Bookkeeping isn’t anyone’s favourite part of running a business. Honestly, it’s usually the thing that gets pushed to “later.” But if you want a business that lasts, you can’t wing your finances. Whether you’re a few months in or finally ready to get serious about the numbers, here are the six things we want every business owner to have in place.

Separate business and personal

If your personal account is still paying for business expenses, stop. Today.
Open an account just for the business. Sole proprietor? You don’t need anything fancy. A second chequing account in your own name, used only for the business, does the job. The same goes for a credit card. Pick one and keep it business only. It makes bookkeeping easier, and if CRA ever comes knocking, your records are already clean.

Track every dollar in and out

This sounds basic, and it’s where most owners slip. Spreadsheets or software, we don’t care. What matters is that you do it consistently. Don’t trust your memory. Don’t let receipts pile up in your inbox. Set aside time every week or two to record what came in and what went out. Small and regular beats big and painful.

Stay on top of sales tax

In Canada, you generally have to register for GST/HST once you pass $30,000 in revenue over four consecutive quarters. Know your province’s rules before you get close. Charge the right rate. And set aside the tax you collect, because it’s not extra income. It’s the government’s money, and you’re just holding it.

Categorize your expenses properly

Messy categories cost you money. Miss a deduction or misreport income, and it adds up fast. Build a short list of categories that fit your business: software, advertising, travel, subcontractors, whatever applies. Then use the same ones every time. When you apply for a loan or a grant, or just wonder where the money went, you’ll be glad you did this from the start.

Reconcile regularly

Reconciling means matching your books to your bank and credit card statements. Do it monthly. A mismatch caught this month is a five minute fix. Caught a year from now, it’s a mess.

Review your numbers

Recording the numbers is not the end of the road. You’re not done until you actually review them and use them to make informed decisions. Look at your reports. Interpret them. Make smart calls as you run and grow your business. That’s the whole point, not just having information to file your taxes.

If your books only get opened at tax time, you’re paying for information you’re not using. Block time every month to go through your reports and ask what they’re telling you.

The short version

Get these six in place and your business gets easier to run, easier to grow, and a lot less stressful come tax time.

Not sure where yours stands? That’s what we’re here for. Book a call to chat with us today.