Although running a small to medium-sized can be rewarding, it can also be exceptionally challenging. To stay on the road to success, you should try to avoid some common accounting mistakes. Errors can be costly in the following ways:
- You could needlessly increase your tax burden.
- Grave mistakes may result in a phone call from the Canadian Revenue Agency (CRA). Dealing with the taxman can result in undue stress.
- Salaries may be paid late or the wrong amount, hurting company morale.
- Expenditures could spike when they don’t have to.
- A significant move for your company could become unnecessarily complex.
Here are some common mistakes you should avoid as a small to medium-sized business:
#1 Not Getting Professional Help
It’s critical to hire a qualified accountant to help your company in different areas. A small accountant like ours can assist you in the following areas:
- Taxation: Our experienced corporate tax professionals provide taxation services to help businesses sort out their taxes and other financial obligations. We help you with business tax returns, tax audits, future tax planning, and more.
- Business Accounting Services: With our professional help, you can streamline your process. We do the heavy lifting for you. We organize financial statements, balance your books, and more.
- Bookkeeping: Our bookkeepers offer monthly, quarterly, and annual bookkeeping services to manage your operations and its finances.
- Payroll: We ensure both you and your employees are paid on time and account for invoices and other fees and expenses. Through our payroll services, we help businesses with payroll, T4&T4 summaries, WSIB, and more.
- Business Registration: When you use our business registration services, you can have peace of mind knowing that we manage your annual return filing, business information changes, minutes books, and corporation share changes.
- Business Consulting: We offer professional business consulting services to help you give your business the best start. Our team can help you establish a business plan, set up your new business, or facilitate a merger and acquisition.
- Online Accounting: Our accounting services are ideal for helping both new companies, and existing enterprises strategize at this time. Through our online small business accounting services — we provide business accounting while prioritizing the safety of individuals.
- Online Bookkeeping: Due to current health restrictions, we are offering online services for business owners. With our online bookkeeping services, we help you keep your books organized at a safe distance.
#2 Not Getting the Right Professional Help
Sure, there are many excellent accounting firms in Ontario. But your small business needs an accountant that specializes in companies of your size and understands the nuances of your business. At Tangs Accounting, we’re an experienced Toronto accountant for small businesses that assists the following industries:
- Bloggers & Creative Professionals
- Insurance Agents & Brokers
- Real Estate Agents & Brokers
- Online Stores & Businesses
- Restaurants & Food Trucks
- Home Repair & Maintenance Services
- Dentists & Orthodontists
- Auto & Glass Repair Shops
- Brick and Mortar Retail Shops
- Chiropractors & Physical Therapists
- Construction & Other Trades
- Law Firms & Attorneys
#3 Hiring an Unqualified Bookkeeper
As mentioned above, bookkeeping mistakes can be costly in various ways. Please always hire a small business accounting team that’s licensed, qualified, and experienced to manage your books. At Tangs Accounting, not only are we CPA certified, but we’re well versed in the process of maintaining and establishing a business’s financials and will walk you through every step of the process. From registering your business to your accounting system’s setup, we will be by your side to help you manage your books.
#4 Not Keeping Expenditures Separate
Credit: Cristian Rojas via Pexels
Sometimes it’s OK to mix business and personal spending. Sometimes it’s even necessary. For example, you may need to purchase with a personal credit card when your business credit card is maxed. However, it’s generally not a good idea to mix business with personal expenditures.
You should create a separate bank account, credit card, and chequebook for your company so you can organize your expenditures.
#5 Not Being Organized
Keeping your books organized and maintaining your receipts is essential. With the correct paperwork, you can have the proof you need in case of an audit. Remember to keep your supporting documents even after your tax year passes. Please note that you must have your supporting documents for six years in the CRA request a review.
#6 Making Mistakes With GST/HST Returns
It’s critical to get your GST/HST returns right to avoid issues with the CRA. As per the guidelines outlined by the Canadian Government, businesses must collect, file, and pay the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST).
Remember, you must file these returns even if you have no business transactions or net tax to remit.
Tangs Accounting Services will help you open and manage your tax account, charge and collect tax as appropriate, complete and file your return, and then successfully pay it.
#7 Not Taking Corporate Taxation Seriously
You must take corporate taxation seriously to maintain seamless operations. At Tangs Accounting, we offer the professional corporate tax preparation services small and medium-sized businesses require.
We will walk you through the taxation process and help facilitate all the paperwork you will need to file your taxes correctly and on time.
Tangs Accounting Services will help you prepare and file your business taxes. From your income tax returns to your GST/HST returns, we help you get all your ducks in a row to ensure a seamless tax season.
We provide tax preparation help and take care of all tedious tax documentation so that you can focus on what you do best — operating your business.
You know your business and your taxes. We know your taxes and how to complete them swiftly and efficiently with the following services:
- T1 Filing: As the sole proprietor of your business, you’re responsible for all your tax obligations and must file a T1 tax return. Remember, even if you need to file a T2 corporate tax return, you must still file a T1 form to reflect your personal income. A T1 can also show all foreign income, including US income. We can help you file your T1 tax return on time and without errors.
- T2 Filing: If you’re not a sole proprietor, charity, a member of a Hutterite colony, or if you don’t have special tax-exempt status, you must file the T2 tax return. With our professional and detail-oriented services, you can meet your corporate income tax responsibilities.
- GST/HST Returns: All registered businesses must collect, file, and pay the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST). They must file the return even if they have no net tax to remit. At Tangs Accounting — we can address all issues related to your GST/HST Returns.
- Non-Resident Tax Issues: If you live in another country, lack residential ties to Canada, or stay in Canada for less than 183 days in a tax year, you must file a T1-NR Tax Return. We help you understand the income tax rules and identify the right channel for you to file and claim your taxes.
- Tax Audit Representation: A reassessment letter from the CRA can be challenging for any busy business owner to manage. We take the burden off your shoulders by dealing directly with the CRA with our tax audit representation services.
- Tax Planning: Proactive business owners can use our tax planning services to stay one step ahead of the tax season.
- Business Advisory: Whether you need to appeal a case, amend previous tax returns, or need any other professional advice, you can rely on Tangs Accounting for input.
- GST/HST Housing Rebate: We can help determine if you’re eligible for the GST/HST rebate for your future investment property. We can also compile all necessary documentation for the return.