Tag: record keeping for entrepreneurs

The small business accounting records to keep in Canada

We know it’s not exactly the most thrilling part of being a Canadian entrepreneur, but keeping accurate financial records is important. The length of time your business needs to keep records of all activities is six years. Along with your financial statements (balance sheet, income statement, and cash flow forecast), you’re required to keep records for all the individual accounts that make up those statements.

What accounting records do I need to keep for a Canadian business?

In Canada, the major accounting records that you must accurately keep are:

  • Accounts Receivable: Who owes you, how much do they owe, and for how long have they owed you?
  • Accounts Payable: Who do you owe, how much and for how long?
  • Inventory: How much did you buy; when did you buy; and how much did you pay? How you account for your inventory will affect your cost of goods sold.
  • Payroll: Total salaries paid to employees, payroll taxes and deductions.
  • GST/HST and Provincial Sales Tax: All businesses with an income greater than $30,000 per year are required to collect and submit on behalf of the federal government a goods and services tax (GST) and, depending where your business operates, provincial sales tax (PST) or harmonized sales tax (HST).
  • Cash: Cash inflows and outflows should be recorded to maintain proper control of cash.
  • Fixed Assets: What you bought, how much you paid, and when you bought, along with depreciation amounts.
  • Other Records: Such as insurance, leases, investments.

We recommend you look for accounting software that’s easy to set up and use. You can ask your accountant for their advice on which program would be best for you and your business.

Software can be useful, but remember that outside accounting advice is important to small business success. Accountants see loads of businesses in different industries and can help you understand and manage the financial health of your company. They also remove some of your own stress about important financial details.

Share this post:

What accounting records should Canadian entrepreneurs keep in 2023?

We know it’s not exactly the most thrilling aspect of Canadian small business sometimes, but keeping accurate financial records is important. Along with your financial statements (balance sheet, income statement, and cash flow forecast), you’re required to keep records for all the individual accounts that make up those statements.

What accounting records do I need to keep for a Canadian business in 2023?

In Canada, the length of time your business needs to keep records of all activities is six years. The major accounting records that you must accurately keep are:

  • Accounts Receivable: Who owes you, how much do they owe, and for how long have they owed you?
  • Accounts Payable: Who do you owe, how much and for how long?
  • Inventory: How much did you buy; when did you buy; and how much did you pay? How you account for your inventory will affect your cost of goods sold.
  • Payroll: Total salaries paid to employees, payroll taxes and deductions.
  • GST/HST and Provincial Sales Tax: All businesses with an income greater than $30,000 per year are required to collect and submit on behalf of the federal government a goods and services tax (GST) and, depending where your business operates, provincial sales tax (PST) or harmonized sales tax (HST).
  • Cash: Cash inflows and outflows should be recorded to maintain proper control of cash.
  • Fixed Assets: What you bought, how much you paid, and when you bought, along with depreciation amounts.
  • Other Records: Such as insurance, leases, investments.

We recommend you look for accounting software that’s easy to set up and use. You can ask your accountant for their advice on which program would be best for you and your business.

Software can be useful, but remember that outside accounting advice is important to small business success. Accountants see loads of businesses in different industries and can help you understand and manage the financial health of your company. They also remove some of your own stress about important financial details.

Happy organizing!

Share this post:

Accounting records that small business owners must keep

It may not be fun, but as a small business owner you’re required to keep accurate financial records of all activities for your company for six years.

In addition to your financial statements, you’ll need to to keep accurate records for all the individual accounts that make up those statements. Here are some of the major ones:

  • Accounts receivable – Who owes you, how much do they owe, and for how long have they owed you?
  • Accounts payable – Who do you owe, how much and for how long?
  • Inventory – How much did you buy, when did you buy, and how much did you pay? how you account for your inventory will affect your cost of goods sold.
  • Payroll – Total salaries paid to employees, payroll taxes and deductions.
  • GST/HST and Provincial Sales Tax – All businesses with an income greater than $30,000 per year are required to collect and submit on behalf of the federal government a Goods and Services Tax (GST) and, depending where your business operates, Provincial Sales Tax (PST) or Harmonized Sales Tax (HST).
  • Cash – Cash inflows and outflows should be recorded to maintain proper control of cash.
  • Fixed assets – Record what you bought, how much you paid, and when you bought, along with depreciation amounts.
  • Other records – Insurance, leases, investments.

To support any tax claims for your small business, you’ll need to keep good records. Income records must include the date, amount and source of income as well as sales invoices, contracts and fee statements. Expense records must also show the date, name and address of suppliers/ sellers, name and address of buyers and a full description of the goods or services. You should also keep records of daily income and expenses.

Want more advice? Check out our blog post Tip of the Month: Small Business Record Keeping.

Share this post:

When record-keeping becomes too much

small-business-record-keepingPart of being a successful entrepreneur is keeping on top of your records. But what do you do when, despite your best efforts, you find your records getting too much for you to handle?

Here are some tips on how to manage your record-keeping:

  • Recognize when it’s time to bring in outside help. If you’re too busy or are having trouble understanding the ins and outs, hire a bookkeeper who knows their stuff. This way, you can focus on the immediate needs of your business while ensuring your financial records are taken care of.
  • If you can’t hire outside help, invest in software that can help you by providing a layout, streamlining data and saving time for you.
  • Top up your knowledge. You don’t have to become a financial wizard, but understanding the hows and whys of your records can reduce some of the confusion, thereby making sense of all the various forms and records you need to work with.
  • Stick to a system. Disorganized receipts, invoices, and other records can spell disaster for a small business. Whether your record-keeping system is digital or not, find what works for your business and don’t deviate from it. You’ll be less likely to get lost if you find a system that makes sense to you.
  • Break things down into pieces. You’re less likely to put off a smaller task than you are a large one – plus, it’s easier to understand. For example, if you have a mountain of receipts to organize, start off by categorizing them by date, and focus on getting this month’s receipts in order before moving on through the past.

Keeping good financial records in your small business can be intimidating, but getting out from under it isn’t impossible. Help with maintaining your business records is always available!

For more help with getting your financial house in order, check out our small business online training course!

Share this post: