4 Milestones to Get Control over Your Bookkeeping

An intelligible business owner knows that the basic way to lessen his stress is to get and keep his books in order. Still, it is no wonder that so many small business owners in Canada put it off for as long as possible. Partly because it feels like an arduous task and partly because they are not sure where to begin from.

But don’t worry as many small business owners are in the same boat thriving to get their books in order, you are not alone! If you are finding it difficult to keep your books buttoned-up, luckily, there are some simple tricks to reduce the pain around bookkeeping. Here’s your action plan.

1. Understand the Objective.

The foremost factor that can help to get control over your bookkeeping is understanding why you are doing your books in the first place. To be able to file your tax return? To provide supporting documents to a bank for a loan? To provide something to annoying authorities to get them off your back?

Sure, all of these things are genuine reasons. But they are far from the primary objective that bookkeeping serves. All the financial information that gives a snapshot of the business’s performance is backed up by cold hard data maintained through bookkeeping. To simplify, if you don’t know your books you can’t understand your business

2. Unclutter Your House.

This initial step is to spick and span all your records.

• Ensure that all expenses are entered, and books are accurately reconciled. It is essential to affirm that opening balances in your bank and credit cards tally with the records maintained in your bookkeeping system. 

• If you have not done so, get your personal and business accounts segregated immediately. It is essential to have a clear view of your personal and business transactions. 

• Read and review government directives for employees vs independent contractors to make sure that people who work for your business are appropriately classified. Make certain that you know and understand which forms you need to file for employees and contractors when filing your tax return.

• Reorganize all your documents and muck out the unused or inactive items such as old records of former clients or vendors. 

3. Devise a Plan.

You must ensure to embed a culture of keeping records up to the minute all year. It should not be an instruction to follow or be reminded of, instead, it must be a way of working with books.

• Set up regular times each week to ensure that your books contain the relevant and latest information, whether you engage a professional bookkeeper to do this task or you adopt the do-it-yourself approach. It is always advised to recruit a professional bookkeeper to handle this side of your business to let you focus on other aspects of your business as an owner.

• Assess your current bookkeeping procedures to track areas with room for improvement. Determine your serious hot spots, such as tracking of receipts, mileage, or inventory, and seek out ways to streamline your records by using bookkeeping software solutions that align with your accounting software.

• If you are using an online bookkeeping system, put in place features such as bank rules to automatically classify recurring transactions such as subscriptions, loans, and insurance payments. Consider using applications that can facilitate your processes but make sure you understand how they work before you try to implement them. Or if you have a professional bookkeeper on board then he can conveniently sort this technology aspect for you. 

• The regulations and trends in the business world are very robust. In the capacity of a business owner, you must consult with professional accountants to learn about recent changes in tax laws (both federal and provincial), business trends in the upcoming years that may impact your business.  

4. Execute Your Plan

Now that you have designed a plan, stick at it. Program your accounting sessions calendar with a timetable and stand steadfast to it throughout the year. 

A consistent effort at regular intervals makes the bookkeeping process less daunting and provides valuable, timely information to assist in better decision making. Bookkeeping is the bane of most business owner’s existence. Hence procrastinating in this aspect and putting them on the back burner can be one of the fatal mistakes a business owner can ever make. The information generated by your business books is too valuable to delay or ignore.

Our reliable bookkeeping services are designed to make your life easier so that you can focus on other crucial aspects of your business. Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.

Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting firms and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.