Starting a business in an industry you’re passionate about can be the adventure of a lifetime. However, if you’re new to running a business, tax time can be a nightmare filled with fines and deductions you can hardly understand.
Here are the top 5 bookkeeping mistakes made by small businesses.
Procrastinating the Paperwork
Very few people enjoy doing bookkeeping. While we understand that you would rather work on the more glamorous parts of your business, leaving all your paperwork to the 11th hour is a recipe for disaster in any industry. Set aside a few hours every week to organize and double-check all of your receipts to avoid that tax-time tragedy.
Merging Your Personal and Business Spending
When you’re a small business owner, it can sometimes be difficult to distinguish between personal and business purchases, but properly calculating your expenses can keep your taxes low and bank account healthy. Track every receipt and sit down with your bookkeeper to discover potential write-offs you never even knew existed.
Forgetting About the Sales Tax
GST/PST/LCT and payroll taxes can be hard to calculate and differ from province to province, but that doesn’t make them any less important come their due dates. Failing to properly report your remittances can lead to hefty fines for your business.
Lack of Communication
Bookkeeping isn’t always a straightforward process, as some billing situations may be complicated and can affect the future of your business. Always keep in constant communication with your bookkeeper in case they have any questions about your practices and plans, or you just might end up with additional fees you hadn’t anticipated.
Not Saving or Backing Up Data
Backing up your tax and billing data wasn’t always a concern, but with accounting apps and tax software now removing the need for piles of paperwork, data crashes have become a business owner’s worst nightmare. Whether it’s a hard drive or a cloud server, backing up all of your files is an easy way to avoid late submissions of your taxes.
CDC Bookkeeping has been serving the needs of Saskatoon businesses for over 20 years, and we’ve compiled some in-depth knowledge of all the accounting problems small businesses may face. Give our bookkeepers a call today at 306-667-2178 or visit us online and have our experts save you the stress of making any accounting errors for your business.