It can be easy to overlook specific accounting activities when running your business. The realty is – your busy! But if you keep these next few things in mind and on your daily checklist, they will keep you in the clear and complying with CRA. It is easy to comply but it can be just as easy to forget to do your housekeeping for this part of the business. So here are a few golden rules to avoid those common mistakes.
#1 Keep a log book on you at all times
If you have a company vehicle, which most of you do, you are familiar with the daunting log book. It can be a royal pain to keep this updated, especially when you keep putting it off and let it build up to the point where you have no idea what needs to be logged and all of the sudden you have 5,000 kms that are unaccounted for. Our advice? don’t just leave your log book in the car, keep it with you at all times! This way if your waiting in line for coffee or have a spare moment between meetings you can take the time to properly update your vehicle log book. Don’t forget to be as detailed as possible, it will help you in the long run. Questions you’ll want to answer: Where did you go to and from? What was the date and time? What was the purpose?
#2 Leverage your calendar to keep expenses up to date
It is very easy to premeditate whether or not your business meeting is a company expense. So go through your calendar every morning and figure out where you might find yourself expensing items for your business. If you’re unsure about what daily transactions are business expenses read our previous article here. Your calendar is also a great way to double check if you have accounted for all of your business expenses for a specific day or period of time. Like that trip downtown to pick up those business cards, where is that receipt?
#3 Audit, audit, audit!
Maybe you have an accounting department or maybe you are the accounting department. Either way, performing a daily audit for small businesses or routinely contracting an auditor for larger businesses is an extremely beneficial process. Balancing your books on a daily basis is a great way to stay on track. You want to make sure that what was recorded happened, the amounts match up and everything has been tracked. At the end of the day you should know what came in and what went out and you should be confident that your records accurately reflect just that.
These 3 simple rules can help you avoid one of the biggest mistakes entrepreneurs make, inaccurate records!