Bookkeeping is a necessary function for all businesses.
If you are not well organized and do your daily operations correctly, it can be an expensive venture for a business.
To make sure you are getting the most out of your bookkeeping money, here are some time saving tips for you!
- Always use business bank/credit card accounts for business and personal bank/credit card accounts for personal. Do not mix the purchases or the accounts.
- If you are cash based, match the receipts to your bank/credit card statements in the order they appear on the statement
- Sort your receipts by how they were paid (credit card, bank card, cash, etc)
- Use cash / personal debit cards as little as possible. Make sure you separate out your cash paid receipts in a separate envelope.
- If you use email transfers, make sure you document where they went to as bank statements do not clearly define that for the bookkeeper.
- If your bank does not include the cancelled cheques with the bank statement, make sure you are keeping your cheque stubs neat and clear so that it is easy for your bookkeeper to see where the money is going
- Bring in your paperwork at the minimum every quarter to your bookkeeper. It is less paper for them to sort through, and any questions are earlier in your memory.
- Clearly identify when you have transactions to clients that you do NOT charge GST on (ie. Government offices, exempt services, etc)
- Any transfers to/from the shareholder should be documented or clear. We suggest using a “cent” system. Every time you do a personal transfer, always do it in an uneven cent. For example, if your “cent” number is 77, then you would always do a transfer ending in .77. If you transferred $1000, then you would transfer $1000.77. This makes it easier for you to remember is personal monies and makes it easy for your bookkeeper to identify it as well.
- In many cases, the bookkeeper will assess any deposits to your bank account as a “sale” and assess GST on that money. If you have money going into your account that is NOT a normal sale, make sure you identify it.
- If you use your personal bank accounts to pay bills, make sure you submit them and clearly identify the business expenses.
- Let your bookkeeper do your payroll for you. Payroll has many rules around it. Make sure you are paying employees correctly. Additionally, most software makes the T4 process quick and easy if the payroll is done by your bookkeeper all year.
- Do not scrimp on your bookkeeping bills. Driving your bookkeeper to “be cheaper” will only result in errors and missed expense reporting! You will have a cheaper bookkeeping bill, but you will pay more taxes. If your bookkeeper misses a $200 expense because they were trying to hurry, this is $28 in taxes more you will have to pay. Imagine the cost to you in taxes if this was $5000 is missed expenses over the course of a year? This is $700 in additional taxes.