Year-end bookkeeping tips
Many businesses, both big and small, understand the benefits of hiring an accountant. A qualified accountant can easily and effectively file the accounts and tax returns for your business. That can actually save you money and will certainly save you time. It’s important to hire the right accountant for the job, but regardless of who you hire, if you want them to do their best work you’ll need to do your part, too. For accurate bookkeeping, it’s vital that you provide your accountant with organized and accurate records about your business activity throughout the year. A bookkeeper can help ensure that your books and records are kept properly and accurately, making the accountant’s job easier.
In some cases, your bookkeeper can be the same person as your accountant, but this isn’t necessary. You can have an in-house bookkeeper to take care of everything form accounts payable to payroll, and then an off-site accountant who files your taxes for you at the end of the year. Whichever method you choose, there are a few things you can do to make compile records and tax returns easier and more accurate.
Keep your receipts and invoices organized
It’s important to keep copies of all of your business-related invoices and receipts. This is necessary because it shows proof of the money that comes into and goes out of your business. File them in binders in date order, with the most recent first, moving backwards. Also indicate which account number or invoice number each receipt is related to, for easy reference later.
Keep employee payroll information organized
Keep accurate records of the amount paid to each employee for each payroll cycle, including any deductions taken. Also keep copies of all the year-end payroll forms (T4s) submitted.
Keep deductions in mind
Although you may not know of all of the deductions for which you may qualify, it’s a good idea to keep a list of the kinds of things that may be eligible, such as charitable donations, deductions for your at-home office, etc. Keep all supporting documents, such as utility bills and charitable donation receipts.
You’ll also need to provide your accountant with a list of the inventory you still hold at the year’s end. Outline the cost of those items.
Debts and credits
You’ll need to provide your accountant with a list of all of your debtors and creditors. That is, those to whom you owe money and those who owe money to you. This should be easy if you keep accurate account records all year.
In order for your account to do accurate reporting and bookkeeping Calgary business owners need to do their part and provide accurate and thorough records. Remember that even if your business is always on the up and up with its reporting, there is always the chance that you could be subject to a randomly selected audit from the CRA. When that happens, you’ll need to provide supporting documents for all of the income, expenses and deductions you claim on your tax return.