Accounting Tips for Small Businesses Owners in Canada

If you own a small business in Canada, then you must read this article. As an Accountant in Mississauga and Oakville, I will share the best accounting tips that will put your business on the path to financial success.

Accurate Books and Records

Account Tip #1 for Small Businesses in Canada – Keep accurate books and records

As a small business owner it’s very important that you keep accurate books and records in order to:

• Assess the profitability of your business
• Evaluate the financial health of your business
• Cut costs by identifying excess spending
• Have peace of mind when audited by the Canada Revenue Agency
• Apply for a long by presenting accurate financial statements to your bank

Review Financial Reports – Accounting tips for Small Business owners in Canada – Accountant Oakville Mississauga

Accounting Tip #2 for Small Businesses in Canada – Review financial Reports Regularly

A proper accounting system should provide you with accurate, monthly financial reports such as:

• Income statements
• Balance sheets
• Goss margins by product
• Inventory listing
• Cash flow statements
• Budgets
• Financial statements by company division / department

With monthly cash flow statements you can identify the sources and uses of cash, which enables you to better manage company resources.

With monthly budgets for your small business in Canada, you can better plan for the coming months, and effectively manage cash inflows and cash outflows.

With departmental financial statements you can assess the profitability and financial health of each department.

If your current accounting system cannot produce appropriate financial reports, then you should seek the advice of an accountant in Mississauga or Oakville.

Purchase an effective accounting software package

Accounting Tip #3 for Small Business in Canada – Buy the right accounting software

Your small business in Canada requires an effective accounting software package to produce reliable financial reports.

“I recommend accounting programs such as QuickBooks Pro or Simply Accounting, both of which are great for small businesses,” says Allan Madan, Accountant Mississauga & Oakville.

In addition to the right accounting program, your small business in Canada requires an excellent bookkeeper. If you have a good accounting software package, but you lack a capable bookkeeper, then the information produced by the accounting system will not be reliable or useful.

Financial Controls – Accounting Tips for Small Business in Canada – Accountant Oakville Mississauga

Accounting Tip #4 for Small Business owners in Canada – Implement strong financial controls

Effective financial controls are a must for a small business in Canada. A lack of financial controls can lead to unreliable business intelligence, poor financial information and fraud.

Examples of financial controls are:

• Keep receipts for expenses. Without receipts you have no proof of purchases made.
• Maintain a separate credit card for business purchases only. The last thing that you want is a grocery bills or movie tickets appearing on your credit card. Imagine if a tax auditor saw that.
• Have a separate business account for your deposits and your business expenses. There should not be any personal expenses whatsoever in your business account.
• Keep a daily sales log and a deposit book so that you can track sales deposits. This will reduce the chance of employee theft.
• Dual signatures should be required on company cheques. If only one person has signing authority, then that person has the ability to commit fraud by writing cheques for invalid expenses.
• Review and approval all employee expense reports before they are paid, which will keep spending under control.
• Regularly backup your electronic financial data so you don’t permanently lose it

Consult with your accountant in Mississauga / Oakville on how to improve your small business’ financial controls. When handling your financial matters keep in mind the mentioned Accounting tips for Small Business owners in Canada.

ABOUT THE AUTHOR

ALLAN MADAN

CPA, CA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

Related Resources