Back to school and back to business!

September in Ottawa means back to school and back to work! For new businesses, this could be the right time to hire a bookkeeper. For existing businesses, this may be the time to get your books back on track.  

Are you dealing with any of this?

• You know all the transactions haven’t been entered because your bookkeeper doesn’t know how to deal with an entry or you’re missing backup?

• You’ve been asked by an external user, ie bank, partner, board member, award committee, etc. for your financials but you don’t have them ready, or they are a few months behind?

• You don’t understand all your Canada Revenue Agency (CRA) commitments and due dates?

If you answered yes to one, or all, of the above… you are not alone!  

The good news is there’s no need to be in the dark when it comes to your bookkeeping.

The bad news is there are no true shortcuts in bookkeeping so it’s best to have a professional involved at some stage. 

Whether you are a sole proprietor, partnership or corporation, maintaining your bookkeeping on a timely basis is crucial for many reasons:

• Decisions should be based on accurate numbers,

• You never know when you’ll have an external request, and 

• To avoid interest, penalties and red flags.

Common errors we see throughout the year are: 

• Missing transactions / journal entries, which can change the bottom line drastically.  We see this when reports are asked for too soon after month end.  Documents arrive afterwards, are dated for the closed period, making these financial reports inaccurate. 

• Inaccurate or incomplete financial reports, which can impact your organization’s ability to respond to external requests in a timely manner.  If you need something quickly for the bank, or are up for an award, etc., these external users need accurate, current reports. 

• Missed CRA deadlines, which could be due to misunderstanding the different reporting requirements relating to arrear payments, current year instalments or interest payments and whether you are dealing with Income taxes, payroll or HST.

With CRA, ‘ignorance is not bliss’

CRA is not interested in why you didn’t follow the rules. The reasons “I didn’t know” or “my bookkeeper is new at this,” etc. is not reason enough. From a CRA perspective, if you plan to own a business, you will need to understand all the rules – it’s expected! If CRA suspects any issues, they will insist you get a proper system in place. 

To avoid calls and letters from CRA, spare yourself the anguish and be ready. It’s best to hire a professional bookkeeper in some capacity.

• Ensure the bookkeeper is “formally” trained and has experience in your industry or something similar.  Hire quality!

• Have that professional review CRA’s expectations and deadlines and answer ALL your questions before you get started.  

In 2019, 20 per cent of our new clients were “clean-ups,” meaning we had to correct previous errors or omissions in the bookkeeping. Be proactive, review what you have in place so you’re confident with your figures and reporting.

Not sure where to start?  We break it down into easy steps, let us:

• Ensure you are properly set up.  

• Train you if you want to do anything relating to your bookkeeping. 

• Check-in prior to yearend to ensure there are no surprises at tax time.

The more you understand and follow good bookkeeping practices, the better you will feel making “educated” decisions for your current and future business needs.

Sandy Tunwell is the founder and managing consultant of accountrain inc.