Bookkeeping is more than just keeping track of where the money comes from and where it goes. It determines your financial future and helps you make wise decisions for consistent business growth. Even the slightest mistake in bookkeeping can break your entire business or rip apart the finances. Thus, it is crucial to hire a professional to take care of your bookkeeping in Alberta and help you stay away from unnecessary penalties or financial problems in the future.
5 Mistakes to Avoid While Doing Bookkeeping in Alberta
Here are the five most common bookkeeping mistakes that can take a toll on your business. So, make sure you avoid them at any cost.
Most small businesses have a petty cash drawer. You may use it to purchase petty items such as break room supplies, office supplies and more. Though petty, these expenses still count. Right?
You may end up spending more than you had planned if you don’t keep track of the smaller expenses. It is important that you include these miscellaneous expenses in your daily cash flow. There are professionals who can take care of your bookkeeping in Alberta in case you don’t have the time to do it on your own.
According to expert chartered accountants, combining personal and business finances is nothing but a bane to businesses. You should use a business account to handle expenses for businesses only. Keep the personal tax account separate. This ensures that you don’t spend business funds for personal purposes.
Bank account reconciliation is an important part of accounting & bookkeeping in Alberta. It is the process of updating your books with bank statements. This helps you account for any contradictions between your bank transactions and books. It is imperative to update your books daily. It is a good practice to reconcile bank accounts every month. Moreover, it helps you understand your financial situation better.
Receipts serve a significant purpose- they help you keep track of expenses, whether small or big. Thus, accountants can include all your expenses for that year while preparing your taxes easily. Also, you will have the essential documentation ready if the IRS questions your return. So, do not take your receipts for granted to ensure 100% accurate financial accounting. The receipts also help categorize expenses accurately.
Bookkeeping in Alberta isn’t a child’s play. Most businesses fail to look at the bigger picture in an attempt to manage bookkeeping and accounting. Moreover, bookkeeping increases in complexity as your business expands. It is always better to trust a professional with the bookkeeping. Meanwhile, you will have enough time to focus on growing your business.
Bookkeeping is not an option but a necessity for all businesses. Avoid the above-mentioned mistakes to enable smooth and efficient bookkeeping. However, if you want to relieve yourself from bookkeeping complexities, contact Border Bookkeeping.