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5 Mistakes You May Be Making With Your Bookkeeping

1. Ignoring CRA Correspondence – It's intimidating receiving one of those brown envelopes in the mail. We often think about the worst case scenario. It's usually much better than you think it's going to be. The Canada Revenue Agency seems to show appreciation to businesses who are pro-active, even if you're not able to pay right away. Having a bookkeeper who knows how to properly decipher what steps to take is also a good idea.

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2. Shoebox Bookkeeping – While you may think that bookkeeping is as easy as throwing all of your receipts into a box and handing them off to your bookkeeper a couple of times a year, it isn't. This is a costly mistake. Your bookkeeper will have to charge for you all of the time it takes to sort through the mess, organize everything and try to match up statements with receipts. For every extra minute it takes you to stay on top of things, it saves you money spent on the bookkeeper.

3. Procrastinating With Your Bookkeeping – Even if Shoebox Bookkeeping is your preferred method, be sure that you stay on top of it. As time goes by, things pile up. A cluttered desk is a cluttered mind. With more clutter, it's more difficult to remember details to write down about specifics like income and expenses. It's also just good business sense to know how your business is doing on a regular basis.

4. Not Being Involved – Although bookkeepers are very thorough about their jobs, sometimes mistakes can happen. If you've handed over all of your bookkeeping to a professional and choose not to be involved, that could turn into some major problems. Small mistakes can quickly snowball into bigger, more costly ones. Keep a keen eye on what's going on, after all, it's your business to know about your business.

5. Not Backing Up – With such an important issue such as bookkeeping, it's important to have a backup. Crashed hard drives, lost or stolen laptops, hacking or corrupt files could all seriously impact your business. Consider keeping a backup off site and make sure that it's updated often.

Keeping up with your bookkeeping is a mindset. You need to think of it as a priority to run your business properly. Hiring a bookkeeper can help take much of the weight off of your shoulders, but it's still important to play an active role in your businesses finances.

James Krant – My Numbers Guy

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