Accounting mistakes can disrupt annual plans and create financial discrepancies that are hard to explain. Common issues arise during the planning phase, often related to General and Administrative (G&A) expenses. Many companies mistakenly allocate costs to G&A, thinking they'll balance out over time. This practice can lead to hidden expenses that complicate budget forecasting. Items that shouldn't be buried in G&A include shared facilities and software costs, large IT teams, and bad debt expenses. Recognizing revenue despite significant doubt about collectibility is another common error, as is misclassifying concessions granted to unhappy customers. Protecting Cost of Goods Sold (COGS) is essential for maintaining gross margins, which are important for company valuations. Typical COGS components include hosting costs, customer support, and DevOps. Misclassifications often occur when businesses fail to allocate DevOps costs properly or when Customer Success Managers’ roles are unclear. Their categorization can swing between COGS and Sales & Marketing (S&M) depending on whether they focus on support or driving sales. Infrastructure costs, like cloud services from AWS or Azure, also pose challenges. Companies frequently misallocate these expenses, lumping them into COGS without distinguishing their purpose. Allocated departments, including IT and recruiting, should spread costs across expense groups based on headcount or reasonable methodologies. Failure to do this can lead to significant issues, especially during audits or when preparing for IPOs. Sales commissions require careful handling under GAAP, needing capitalization and amortization over three to five years. Many early-stage firms overlook these rules, leading to discrepancies in financial metrics. Clean accounting practices are crucial for maintaining trust with department leaders and boards, particularly as companies scale. Addressing these mistakes now will prevent complications down the road, especially during M&A diligence or IPO preparations.