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Five Bookkeeping Tips for Entrepreneurs

Apr 15th 2019 at 4:43 AM

Good bookkeeping services in Mississauga ensure that records are easy to access whenever they are needed. This is the best way to avoid the pain of having to go through the CRA audit process. That said, maintaining well-kept financial records can also be one of the most difficult aspects of small business owners and entrepreneurs to maintain. A report by Score Association suggests that up to 40% of small businesses dump 80 hours or more into tax preparation. That’s a lot of wasted time and dollars.

That said, good bookkeeping practices can be the difference between sink or swim when it comes to managing cash flow. According to Start Up Canada, almost half of all small to medium sized businesses fail within their first five years. This is why it is important for entrepreneurs to focus their energy into developing good bookkeeping habits. So they will have access to all the information they need to keep them ahead of the pack and rest easy knowing that there won’t be any unpleasant surprises during tax season.

Here are Five Essential Strategies that Entrepreneurs Can Use to Improve Their Bookkeeping Skills

1. Keep Everything and Back Up Your Records

One of the most important financial habits that an entrepreneur can develop is to learn how to keep every single financial record. This means all sales receipts, invoices, balance sheets, bank and credit card statements, and profit and loss statements. Don’t let anything fall through the cracks.

2. Make Use of Technology

Small business accounting software is designed to make bookkeeping in Mississauga easier for entrepreneurs. There is no reason not to take advantage of this type of user-friendly, easy-to-learn technology. Just be sure to find a program that makes all the information that you need readily available.

3. Keep Track of Every Invoice

Small business owners need to be especially vigilant to ensure that their money doesn’t stay out of their hands longer than it should. If cash flow is unnecessarily halted, everything else falls behind as well.

Extending vendor credits with concrete deadlines are a good way to avoid leaving too much money on the line.

4. Receivable Payments and Borrowed Loans Should Always be Kept Separately

It is important for small business owners to ensure that their financial software keeps borrowed loans and money coming in from the business itself in separate files that are easily trackable. Otherwise, it is all too easy to lose count and get a distorted picture of what the business is really bringing in. In turn, this can easily lead to big financial mishaps.

5. Use a Business Credit Card for All Financial Transactions

The great thing about a business credit card is that it comes with it’s own internal record keeping system. The fact that business owners will need to check in regularly to keep up with their payments ensures that they also get a good grip on the kind of money going in and out.

Entrepreneurs who take the time to go over their financial records on a regular basis will be able to address small issues before they become large problems. They will also have the information that they need to adjust to any missteps or issues as they go. This is why it is a smart idea to set aside a few hours on a weekly basis to check in and review credit card statements as well as other financial records.

The thing is that entrepreneurs already have a lot on their plate, and it is all too easy for finances to quickly spiral out of control. The best way to be certain that nothing has been overlooked and everything has been handled, is to enlist qualified professional bookkeeping services in Mississauga to manage all corporate bookkeeping services. Having a professional on board to handle and maintain all financial records will free up valuable time and ensure that you never run into costly problems and hiccups come tax time.

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