Accounting Tips For Small Business Owners In Canada

It is crucial for small business owners to understand the accounting process in other not to be at a lost. Businessess are owned for the purpose of making profit. In order to have peace of mind and be eligible to apply for a loan, you must have basic knowledge of how to run a business. Below are some Tips For Small Business Owners.

Accurate Books and Records

As a small business owner, its very important that you keep accurate books and records in order to:

  • Assess the profitability of your business
  • Evaluate the financial health of your business
  • Cut costs by identifying excess spending
  • Have peace of mind when audited by the Canada Revenue Agency
  • Apply for a loan by presenting accurate financial statements to your bank

Review Financial Reports – Accounting tips for Small Business owners in Canada – Accountant Oakville Mississauga

A proper accounting system should provide you with accurate, monthly financial reports such as:

  • Income statements
  • Balance sheets
  • Goss margins by product
  • Inventory listing
  • Cash flow statements
  • Budgets
  • Financial statements by company division / department

With monthly cash flow statements you can identify the sources and uses of cash, which enables you to better manage company resources.

With monthly budgets for your small business in Canada, you will be able to plan better for the coming months, and effectively manage cash inflows as well as cash outflows.

With departmental financial statements, you’ll be able to assess the profitability and financial health of each department.

If your current accounting system cannot produce appropriate financial reports, then you should seek the advice of an accountant in Mississauga or Oakville.

Purchase an effective accounting software package

Your small business in Canada requires an effective accounting software package to produce reliable financial reports.

With the right accounting program in Canada, your small business requires an excellent bookkeeper. If you have a good accounting software package, but you lack a capable bookkeeper, then the information produced by the accounting system will not be reliable or useful.

Financial Controls – Accounting Tips for Small Business in Canada – Accountant Oakville Mississauga

Effective financial controls are a must for a small business in Canada. A lack of financial controls can lead to fraud, unreliable business intelligence and poor financial information.

Examples of financial controls are:

  • Keep receipts for expenses without it, you have no proof of purchases made.
  • Make sure you maintain a separate credit card for business purchases only. The last thing you want is a grocery bills or movie tickets appearing on your credit card. Imagine if that is seen by a tax auditor.
  • Open a separate business account for your business expenses and deposits. Ensure there is no personal expenses in your business account.
  • Always keep a daily sales log and a deposit book to enable you track sales deposits. This will not give room for employee theft.
  • Dual signatures is advisable on company cheques. If only one person is authorized to sign cheques, then there is a possibility for that person to commit fraud by writing cheques for invalid expenses.
  • Review and approval all employee expense reports before they are paid, which will keep spending under control.
  • Regularly backup your electronic financial data so you don’t permanently lose it

Consult with your accountant in Mississauga / Oakville on how to improve or grow your small business’ financial controls. When handling your financial matters, do not forget the Accounting tips mentioned above for Small Business owners in Canada.

You can also see how you can enter Canada as a business immigrant.