The client walked into the bookkeeper’s office with a plastic grocery bag full of papers and receipts. “Here,” he said. “All my records for the past five years. It sound be easy for you to do my books and get me caught up, right?”
Wrong. The reality is it will be much more expensive and a lot harder. What was that receipt here from three years ago when you bought something at the store? Was it a business or personal expense? Could you defend your answer if you got audited by Revenue Canada? You can miss some very lucrative deductions and let your business down by making critical mistakes.
Proper bookkeeping is not just for income tax purposes, either. It helps you to properly run your business. If you don’t track what your key numbers are like your customer acquisition cost (how much money you spend to get each customer) or your actual cost of goods sold (COGS) and profit margins then small problems can very quickly become big problems. For example, one clothing store owner was pleased when he took out a newspaper ad for $3,000 and made $9,000 in sales. He tripled his money, right? Not exactly. His profit margin on those sales was only 20%, or $1,800. So he spent $3,000 to make $1,800. Not so great after all when you really look into that weekend. You need someone to help you make sense of those numbers. Think of it as the tip of the iceberg. Remember what happened to the Titanic when it sailed into an iceberg?
Try and ask small business professionals for a recommendation. Who have their clients used, especially a bookkeeper who is familiar with their particular industry? How does the bookkeeper work? Often they will come to your office or place of business. They can also do everything remotely using software like QuickBooks Online. If you are using QuickBooks, ask if the bookkeeper is QuickBooks Pro Certified. They can set up the Chart of Accounts and give you tips to save you both time and money so you can hit the ground running.
To speak with the small business professionals at Canada Business Hub about bookkeepers we recommend and other tips and suggestions, click here.0