- Plan for Major Expenses. Think one to five years ahead?
- Track Your Expenses. Missing receipts, missing tax write-offs. Business credit cards can be handy tools to make sure all expenses are tracked.
- Record Deposits Correctly. Deposits may be sales revenue, loan or owner investments. Ensure you can account for where they come from otherwise they will be taxed as Income.
- Set Aside Money for Taxes. You know that you’re going to have to pay taxes and you know when. Set money aside for it.
- Keep an Eye on Your Invoices. Late and unpaid bills can hurt your cash flow.
Remember, every late payment is an interest-free loan that hurts your cash flow.
Seventy Four percent of small businesses do NOT employ full-time or part-time bookkeeping help. Consequently, small
business owners are attempting to figure this out without the necessary background, taking away valuable time
from running their business.
Throwing data into accounting software without knowing the key elements of the bookkeeping process can create some
disastrous results. And those results may adversely affect your tax return.
Three options for business bookkeeping: handle it yourself, utilize online bookkeeping programs or outsource to a CPA.
Small businesses embrace online tools for their lower dollar cost, but without accounting expertise, spend valuable time trying to figure out tasks in desperate need of a human being for guidance.
Fourth Option: TAP Bookkeeping is a qualified bookkeeping provider, we charge less than accountants, but can deliver
exactly what you need.
Give us a call today!
Getting audited by CRA is no fun. Your best chance of avoiding an audit is by doing things right before you file your return this year. Some suggestions:
- Don’t leave anything out. Missing or incomplete information on your return will trigger an audit letter automatically.
- Double-check your numbers. Bad math will get you audited. People often make calculation errors when they do their returns, especially if they do them without assistance.
- Don’t stand out. The CRA takes a closer look at business expenses, charitable donations and high-value itemized deductions.
- Have your documentation in order. Be meticulous about your recordkeeping.
- Items that will support the tax breaks you take include: cancelled checks, receipts, credit card and investment statements, logs for mileage and business meals and proof of charitable donations.
Running a business in Canada involves managing red tape. There are many government requirements to keep up with. A good bookkeeper will help you manage all of these requirements, so nothing slips through the cracks; however, as a business owner you still need to ensure that someone is engaged to complete these tasks. It can prevent a lot of finger-pointing later. After all, it’s you that the CRA is going to come after for any missed filings or payments.
- Reconcile your accounts at the end of each month
- Record and pay bills on their due date
- Create and issue invoices (and follow up and up and up)
- Keep tabs on your cash balance
- Process and Reconcile Payroll
- Track, file and pay sales tax (GST/PST)
- Provide Reports
- All the little details
Let TAP assist your business with all of the above.
Trying to run a business without good financial statements is like trying to call football plays without knowing the information on the scoreboard (score, quarter, down, distance needed for a first down, time remaining, etc.).
Regardless of your coaching skills, it’s impossible to call plays effectively under such circumstances. Yet, in our experience, far too many small business owners attempt exactly this.
They have financial statements that are, at best, not useful for management decision-making. At worst, they are inaccurate. In addition, small business owners often receive their financial statements so late that they are no longer relevant. For entrepreneurs who are counting on their businesses to provide a
consistent source of income, this is not an acceptable state of affairs.
At a bare minimum, you must have accurate financial statements.
At TAP Bookkeeping, our customers receive their Financial Statements either monthly or quarterly. Contact us for information on how we can help your small business.
Bootstrapping your business can be a smart and effective way to go.
It will likely require a great deal of patience. Here are a few tips to get the ball rolling.
- Know your budget better than the back of your hand. Many burgeoning entrepreneurs are too optimistic about expenses, often underestimating how much they’re actually spending.
- Stay away from credit card debt. Many business owners form an unhealthy reliance on credit card debt as they try to grow. Do whatever you can to avoid this.
- Network. In this case, making connections can help you find new customers and, more importantly, facilitate the learning process as you associate with established successes.
- Ultimately, you’re responsible for your own success. If you can patiently navigate the waters of building a startup, it will be worth all the time and effort you put into it.
Worth considering if you are a start up business.
Businesses can’t survive without bookkeeping. The CRA frowns on businesses that don’t keep appropriate records come tax time. You also won’t know how your business is doing without knowing the health of your cash flow or what your margin is.
Outsourcing is often a solution for bookkeeping. When you outsource the bookkeeping to TAP Bookkeeping, we are responsible for hiring, training, and managing employees – not you. We also specialize in what you’re paying us to do.
At TAP Bookkeeping, we provide bookkeeping services because we want to help take this task off of the plate of entrepreneurs. When you engage TAP Bookkeeping, you are buying our expertise.
Are you interested in getting rid of the pain bookkeeping has put on your business? Learn more by visiting tapbookkeeping.ca
- Overstating Income – Ensure you claim all your expenses .. often
entrepreneurs pay for expenses from their personal funds and forget to record them as business expenses. Higher Income equals more tax to pay.
- Procrastination – Important tasks like your bookkeeping should not be left until tax time. That gives you NO financial information during the year to chart the course of your business. Make it a priority and schedule time to get it done.
- Losing Track of Transactions – Are you confident that you have invoiced out all your work? Maybe you have received a payment but can’t remember what it was for. Chances are you may not have invoiced it out!
- Confusing Pay and Draws – Pay is being treated like an employee .. which is great if you are incorporated. For sole proprietors you are basically taking a draw.
TAP Bookkeeping can help. Just give us a call.
If there is one thing I have learned about providing bookkeeping services, it’s nobody wants to talk about bookkeeping.
Profit and loss statements, bank reconciliations, receipts…it’s just boring numbers and a necessary evil that a business owner has to take care of so they can pay taxes every year.
That’s the general mentality you get from a business owner, and I completely understand it.
The real questions business owners have, and the key decisions they need to make, all rely on good bookkeeping.
Without bookkeeping and awareness of where you stand financially, how is it possible to make those important decisions?
You may not like talking about bookkeeping, but you need the numbers that allow you to have a plan for profitability.
And you need to spend your time driving business and serving clients.
We just won’t call it bookkeeping.
- Who will be your bookkeeper? Can you afford someone full time, or are you interested in contracting it out? Which is most cost effective?
- What system or software(s) will you use? So many to choose from.
- Where will you store your documents and data?
- When will you record and classify transactions? Daily? Weekly? Monthly?
- When you get to far behind, it becomes a daunting task to get caught up!!
- When will you reconcile your accounts?
- When will you review your bookkeeping?
- When will you create your financial statements?
- When will you review your financial statements? Is your cash flow a problem?
If you are having any trouble answering the above questions, please give us a call. We are happy to have a conversation with business owners around their bookkeeping needs!! Great bookkeeping takes extensive knowledge and experience to execute!! We have both!