1.Keep all of your receipts in one place.
It is a good idea to keep a pouch or envelope for receipts in your car or briefcase. Don’t worry about sorting the receipts into separate categories, just throw them in. When getting your receipt from a store or restaurant, make sure you save the original bill. A debit or credit card receipt will not be sufficient if you are audited.
2.Set aside time for your books
If you take as little at 15 minutes a week to sort receipts, you will find that entering later will be much easier. Set aside a block of time every week where you can sort your receipts and invoices into categories. It is a good idea to file all unpaid invoices into one file. This way you can have a better idea of who you owe money to. When invoices are paid, file them into a monthly folder.
3.Keep Business and Personal Expenses Separate
When sorting your receipts, try to keep business and personal receipts separate. If you have a bill that has both personal and business expenses, take a highlighter and highlight all of the business expenses on that bill. If you are working out of your home, make sure you go through your phone bill and highlight all of your business long distance calls and internet charges.
4.Save all asset receipts
If you purchase an asset, save the bill for your accountant at year-end. Assets can include anything that is a large purchase (usually over $300) that will be amortized over time. This can include computers, large equipment and Vehicles (if they are bought by the business).
5.Keep a up to date year end file for your accountant
Put all important papers in a file for your accountant immediately after you get them, this will make sure that you are not frantically trying to find important tax information the night before your taxes are due to be in.
Make sure you set aside home expenses if you have a home office, government payments (such as Source Deductions, PST, GST and Corporate tax assessments), asset receipts for any equipment bought in the year, and a listing of bad debts for the year.
6.Know When your Deadlines are
Make sure you have a calendar in plain sight where you can keep track of your government payments and their due dates.
Payments can include:
Source Deductions (15th of the month)
PST (20th of the month)
GST (Depends on when your year end is and whether you are quarterly, yearly or monthly)
7.Use a computer
If you do not have access to an accounting program, it is still a good idea to use a computer to track your expenses and sales. You can use a spreadsheet program like Excel or Works. This will save you time at your month end and year-end. It is also easy to sort expenses by date, name or category once you have it entered on a spreadsheet.
8.Send Monthly Statements to Customers
If you keep track of your receivables on an accounting program, or even on a spreadsheet, make sure you take time at the end of the month to see who still owes you money. Send out a monthly statement to the customers who are slow to pay. Sometimes they just need a little reminder. If you are sending monthly statements, you can also add interest to people who pay too slowly. This is a good incentive for people to pay on time.
9.Try to Reconcile your Bank Monthly
It is easier to reconcile monthly, that way you can spot any mistakes made in your entering or mistakes made by the bank early on. Also, it is easier to remember what a debit purchase was for a month ago than six months ago.
If you find that you are spending more time on your books than on your business; outsource your bookkeeping to a bookkeeper. Remember, you didn’t start your business to do books, if you did, you would be a bookkeeper!