5 Typical Mistakes Entrepreneurs Make in Accounting

Accounting is not just about crunching numbers — it’s a crucial foundation for the financial health of your business. However, even experienced entrepreneurs often make mistakes that can lead to fines, financial losses, and loss of trust from partners. According to studies, more than 60% of fines in Moldova are related to accounting errors.

In this article, we’ll cover 5 common accounting mistakes made by entrepreneurs in Moldova and provide practical tips to help you avoid them. Read on to the end — and you’ll learn how to steer clear of these problems!

Mistake #1: Missing or Incorrectly Prepared Primary Documents

Primary documents are the foundation of any accounting system. They record every business transaction of a company, whether it’s a purchase of goods, provision of services, or income received. According to Moldovan law, these documents must include mandatory details such as the date, description of the transaction, amount, signatures of responsible persons, and other required information.

However, in practice, entrepreneurs often:

• lose documents;
• prepare them incorrectly (missing signatures or stamps);
• use unconfirmed documents.

📜 Fact:
“Documents lacking all mandatory details are not considered primary documents and cannot be used to account for expenses” (Law No. 287/2017, Art. 6).

💡 Tip:

Always check that your documents are properly prepared. Use a checklist with all mandatory details and keep them well organized — this will help avoid problems during tax audits.

Mistake #2: Incorrect Application of Depreciation Rates

Depreciation is the systematic allocation of the cost of fixed assets over their useful life. In Moldova, according to NAS 3 “Fixed Assets,” companies can use several depreciation methods: straight-line, declining balance, or production-based.

Entrepreneurs often make the following mistakes:

• apply incorrect depreciation rates;
• fail to update accounting policies when acquiring new assets;
• use depreciation methods not provided for by law.

This can lead to overstated or understated expenses, which can result in tax adjustments and fines.

📜 Fact:
“Depreciation rates must comply with legal requirements and the company’s accounting policy” (NAS 3 “Fixed Assets”).

💡 Tip:

Before calculating depreciation, check which rates apply to your specific equipment. Update your accounting policies when adding new assets — this will help you avoid tax disputes and penalties.

Mistake #3: Inconsistency Between Accounting and Tax Records

Many entrepreneurs keep accounting and tax records separately, forgetting that the data in these two systems must be aligned. For example, an expense might be recognized in the accounting records but lack tax confirmation — which means it cannot be deducted when calculating corporate income tax.

Such discrepancies lead to serious consequences:

• the tax base may be calculated incorrectly;
• tax authorities may discover errors during audits and impose additional taxes, penalties, and fines;
• distortion of the company’s overall financial reporting.

📜 Fact:
“All expenses must be documented and comply with the law; otherwise, they are not deductible for tax purposes” (Tax Code of Moldova, Art. 24).

💡 Tip:

Regularly reconcile your accounting and tax records. Maintain them in parallel and in a unified system — this will help you minimize the risk of errors and misunderstandings with tax authorities.

Mistake #4: Incorrect Transition from NAS to IFRS

For certain companies in Moldova (such as public interest entities: banks, insurance companies, large enterprises), it is mandatory to apply International Financial Reporting Standards (IFRS). Mistakes during the transition from NAS to IFRS can have serious consequences:

• distortion of financial statements;
• incorrect valuation of assets and liabilities;
• loss of trust from investors and partners;
• fines from regulators.

Entrepreneurs often:

• do not conduct a proper inventory during the transition;
• do not revise their accounting policy;
• fail to include all adjustments (such as asset revaluation).

📜 Fact:
“When transitioning to IFRS, all adjustments that affect the company’s financial position must be disclosed” (IFRS 1 “First-time Adoption of IFRS”).

💡 Tip:

Plan the transition from NAS to IFRS in advance. Conduct a thorough inventory of all assets and liabilities to reflect them accurately in your financial statements. If needed, involve professional consultants.

Mistake #5: Lack of Regular Control and Audit

Many entrepreneurs believe that if an audit is not mandatory, it’s not necessary to conduct one. However, the absence of regular control over accounting can lead to the accumulation of errors, which can be difficult to correct later.

What does this mean in practice?

• errors in accounting accumulate and become systemic;
• tax authorities may discover violations during inspections;
• the company can suffer reputational and financial losses.

Audit helps identify errors in advance, before they become serious problems. Even if an audit is not mandatory, conducting it at least once a year is a wise investment in business stability.

📜 Fact:
“An independent review of financial statements helps identify discrepancies and strengthen partners’ trust” (Law No. 271/2017 “On Audit of Financial Statements”).

💡 Tip:

Conduct internal audits or involve external professionals to ensure your financial statements are accurate. This will not only help you avoid fines but also build trust with investors and clients.

Conclusion

Errors in accounting can be costly — not only financially, but also for your reputation. This is especially true for entrepreneurs aiming to grow and enter international markets. However, these mistakes can be avoided by paying attention to proper accounting organization in advance.

Key takeaways:

• accurate accounting is the foundation of a healthy business;
• accounting and taxation must always be aligned;
• regular audits help identify and fix mistakes early.

💡 Tip:
If you don’t have the time or desire to dive into the details, trust your accounting to professionals. This will save you time, money, and protect you from fines.

The experts at Intelcont are ready to help you set up accounting, conduct audits, and ensure full compliance with all legal requirements. Contact us to discuss your needs and get professional support!