Unless you’re an accountant and love working with numbers, online book keeping is probably not your favorite job. increase. So, we’ve rounded up his five tips on accounting for small businesses. You probably have many financial details of your business in your head:
Which supplier pays, which customer is better, etc. It is understandable. No need to learn new software. No risk of system crash or loss of all data. You can adjust your budget as often as you like. I have to sit at my desk. However, poor systems and processes can lead to unpleasant surprises, goal achievement, and forgetting important documents. By managing your money better, you can meet and sustain your long-term goals, smooth seasonal fluctuations in cash flow, and even improve your bottom line.And avoid trouble with Canadian tax authorities.
Plan for bigger expenses
Be honest about the costs you may face in the next 1-5 years. Is it possible that your system needs to be modernized? Are you short of office supplies? It’s important to consider the seasonal ups and downs of your business and how that affects your spending opportunities during this time. Avoid underfunding in good months and underfunding in bad months by reliably predicting major upgrades and skyrocketing labor costs.
Tracking your spending can be difficult. That means you may miss out on tax credits that you were supposed to benefit from. A business credit card is a convenient tool that allows you to track all your expenses in one place. As long as you keep your payments up to date. Most providers today use a service that categorizes invoices by expense type. In preparation for the audit, it’s also helpful to note the customers you meet at each of these coffee appointments, lunches, and events on your calendar. This will help cover your tax filing costs if you get audited. This also applies to car mileage. Track mileage on long drives to meetings, use Google Maps to do calculations, and record travel distances and associated costs.
correctly book the down payment
Try to keep track of what goes into your business’s bank account. For example, a notebook and pen, an Excel spreadsheet, or financial software like Sage. Various deposits can be credited to your account throughout the year. From loans to sales income to financial infusions from personal savings. If you can’t explain where each deposit came from, pay taxes on money that isn’t your profit. set aside money for taxes
You know you have to pay taxes and you know when to pay them. Therefore, systematically put money aside. Unpaid taxes can lead to fines and interest from the CRA, so make sure you have the money when you need it. Setting aside money each month or each time the contract is paid off will make it less of an annoyance when the due date arrives.
Keep an eye on your bill
Late or unpaid invoices can negatively impact cash flow. Assign someone to track your bills. Next, set up an outstanding billing process. This could be his second charge and he can even call you and impose penalties such as extra charges for certain deadlines. Plan when a customer is 30, 60, or 90 days behind him. Note that delinquency is an interest free loan and will negatively impact your cash flow.
ask for help here
Did your accounting tips help? Small Business BC offers a variety of seminars and one-on-one consulting sessions for any business, no matter where it is located or the challenges it faces.