Accounting Tips For Canadian Small Businesses.

 Hello Everyone, 

My name is Devansh Khajanchi and I am a member of the professional accounting body - ACCA (Association of Chartered Certified Accountants). I have 3-5 years of international experience in the accounting industry. I have experience in Accounting, Finance, Taxation, and Business Consulting for small-medium scale businesses, sole proprietors, and corporations. Currently working as Accountant and Business Analyst for Accounting and Business Consulting Firm based in London, Ontario which also targets/focuses on Canadian Small Businesses practices and how we can help small business owners. This blog is also focused on Accounting and Bookkeeping Tips for Canadian Small Businesses. 

Accounting is an essential task for Canadian small businesses. To make sure that the business owners are provided with accurate information which reflects the financial health of an organization because, on the basis of the accounting ratio, it will help the business owners to take business and financial decisions. As per my interaction with lots of clients in my day-to-day life, business owners get overwhelmed with invoices, bills, bank statements, and lots of other CRA-related documents, that's when as accountants we enter into the picture to provide them with the Accounting and Assurance services. The following are a few accounting tips for small businesses and business owners.

1. Keep Information Accurate

The first process in accounting is to collect and store the records accurately whether in paper or a digital format. I suggest to my all clients to record and collect the data according to a monthly basis and a folder for the categorization of all the information. For instance, all sales are to record in one folder, all COGS or direct materials or supplies in one folder, and all other General & Admin expenses in another folder and so on. This process will keep all the records for the month organized way. And this has been really helpful when and if CRA audits in the future to provide them with all relevant information. 

2. Separate Business and Personal Finance

This focuses on materiality and only relevant business expenses are considered in accounting. Therefore, it is simple we advise all the clients to have separate business and personal bank accounts, so the error of recording the personal expenses to the business gets eliminated. And if sometimes the business bank accounts are used for personal expenses just highlight the transaction in the business bank account, so this way we (accountants will be updated on that information). 

3. Stay On Top Of Invoicing

Now, this has a direct impact on the business's profitability and the working capital in the business. Whenever a business provides goods or services to its customers, it should be invoiced to them promptly. To solve this problem we advise clients to invest in a sales invoicing system or software such as QuickBooks, Square, etc. so the invoice to their customer is sent when the transactions are occurred and can also have a track when the invoices are getting paid or are not paid according to the credit days. 

4. Digitalize The Documentation

In the era of digitalization and automation, it is very important for business owners to invest in Information Systems in an organization. Let's assume all the records are uploaded to Information System instead of maintaining the paper-based system, this will be less time-consuming for both business owners and accountants to access the information, and information will be received in a timely manner, and most important the information will be secured on the datasets of the Information System. In this way, it will also allow the business owner to focus more on the business part rather than organizing records.

5. Know Your Tax-Obligation

This is the most essential part for business owners to have knowledge regarding their business. Basically in Canada, there are three types of taxes (I) HST/GST (II) Payroll Taxes and (III) Corporations Taxes or Personal taxes. It is important to have an idea of when you are required to register for the HST/GST (if your sales revenue exceeds $30,000) if you have employees then payroll tax liabilities to the federal and provincial government and lastly the corporation tax liability for generating a profit by doing business. 

6. Review Your Finances Regularly 

For this, I would suggest that the business owner hire a professional accountant who will overlook the accounting aspect and will provide them with appropriate reports at the end of each month. For instance, providing the clients with a health-chart report on their business for the period end and in comparison with the previous period, whether the sales are growing or not. These factors will help business owners to set a goal, prepare business strategies, and grow further. 

In conclusion, bookkeeping is an essential part of managing your small business finances. By following these tips, you can stay organized, track your income and expenses accurately, and make informed decisions about your business. 

Below I have attached my professional resume so that it will help me and others to grow our network and connections. 

Link to my resume: Devansh Khajanchi, ACCA.docx

I believe this blog was resourceful and provided a little insight into how small business owners can manage their accounting. 

Thank you for reading. 

Devansh Khajanchi, ACCA