Stay Away From These Five Typical Financial Report Errors

February 2025

A company's financial health can be seen in its financial reports. Financial report preparation errors can have disastrous repercussions, from making the wrong corporate decisions to getting into legal hot water. Here, we show you five errors that frequently occur when creating financial reports so that you can avoid them:

1. Errors in recording

• Double recording: capturing an identical transaction more than once.
• Late recording: failing to timely record a transaction.
• Account coding errors: when a transaction is made into the incorrect account.

?As a result, financial reports start to become imprecise and challenging to interpret.

2. Not incorporating every transaction

• Forgetting small transactions: ignoring transactions with small values.
• Not including non-cash transactions: for example, barter or accounts receivable.

As a result, the company's financial situation is not fully depicted in financial statements.

3. Calculation mistakes

• Arithmetic errors refer to mistakes made when calculating multiplication, division, addition, and subtraction.
• Mistakes in depreciation computation: The technique provided for computing asset depreciation is not followed.

As a result, financial reports lose their validity and can mislead users.

4. Not Making Amends

• Failure to reconcile bank records: failing to make a comparison between the bank balance in the bank and the bank balance in the books.
• Failure to reconcile accounts receivable and payable: failure to match the sums of accounts receivable and payable with the accompanying paperwork.

As a result, the balance shown in the books and the actual balance diverge.

5. Not Being Aware of Accounting Standards

• Failure to adhere to SAK (Financial Accounting Standards): employing non-SAK compliant accounting techniques.
• Not keeping up with the most recent advancements in accounting rules; disengaging from understanding of SAK modifications.

As a result, the financial statements can lead to legal issues and cannot be compared to the financial accounts of other companies.

Create accurate, pertinent, and trustworthy financial reports by avoiding the aforementioned errors.

Ways to Avoid Making Mistakes

How can one avoid these common mistakes when making financial reports? We suggest the following:

• Use accounting software: This can assist with automated calculations and recording.
• Train staff members: Boost knowledge of appropriate accounting practices among staff members.
• Conduct regular internal audits: Identifying and fixing problems prior to the release of financial statements can be facilitated by conducting routine internal audits.
• See a professional accountant: An accountant with experience may help ensure your financial statements are prepared accurately by offering guidance and support.

Are you interested in learning more about financial report preparation? Never be afraid to ask questions! For all of your independent business and business's financial report and audit needs, get in touch with Moores Rowland Indonesia at contact-Jakarta@moores-rowland.com or contact-Bali@moores-rowland.com.

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**By: Stefani W. Anggraeni — Marketing Communications Manager & Social Media Specialist