accuracy and efficiency in working with accounting software, positively impacting the entire business process.