To run a successful business, you’ll need to stay on top of accounting, bookkeeping, and taxes. Not sure where to start? We’ve put together some information and helpful resources that will give you the confidence to know you’ve covered your basics.
Why is it important to keep good financial records?
The success of many businesses is measured by whether they made money or lost money in the previous fiscal year. Your entrepreneurial vision may define success differently—did you expand, did you give back to the community, did you hit sales targets—but that won’t matter if your financials aren’t in order.
Good financial record keeping will:
- Keep you informed about your business’ past and present performance
- Help you stay in control of the cash flowing in and out of your business and give you the information you need to make good business decisions
- Satisfy Canada Revenue Agency, Canada Pension Plan, Employment Insurance, Department of Finance, Goods and Services Tax, and Workers’ Compensation requirements, and help you make accurate, timely remittances to avoid costly late filing penalties
- Increase your business’ chance of staying in business and earning a profit
- Help you forecast and budget for future expenses and revenues
- Help you obtain financing
Bookkeeping and Accounting
What is bookkeeping?
Bookkeeping is the process of recording all financial transactions made by a business. Bookkeepers are responsible for recording, classifying, and organizing every financial transaction made through the course of business operations. It’s important to know that bookkeeping differs from accounting.
What is accounting?
The accounting process uses the records (books) kept by the bookkeeper to prepare the end of the year accounting statements and accounts.
Download our Financial Fundamentals Guides and learn the basics of financial management for your business, including how to calculate your breakeven point, understand basic financial terms, and choose the right accounting software for your business.
Can I do my own bookkeeping/accounting?
While completing your own bookkeeping can seem like a cost-effective way to stay on track, it can be time consuming and frustrating for most business owners. It’s important to price your products and services in a way that allows you to afford a good bookkeeper and accountant as soon as possible. This will allow you to spend more time building the business. Build the cost of this support into your Breakeven Analysis as you think about your pricing strategy.
Bookkeepers can:
- Record all your expenses and revenue (income)
- Prepare month-end financial statements
- Work with accountants to prepare year-end financial statements and file tax returns
Bookkeepers are less costly than you think!
Accountants can:
- Conduct financial reporting and analysis to give you an accurate picture of your business’ financial health
- Conduct financial audits to make sure your business is in good financial health
- Act as a business consultant. They are often an invaluable source of advice, helping you maximize profits and stay financially stable throughout the life of your business
- Offer bookkeeping services: if yours doesn’t, ask them for a referral to a bookkeeper they trust
- Assist with managing payroll obligations
- Help you navigate the complex strategies needed to obtain business financing from banks
Your industry may require specialized accounting skills. Talk to your industry association or business network to find accountants that have experience in your industry.
