Small Biz Bookkeeping 101: Avoiding Costly Errors

Bookkeeping is the beat that keeps everything in balance in the complex dance of running a small company. However, even the most seasoned business owners occasionally trip over a few steps. Here are a few bookkeeping errors that are unique to Small Businesses and how to avoid them carefully.

1. Misguided categorization: Consider this scenario- you’ve diligently tracked every transaction, but when it comes to categorizing expenses, things go wrong. Incorrect categorization can result in unbalanced financial statements and tax complications. Ensure a consistent and accurate system, possibly using accounting software designed for Canadian businesses. This simple practice can help you avoid headaches during tax season. 

2.  Neglecting Regular Reconciliation: Not reconciling your accounts on a regular basis is like navigating through fog without a compass. Monthly bank and credit card reconciliations are critical for detecting discrepancies, ensuring all transactions are properly accounted for, and maintaining your company’s financial health. Adopt a routine to avoid unpleasant surprises down the road.