The end of the month can sneak up very quickly on small business owners. With a long list of to-dos, organized accounting records can find themselves at the bottom of the list. However, It is SO important to keep good records for tax time. Spending those few hours at the end of each month will keep your business in good standing with the CRA.
Accounting tasks can be manageable
In efforts to make it a little easier on you hard working business owners, here’s a summary of monthly accounting tasks to ensure get checked off the list.
Accounting tasks don’t have to be daunting. Here’s a tip I share with my clients; block time in your calendar at the end of each month and set it as an appointment to complete the following accounting tasks. Read on to the bottom of the blog for another accounting tip to make HST payments a bit less painful.
In addition, you can also add to the monthly accounting tasks including;
Reconcile your bank account
This task ensures the completeness and accurateness of the books. This includes reviewing all transactions from the bank for month; ensure deposits have been made, check the income, and record an end balance for the month.
Look at your Income Statement (Profit and Loss)
Review your profit and loss statement once a month, or every three months. Compare it to previous month or the previous quarter (three months). Get a good understanding of money coming in and going out. Are there any significant differences? Can you explain them? Talk to your accountant if you are struggling with this.
Track your inventory
Inventory is important since it can impact your cash flow. Cash flow is the money that is moving (flowing) in and out of your business in a month. Check for any dead inventory (inventory that is not moving), and confirm if the inventory you have on the books is the same you have in an inventory count. You need to have an inventory count at least once a year, and for those inventory items that are replenished frequently, try to count every quarter.
Pay HST on time, EVERY time
Do you pay HST? And if so, do you struggle to pay HST on time? Here’s a suggestion that may help you out. Instead of paying a lump sum put money aside for HST in a separate bank account. This way you are able pay HST outstanding instead of being overwhelmed at the end of the year. You can also elect to pay HST every quarter or the Quick method of HST may be better for your business. Talk to your accountant about HST.
Reach out to discuss your small business accounting and how to find efficiencies in your accounting practices. Email me Susan Ivanovics CPA at firstname.lastname@example.org