Do you have a small business and are you planning to do your own bookkeeping?
Accounting is an important step in the tax process, as it organizes all transactions for the year so that tax returns can be filed. It can be used to generate financial reports such as balance sheets or financial statements, which can give a business owner an idea of how their business is doing. For those who are not accountants or bookkeepers, this task can be difficult but with the help of professional accountants you can easily fix it.
Here are some tips to make your business accounting simple and accurate:
Asset Statement Account
It’s easy, efficient and accurate to use a company bank account or credit card for billing. In this way, you can use the business bank statement to provide you with all open transactions, bank statements, etc. If you use accounting software like QuickBooks, you can link your bank account to the software so that it automatically downloads transactions to your QuickBooks.
If you keep your records in Excel, your bank may have the option of downloading your bank statements in .csv format. This way, you get all the transactions in Excel and you don’t have to enter them manually
You can reconcile your account and bank balance to make sure there are no errors. It is important to keep receipts/invoices for 6 years after an audit, but trying to use receipts for accounting can be time-consuming, especially if they are all from the company’s bank account instead of withdrawing all bank account transactions.
There are many transactions that can be withdrawn/deposited directly from the bank account that usually do not provide a receipt (eg: authorized debit transactions, bank charges, transfer charges, etc.), so it is best to use a bank statement to keep track.
If you use a personal card for business transactions, track / include only those transactions (not other personal transactions). These business expenses are effectively financed by shareholder loans (because you are the shareholder using your personal money to pay for the business transaction) and you can refinance them. as such.
Hire Professional Tax Accountants for your business
With the help of professional tax accountants, you can manage your accountants easily. You can get reporting more often than the end of the year, to be able to view / analyze all transactions, automatic invoices and track accounts receivable, work payment, etc.
Know your limits
The most important part of accounting is making sure you follow the rules set forth by the CRA regarding what can be claimed for taxes and to what extent.
In the event of an audit, the CRA may request to see transactions entered into certain accounts and/or receipts, so it is important that all transactions involved comply with CRA standards.
If you don’t know how to set up a business, be sure to keep it and check with your accountant at the end of the year for expenses like home office, car, etc. This is usually self-pay and requires a change, make sure you know the rules and follow the CRA. Click on these links to see our blog posts “Home Office – Is This the Right Deduction for You?” and “What is an eligible deduction for your car expenses?” for more information
It is important to note that the CRA has different guidelines for different types of business (i.e. sole proprietorship, company, partnership), so it is important to know for your business exactly what makes sense. it is up to him to explain.
At Matrix Accounting, we offer bookkeeping and tax filing services, so if you’re new to bookkeeping or prefer to have your accounts handled by a CPA firm, give us a quick call!
