 As a business owner you know you are required to track all the financial transactions that flow through your business. So why then do so many owners scramble in March and April getting their books together for tax season? The answer is simple. You are passionate and great at the product or service you offer but for many that is not an accounting business. Here are some tips and tricks to help you avoid the tax season scramble. 1. Why record your transactions If the only reason you are tracking is to be able to file your tax return, you may find that you don’t have the motivation to track regularly. A more motivating reason why you want to keep good records is so you can make business decisions. Do you need to increase the price you charge? Do you have unnecessary expenses that are making you unprofitable? It is difficult to answer these without good financial tracking. 2. What transactions to record When it comes to recording your business dealings, ALL transactions need to be recorded. This includes cash transactions, e-transfer transactions and business expenses you personally purchase for your business. 3. Where to record your transaction For many businesses starting out, a simple excel sheet tracking all of your sales and expenses is enough to get started. If you do choose to invest in an accounting system, make sure you understand how to use it. There is nothing worse than paying for a system, using it wrong and ending up in a bigger mess. 4. When to record your transaction It is recommended to record your transactions as close to the time of the transaction as possible. For some it may not be practical to record each time you make a sale or a purchase. However, getting yourself into a weekly habit of recording all the transactions for the week can be a huge benefit. You can likely remember your transactions for the past week (or quickly figure out what that charge was for). Also recording on a weekly basis for many business owners can take less than an hour of time. 5. Talk to an Expert Are you aware of all the things you can claim as an expense in your business? This is a common problem area. Often times business owners get advice from friends and family about what expenses they are able to claim. When it comes to tax time, Canada Revenue Agency might not agree that the advice is correct. Please remember that every business is different and as a result there may not be a one size fits all approach when it comes to your expenses Tracking your business expenses may not be the thing that brings you joy. However, ensuring you are properly tracking, with the right tools and on a consistent basis might just be the reason why you can continue the business that is bringing you joy!  Jennifer Hare, CPA
Jennifer is a Financial Coach who has a big passion for helping people feel more safe and secure in their financial situation. Contact her at [email protected] or on Facebook or Instagram
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