Running a small business is a lot of work. The majourity of small business owners are solo practitioners who don’t have the resources to outsource. The result of this is common mistakes that often cost more. Here are the top 3 tax and bookkeeping mistakes small business owners make.
- Not recording properly. When you make a mistake you have to record the price and the appropriate taxes on each trasnaction. In QuickBooks mobile app for example, when you click sale receipt, you need to select the customer, how it was paid, the refernce number unless it was paid with cash, where it was deposited to, the item in your product/service list, and then the relevant taxes such as GST, HST, PST, Exempt, or Zero Rated. That’s alot of things you could maake a mistake on. any mistake in the process will result in incorrect monthly and year end accounts.
- Not knowing when to apply to collect tax. Each jurisdiction has their own rules and in order to effeicently pay the taxman you need to be familiar with the rules for your country/state/province. If you collect over the required amount in Gross income and don’t have a tax number you will regret it dearly the following year after you file.
- Not understanding the different types of businesses such as Sole Proprietorship, Partnership, LLP, Provincial Corperation, Federal Corperation and in some cases Professional Corperation. Each has their own pros and cons and you must decide what is better for you and ytour own individual sitation and industry.
To learn more about the 3 common tax mistakes contact me for a consultation.