Bookkeeping Tips
~ Keep separate bank accounts and credit cards for your business use only. Ensure that all items going through those accounts are directly related to your business. It's not a good practice to mix personal transactions with business.
~ Organize an accordian file folder into sections and label them. Sections could include office supplies, donations, meals, postage, vehicle, bank statements, deposit slips, etc. Place all receipts into the appropriate sections daily or weekly and take this to your qualified bookkeeper on a regular basis!! This will ensure that your receipts won't go missing and that you will receive all of your allowable deductions. (You will really appreciate this the most at tax time!)
~ When paying by debit or credit card, make sure that you staple a copy of the transaction slip to the actual receipt. The Interac or credit card copy itself is not a valid receipt. When paying your bills, record on the receipt portion how it was paid and the date you paid it on.
~ When dining or entertaining clients, potential clients, employees, or suppliers, ensure that their names - and the reason why you are entertaining them - are written on the back of the receipt. Make sure that you include the tip amount in your total. It is up to you to prove to CRA how that expense is directly related to earning you income. Personal meals are not an expense (they are personal!) unless you are out of town or being reimbursed for it. You must be entertaining a client, potential client, employee, or supplier etc in order for it to be considered an expense.
~ Keep a record of all deposits you make in duplicate deposit books. These books are usually available free from your bank. Record who or where the cheques (or cash) you deposit came from and what invoice number they are paying.
~ Know when your reporting deadlines are. It is the business owners responsibility to ensure that HST, Payroll Source Deductions, Corporate Taxes. WCB and/or Installments are filed by their due dates. CRA has costly penalties in place if you don't comply.
~ It's a good idea to keep CRA happy! It's a great way to save money too!