5 Things Small Businesses Should Do Now For Fiscal Year-end

Get your financial house in order with these best practice bookkeeping tips.

As the end of the year approaches, small business owners often find themselves scrambling to get their financial house in order, buried under a pile of receipts, invoices, and financial statements. Year-end tax preparation can be a daunting task, which is why now is the ideal time to clean up your books and, if you haven’t already, implement the proper tools and strategies to better streamline your processes. This not only helps ensure compliance but also will save you time in the long run, and you can rest easy knowing your financial records are in tip-top shape. Let’s look at five key areas to focus on for efficient year-end tax preparations.

1. Use QuickBooks Online

You’ve probably heard it before: QuickBooks Online (QBO) is a game-changer for small business owners. QBO offers a range of features that simplify bookkeeping, including tracking income and expenses, generating financial reports, and managing invoices and payments. Its cloud-based system means you can access your financial data anytime, anywhere, and the software integrates seamlessly with other tools and apps, making it easier to sync all your financial information in one place. The time saved automating these processes through QBO means more time spent on growing your business.

A Certified QBO Expert at Finatics can help you maximize the features of Quickbooks Online to ensure the tool works optimally for your business. Get in touch to explore your bookkeeping needs.

2. Invest in Dext

Say goodbye to endless paper receipts crammed away in that desk drawer or file folder, and say hello to Dext. Another valuable tool for small business owners, Dext automates the collection and processing of receipts and invoices, reducing manual data entry and the risk of errors. Simply snap a photo of your receipts and Dext extracts the key information, categorizing and publishing it directly into your accounting software, such as Quickbooks Online. Having all your financial documents digitized and accurately recorded will make things more organized throughout the year, and easily retrievable during tax season so you don’t miss out on any deductions.

3. Reconcile bank statements

Reconciling your bank statements – matching your business’s financial records with your bank statements to ensure they align – is a critical step in year-end tax preparation. Reconciling helps identify any discrepancies, such as missing transactions or errors, that need to be addressed. Ideally, it’s best to do regular bank reconciliations throughout the year to prevent minor issues from becoming major problems at year-end. 

By ensuring that your records are accurate and complete, you will also have a greater picture of your financial health and allow for more strategic business decisions.

4. Capture investment tax credits (ITC)

GST/HST investment tax credits (ITC) allow businesses to recover the taxes paid on business-related expenses and reduce your overall tax liability. As you go through your checklist for your year-end tax preparation, be sure to also capture all eligible ITC on your purchases. Maximize your GST/HST ITC by making sure all your receipts and invoices are properly documented and categorized – this is where tools like QuickBooks Online and Dext become invaluable. They help keep track of all your expenses and automatically calculate the tax credits you’re entitled to.

5. Check your Canada Revenue Agency (CRA) account

Before closing your books for the year, it’s important to check if your Canada Revenue Agency (CRA) account has any outstanding amounts that may be owing. Your account will provide an overview of your tax obligations, including any outstanding balances or missed payments.

Addressing any discrepancies or outstanding amounts before year-end helps avoid penalties and interest charges. It also provides an opportunity to rectify any errors or omissions in your previous filings. By staying on top of your CRA account, you can ensure that your tax records are accurate and up to date, reducing the risk of audits and other complications.

Year-end tax preparation and regular bookkeeping can be a struggle for many small business owners. If you’ve been struggling all year to get your finances in order, it may be time to on board a fractional bookkeeper so you can get caught up and be confident your financial records are organized, accurate and up to date. Get in touch to meet your trusted Finatics bookkeeper.