As a new business owner do you cringe when you see that little envelope from the CRA show up at your place of business? Then keep on reading!
As a new small business owner there’s an unspoken rule that all entrepreneurs are the wearer of many hats. Many factors attribute to this philosophy especially in larger business markets like Ottawa. When starting off a new business venture the importance of sustainability and longevity are planned through budgeting and forecasting. When preparing these specific components of your business plan every attempt to stretch and maximize company dollars is top of mind.
One of the first areas that new entrepreneurs try to lower annual budgeting expenditures is by not hiring a professional bookkeeper or accounting firm and putting that responsibility upon themselves to execute. Its commonplace for startup businesses to realize the importance of bringing on a professional accounting firm until it’s unfortunately too late. In reality it’s quite possible to save money by outsourcing your accounting! Below are some common mistakes that are made throughout the year and mainly at year end.
Here are some common mistakes for new entrepreneurs:
• Not filing taxes on time or at all,
• Not reporting properly,
• Failing to pay the proper income tax amounts,
• Not paying penalties for accrued amounts owing,
• Claiming expenses that aren’t eligible to be claimed,
• Not documenting travel log books,
• How to properly use director fee’s
• Not hiring a professional accountant or bookkeeper.
As a first time business owner these scenarios are far too common, very frustrating and are certainly scary to deal with, especially if you’re being audited. By hiring the proper accountant with a CPA designation you immediately have the peace of mind of professional advice and adherence to the rules, laws and regulations set forth by the CRA. Here are “5 Accounting tips for the small business” owner to review.
Just remember that a do-it-yourself mentality when it comes to your businesses financial bookkeeping may end up costing you far more money in the long run. It could be a devastating blow and hinder your ability to operate as a company indefinitely. When selecting an Ottawa accounting firm it’s important to do your homework. In 2015 metro news reported that the CRA raided a local tax preparation business that left thousands with improper filings and owing penalties to the CRA. We strongly suggest reading our article on income tax fraud to help avoid these types of problems in the future.
