Top accounting tips for small business owners who manage their finances

When you run a small business, there are many everyday operations that you’re not specialized in. This can include things like hiring employees, accounting and payroll, and others. Here at Leonard Tam Professional Corporation, we believe that you can do all these things and do them well. You’ve had the ingenuity to start and run your own business, after all. But you feel like you need some help, we have tips to help with accounting for small businesses in Canada.

Keep thorough records

It might feel tedious and unnecessary, but thorough records are your best defense against financial trouble. With financial records that track every transaction, you have the ability to look through your spending history and analyze your work. Additionally, this makes it easier to track growth and monitor your trajectory year over year.

Open a business bank account

It’s important to keep your business finances separate from your personal money. Open a business account to keep track of your income and expenses so that you don’t find yourself dipping into business funds unnecessarily. This also protects your personal funds from any legal issues that you might have within your business operations.

Keep receipts for donations

Any donations you make, financial or otherwise, are tax-deductible. Keep all receipts that come from donations that you make to track your spending. This makes it easier to claim these deductions as you file your taxes each year.

Keep all receipts

Not only is it best to keep donation receipts, but you should also be keeping all of your receipts. This is part of thorough recording keeping that makes it easier to track your finances every day. Use your receipts to balance your expenditures. This includes everything from major expenses for equipment to the smallest purchases with petty cash. While your budget and bank account might match up at the end of the day, it’s important to manually balance your budget regularly.

Create time to update your books

This brings us to our next point. Make sure that you’re regularly taking time to time update your books. Maintaining a balanced budget takes work, yes, but it’s far less work than what it will take to get your finances back in order if you don’t. Make sure that you have a specified window of time at least once a month to go through your records and update your books.

Invoice accurately

Accurate invoices do more than simply getting the money that you need for products or services rendered. They create records to ensure that you’re able to track the business that you do. Each month when you balance your books, follow up on necessary invoices that haven’t been paid and balance them against your budget and record keeping.

Maintain an accurate inventory

Maintaining an inventory costs money. Few things lead to financial problems more than inventory issues. This can cause overspending on restocking products or losing business because you don’t have enough items on your shelves. If you provide services, maintain an internal inventory of your supplies to ensure that you have what you need to perform necessary jobs and serve your customers. You can minimize your costs by maintaining an accurate inventory.

Contact Leonard Tam

If you don’t feel comfortable managing your own finances, you can all in an expert. Leonard Tam Professional Corporation is here to help. Contact our office today at 416-783-2222 or send a message using our contact form. Leonard Tam and his team are experts in accounting for small business in Canada. You’ll receive advice and services that are designed to keep your business’ financial matters running smoothly.

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