Hidden Bookkeeping Mistakes Costing You Profit with New Light Financial Solutions
Episode Overview
Are your financial reports giving you the full picture, or hiding costly mistakes?
In this episode of Getting to the Bottom Line, host Stephanie Smith of New Light Financial Solutions is joined by her husband and business partner, Kris Smith, to unpack the most common bookkeeping cleanup issues they see when working with high-earning entrepreneurs.
If you’ve ever fallen behind on your books, categorized expenses “close enough,” or wondered why your profit doesn’t match your bank balance, this episode is for you.
Stephanie and Kris break down two of the biggest financial clarity killers:
→ Cost of Goods Sold (COGS) being miscategorized
→ Payroll entries recorded incorrectly
When these items aren’t properly structured on your Profit & Loss statement, your margins become distorted, your gross profit is misleading, and your decision-making suffers. You may think you’re profitable — but the numbers could be telling a different story.
They explain:
- What cost of goods actually includes (and how to know if it applies to your business)
- Why service businesses often overlook COGS
- How misplacing COGS impacts your gross profit percentage
- Why recording payroll as “net pay” is a major bookkeeping mistake
- The difference between employer vs. employee payroll taxes
- How liabilities from payroll affect your balance sheet
If you want accurate financial reports, clean books, and better business decisions, this conversation will help you understand where clarity begins.
Because at the end of the day, good decisions require good data.
Check out our discussion on Bookkeeping Mistakes
Listen to our discussion on Bookkeeping Mistakes
Show Notes
In this episode of Getting to the Bottom Line, Stephanie and Kris Smith discuss the most common bookkeeping fixes they encounter during cleanup projects. From miscategorized cost of goods to improperly recorded payroll entries, they explain how these mistakes distort financial reports and prevent business owners from making informed decisions.
What You’ll Learn in This Episode:
What a bookkeeping cleanup project involves
How to properly categorize Cost of Goods Sold (COGS)
Why COGS placement impacts gross profit visibility
When service-based businesses should track cost of goods
Why recording payroll as net pay is incorrect
The difference between employer and employee payroll taxes
How payroll liabilities affect your balance sheet
Key Takeaways:
Misplaced COGS distort your gross profit percentage
Payroll recorded incorrectly can understate expenses
Employee tax withholdings are liabilities — not expenses
Accurate categorization creates better financial clarity
Clear numbers lead to better business decisions
Resources Mentioned:
Final Thoughts
If your financial reports aren’t structured correctly, your decisions won’t be either. Bookkeeping isn’t just about staying compliant — it’s about gaining clarity. When your cost of goods and payroll are properly recorded, you unlock visibility into your margins, profitability, and future growth opportunities.
