Many small business owners wear multiple hats – some outside of their area of expertise.
Take an independent contractor such as an electrician. He (or she) is highly qualified in their trade and may be busy working on various construction sites, but not have any staff. Or perhaps an entrepreneur runs a small retail business or restaurant. In these cases, it doesn’t make sense to have a full-time accountant or bookkeeper. Often the business owner is stretching themselves to manage the books during their spare time in the evening or weekends. Sound familiar?
While most Canadians’ income tax returns are due on April 30, those who are self-employed have until June 17 to file. That said, if you owe tax for 2018, regardless of whether you are self-employed, that should be paid by April 30 to avoid penalties.
With this in mind, we have pulled together some smart bookkeeping tips to help you prepare for the tax season. The accountants and bookkeepers at Canwest accounting also counsel clients one-to-one to help set up a bookkeeping system that works for them, and we can keep on top of any filings so that you don’t miss any important deadlines while you’re busy with the rest of your business.
7 Smart Bookkeeping Tips:
- Keep your records organized and in one place. A lot of people dislike keeping records in file folders. We find some clients prefer to keep any receipts or invoices in an envelope; one envelope for each month will help keep you organized. We have several clients who drop off these envelopes for us to take care of their bookkeeping and accounting.
- Keep your personal finances separate. To simplify record keeping, make sure you have separate bank accounts and credit cards for your business versus personal use.
- Use accounting software that’s right for you. We can recommend a variety of accounting programs that will suit your business’ needs.
- Regularly reconcile your bank account and credit card statements. If a mistake has been made, you don’t want to delay having this corrected. It’s your money.
- Implement an electronic payroll system. Going digital will save you time each payroll cycle and makes bookkeeping much easier. Ask us how we can help with this.
- Use an inventory management program and check inventory periodically. In a busy business, things can get misplaced, entered wrong or you could have a staff theft issue that you won’t know about unless you count your inventory.
- Get in touch with your accountant before the busy tax season (March and April). By keeping in touch with your accountant periodically throughout the year, any bookkeeping errors can be caught before that last-minute tax filing crunch. It can take time to resolve errors, so save yourself the stress and contact us sooner rather than later.
“While it’s ideal for us to receive people’s tax records by mid-March, we accept them up until mid-April. Beyond that, we may not be able to guarantee we can complete everything by April 30th, but we try our hardest to,” said Sharlane Bailey, Owner of Canwest Accounting.
For more information about bookkeeping and accounting for your business, contact Canwest Accounting at our offices in Victoria and the West Shore (Langford).
The suggestions and advice provided by Canwest Accounting should not be relied upon in place of professional advice. You are responsible for checking the accuracy of relevant facts and opinions provided.