Tips from the Expert

Here are ten helpful bookkeeping tips to enable your business to run smoother:

Photocopy every cheque you receive, before you deposit it. If you do electronic image cheque deposits (photo deposits), or deposit cheques through an ATM, it is important to keep a copy for your own records. E-deposit policy requires that you destroy the cheque after five or seven days which will leave no record of which cheques from which customers may have formed part of that deposit. Similarly, if you receive payments by Interac e-Transfer, or other electronic means, retain a copy of the payment advice that shows who the payment was from. Seeing a deposit on a bank statement is meaningless if nobody remembers who the deposit came from.

Keep and use a deposit book if you make deposits in-branch. It is extremely difficult to guess what cheques you may or may not have deposited. This is further complicated when you don’t keep copies of the cheques that you deposit. Teller printed deposit receipts are not good enough. Some banks will group the cheques on the deposit receipt, thus showing that five cheques were deposited, but the receipt only shows one total amount. This leads to guessing, which is not good in my business. But hey, I like a puzzle, and as long as you’re paying my bill – er, do what you like with deposits.

Keep your business and personal accounts separate. There are clients who use their business account for everything, which is fine, if you don’t mind paying for higher bookkeeping & accounting fees. To minimize work for your bookkeeper, try to keep your personal life out of the business documents.

On your receipts, write a quick note about what it is for. For example: “Lunch meeting with Bob from Acme Widgets”; or “data stick for office.” You see, some suppliers use obscure codes for product descriptions, which makes the items you bought impossible to decipher for the person who didn’t attend that store to purchase that product.

When your bookkeeper tells you to pay source deductions tomorrow, make a note & do it. Failure results in the CRA charging steep penalties & interest.

Ask your bookkeeper or accountant to explain what the various reports or financial statements actually mean, how to interpret them, which numbers you really should worry about. Don’t feel dumb, ask for explanations in layman’s terms, not accountant speak.

Make sure to ask for monthly or quarterly reports. It’s your business, and you should ensure that you understand its financial health.

Do be sure to set money aside for GST and source deductions remittances, or make regular instalments. This applies to corporate tax instalments as well.

Don’t update or upgrade your accounting software without talking to your bookkeeper first. Similar to this is reorganizing your computer files.

If you plan to change your bookkeeper, back-up everything first. Do tell them in advance if it is not a situation of their choosing. A professional will attend to the various clean up items that need to be done, usually for the purpose of saving face. They will want to leave things in good shape, so nobody can call them incompetent. Also, they will make and leave useful notes that will save you money during the transition.

I hope these tips make your bookkeeping experience easier, even if you don’t hire me.

Ready to Go?

If you’re ready to proceed, or need to talk about it some more, feel free to contact me now.