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10 Bookkeeping Tips Every Small Business Owner Needs to Know



Running a small business is exciting, but let’s be real—bookkeeping isn’t always the most thrilling part. However, keeping your finances in order is crucial for growth, tax compliance, and stress-free financial management. If you’re tired of last-minute scrambling during tax season, these bookkeeping tips will keep your business on track and your sanity intact!

1. Separate Business and Personal Finances

Mixing business and personal expenses is one of the biggest mistakes new business owners make. Open a dedicated business bank account and use a business credit card to keep transactions organized and avoid tax-time headaches.

2. Keep Track of Every Expense

Don’t let small expenses slip through the cracks! Use bookkeeping software like QuickBooks, Xero, or Wave to log receipts and track spending in real-time. Even minor purchases can add up, affecting your bottom line.

3. Use Cloud Accounting Software

Spreadsheets are great, but modern cloud-based tools offer real-time tracking, automation, and easy collaboration with your bookkeeper. Platforms like QuickBooks Online or FreshBooks help streamline your workflow and reduce errors.

4. Set Aside Money for Taxes

Nothing’s worse than getting hit with a massive tax bill you weren’t prepared for. Set aside a percentage of your revenue for taxes in a separate savings account. A good rule of thumb is 25-30% of your income (depending on your tax bracket).

5. Automate Your Invoicing

Late payments hurt cash flow, so automate your invoicing process. Use tools that send reminders and allow clients to pay online. Services like Stripe, PayPal, or Square make it easy to accept payments and keep cash moving.

6. Reconcile Your Accounts Monthly

Regularly comparing your books with bank statements prevents errors and fraud. Make it a habit to reconcile accounts at least once a month so you can spot discrepancies early and keep your records accurate.

7. Track Accounts Receivable and Payable

Know who owes you money and when you need to pay bills. A clear view of your receivables and payables helps you manage cash flow effectively and avoid late fees or missed payments.

8. Go Paperless

Digitizing receipts and important financial documents saves space and makes organization easier. Use apps like Hubdoc or Expensify to scan and store receipts, ensuring you never lose an important document.

9. Hire a Professional Bookkeeper

DIY bookkeeping works in the beginning, but as your business grows, a professional bookkeeper like Transfigures Bookkeeping can save you time and prevent costly mistakes. They can provide financial insights, ensure compliance, and free you up to focus on running your business.

10. Review Financial Reports Regularly

Understanding your financial reports (profit & loss statement, balance sheet, cash flow statement) gives you clarity on business performance. Reviewing these monthly helps you make informed decisions and spot potential problems before they escalate.

Final Thoughts

Good bookkeeping is the backbone of a successful business. By following these tips, you’ll stay organized, improve cash flow, and make tax season a breeze. If you’re feeling overwhelmed, don’t hesitate to reach out to Transfigures Bookkeeping for expert guidance!

💡 Need help with bookkeeping? Contact us today at isna@transfigures.ca or call 705-881-6437!

Location: Barrie, ON, Canada

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