Five Tips For Better Bookkeeping
As a business owner, apart from running your business activities, you also need to look into your accounts and ensure your books are in order. If you have up-to-date and accurate accounting records, your company will be on the road to success. But, if you fail to focus on your accounting tasks, your business can quickly sink before it has the chance to grow. To help you manage your bookkeeping better, here are five tips for better bookkeeping that every business should know.
Tip #1: Be accurate when counting HST
It is the responsibility of Ontario business owners to collect and remit HST. Mistakes made with HST include undercounting it, overcounting it, tracking ITCs on transactions that don’t carry it, and arithmetic errors. Errors made on the accurate tracking of HST will negatively impact your business in the short run, and in the medium to long run when the CRA decides to examine or audit your HST return. The more errors the CRA examiner finds the worse the result will be for you on the HST report under examination and on subsequent returns. Do yourself a favour, and get it right the first time.
Tip #2: Don’t double count your sales
It may surprise you to know that some owners have inadvertently double-counted revenue on their bookkeeping and even the accountants did not catch the mistake. When an owner with this situation sold the business she was subsequently sued for overvaluing the business. Before the sale of the business, that owner paid too much in corporate tax and passed along too much HST to the CRA.
Tip #3: Don’t overpay your vendors
When your work week gets busy, you have deadlines, and the stakes are high, it’s easy for vendor relations to fall low on the priority list. But don’t let it. Accidentally overpaying a vendor because your records are not up to date and you don’t recall if you paid that vendor or not, or you pay way too late and incur interest charges and a bad credit rating. Some vendors will upsell you and overcharge various items either through administrative errors or through aggressive practices and it takes time to notice these things and defend your cash flow from needless outflows.
Tip #4: Don’t put all your eggs in one or two baskets
Most of us are familiar with this expression, but let’s examine specific pitfalls to this in relation to your business. If too much of your sales come from one or two customers and they experience business constraints, this will in turn impact your business directly. If you spread your sales across many customers you will minimize your vulnerability and risk.
Tip #5: Delegate, delegate, delegate
One of the biggest barriers to growth that businesses owners face is becoming bogged down by non-revenue generating activities, such as bookkeeping. Falling behind on your bookkeeping means you are not benefiting from accurate and timely financial information. Assigning your bookkeeping responsibilities to a team of experts will alleviate a big burden and open up a window of opportunities for you. You will gain valuable insights into your financial data, enabling you to make more well-informed business decisions. Delegating will alleviate the stress and uncertainty that comes with doing things without a full spectrum of knowledge.
If you are looking for a bookkeeper in Toronto, Ontario, then reach out to Freestone Associates. I provide over thirty years of multi-industry bookkeeping and office management experience, a modern Bachelor of Commerce and Project Management certificate. This translates into a pragmatic business sense, keen attention to detail, timely and reliable bookkeeping services geared to your needs, and savings to improve your cash flow. My team members are number lovers with eagle eyes. We want to add the most value to stabilize your business and provide the right foundation for business growth. We offer our bookkeeping services to clients across Etobicoke, Toronto, Mississauga, North York, Oakville, Vaughan, and the surrounding areas.
To learn more about the services we offer at Freestone Associates, please click here. If you have any questions about how we can help you, get in touch with us by clicking here.