Entrepreneur Tool Kit – Bookkeeping and Tax Tips Making History – Lockview High’s First

Entrepreneur Tool Kit Bookkeeping and Tax Tips for Small Businesses

You have finally found your passion; you have full control of the direction of the business and you can now plant roots within your community — running your own business is rewarding.

Even though the passion you have for your business is its driving force, you need to implement proper administrative and organizational habits for the business to succeed. It is imperative to be on top of your bookkeeping ‘game’. If you are not careful, poor tracking of your expenses and cash flow may leave you in the red. Here are a few tips to avoid that:

1. Choose the right bookkeeping software

Choosing software that allows you to work smart and not hard will ease the burden. It will also give you more time for operating the business. Some examples of well-known bookkeeping software are: • Oracle NetSuite • Intuit Quickbooks • Freshbooks • Invoice2Go Most of these software programs offer services such as tracking cash, inventory, foreign currency transactions, and points of sale.

2. Organize your business documentation

You need to ensure you track every single business transaction and properly organize them. Failing to do so could create confusion during month end, creating unnecessary work for yourself and your bookkeeping team. There are a few ways you could organize the data: • The paper system — use your old school methods of writing and filing physical records (aka the shoebox method). • The electronic system on your computer’s hard drive to create an Excel spreadsheet to store data on your computer. • Online documentation system — using an online platform to upload information to the Cloud.

3. Keep track of cash payments

Whenever you receive cash, deposit it to the business account before it’s spent. This prevents you from forgetting to input a transaction or forgetting which customer has paid. It is embarrassing to call a customer asking for payment when you have already been paid.

4. Understand monthly bookkeeping reports

You need to read and fully understand income statements and balance sheets. This is the only way to know if what you are doing is succeeding. Some business owners realize their mistakes too late when they’ve already accumulated debt with no money to service it. This will also help you to prepare for tax season.

5. Be diligent with sales invoicing

When a job is complete, send the customer an invoice so you will start receiving income. This ensures a healthy bank balance. This may not apply to businesses that operate on a cash basis, as cash comes in at the time of sale.

6. Pay your employees on time

Employees rely on salaries to eat and pay their bills. Delaying paycheques results in huge (and often unpleasant) issues in staff relations. Ensure with each pay run that you put money aside to cover the payroll taxes deducted from the employee’s pay. File all payroll returns on time — filing late could incur fines and penalties.

7. Keep personal and business banking separate

One of the simplest ways to get into tax trouble is having personal expenses recorded as business expenses. Ensure you open a bank account for your business. Set up your business accounts in the very beginning to allow you to have a strong start in preparing your business’ growth. This will guarantee you do not mix up transactions when transferring information onto your balance sheets or income statements.

Sometimes, especially at the start of the businesses’ growth, you are the customer service agent, the office administrator, and the bookkeeper (and every other role in between). This can become overwhelming very quickly. Outsourcing is cost effective because you only need to pay for the hours worked and it avoids errors. (An old maxim is to sell your skills and buy your weaknesses.)

Here are a few businesses within the Halifax Regional Municipality that offer accounting and financial services:

Davies Accounting and Financial Services

64 Carnaby Cres., Dartmouth NS B2V 2R3 (902) 434-8606 www.davies-accounting-services.ca/home.html Email: accounting@ns.sympatico.ca.

The Southwind Group Accounting and Financial Services

Suite 211 – 1478 Main Rd., Eastern Passage NS B3G 0E6 902-407-4909

Delmore “Buddy” Daye Learning Institute

Excellence in Africentric Education & Research

“I am because we are” ” – UBUNTU, AFRICAN PROVERB–

As an Africentric Institute, our mission is to create learning opportunities for Nova Scotians of African descent. We are experts in Africentric education and research. We also focus on building government and community-based relationships and improve the understanding of Africentricity.

ENGAGE WITH US! www.dbdli.ca

The anticipated debut by a biracial community leader and citizen activist, exploring his lived experience of systemic racism in North America and the paths forward.

BLACK & WHITE

An Intimate, Multicultural Perspective on “White Advantage” and the Paths to Change Stephen Dorsey Also available in French: NOIR et BLANC

Un regard intime et multiculturel sur « l’avantage blanc » et les voies du changement

$24.95 | memoir 978-1-77471-036-4 (eBook Eng) 978-1-77471-052-4 (eBook Fre) 978-1-77471-053-1