11th, Mar 2021

More mistakes with your bookkeeping means more work!

By now we can say that our insights into managing accounts might have been beneficial for all of our amazing followers reading our blogs. Understanding the various factors which we need to keep in mind while in business is the main principal of bookkeeping.

As we talked about the mistakes small businesses make in regards to the financial aspect, let’s continue discussing about many more of them which either seem very minor or are completely neglected by many businesses!
A seemingly unimportant task that many business owners want to ever focus on is saving their backup documentation of receipts for the big and small purchases in a business. Accounting is a subject which requires you to track income and expenditure at all times. It’s not difficult to save every receipt the moment an expenditure is made or invoice a client once a job has been completed. Make sure that you have a folder in place that allows you to categorize all of your business expenses. This will make it alot easier for your accountant or bookkeeper to reconcile in the future. Also, a neat tool known as HubDoc can be used to help your business capture receipts virtually, allowing you to have backup documentation even after the writing on the receipts have been worn out!

Another thing which most businesses ignore is internal financial controls to avoid any frauds. The reason for such tendency to become a bit careless once your business starts to grow. Most entrepreneurs feel confident in thinking that having a bunch of employees in a small set up cannot result in any issues. But that’s not true, it can happen if every employee is not given a specific duty rather than be exposed to every area of accounting business. This way the work and method would be segregated to minimize if not avoided every loophole. Helpful also would be to either oversee the bookkeeping work yourself or hire more than one accountant to make sure that employees are properly tracking the day to day sales, expenses, and inventory.

Everyone is aware of the fact that today’s world is technology driven and almost everything depends on it. We rely on technology heavily these days. Being in a business has a prerequisite to have paper proof of your receipts rather than just being paperless. What for? Well, what if you are asked to provide a paper proof of some of your documentation during an audit by the CRA? How will you justify for not having one just because everything is sitting in your computer system which might be temporarily down? Depending on paperless system would not be wise in such situations. Paper record is a must all the time as some auditors will penalize you for not having a physical copy of the receipt.

Keeping the above points in mind will be very helpful for not only the business but for you as an individual too. Getting yourself to do all of the above will bring a discipline and a way to work in an organized manner. Going back every now and then to check back if every norm is followed will save you of major setbacks which may pile up if not attended on a regular basis. Come back for more, till then happy accounting!

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