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UNITING FAMILIES WITH THEIR GOALS

UNITY FINANCIAL SERVICES

UNITING FAMILIES WITH THEIR GOALS

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📊 Top 7 Bookkeeping Mistakes Small Businesses in Canada Must Avoid

📊 Top 7 Bookkeeping Mistakes Small Businesses in Canada Must Avoid

By Unity Financial Services – Montréal

Bookkeeping is the backbone of every successful business. For Canadian entrepreneurs, keeping accurate financial records is not just about knowing your profits — it’s about staying compliant with CRA and Revenu Québec, making smart financial decisions, and building long-term stability.

Yet, many small businesses fall into common bookkeeping traps. These mistakes can cost you in missed deductions, penalties, and cash flow issues. At Unity Financial Services, we see these errors every day — and we help our clients fix them.

Here are the 7 biggest bookkeeping mistakes small businesses in Canada must avoid — and how you can prevent them.

1. ❌ Mixing Personal and Business Expenses

Many entrepreneurs use the same debit or credit card for everything. While it may seem convenient, it creates confusion at tax time and weakens your ability to claim valid deductions.

Why it’s risky:

  • Hard to prove which expenses are business-related if CRA audits you
  • Higher chance of missing deductions
  • Messy financial reports

✅ Solution:

  • Open a separate bank account and credit card for your business.
  • Link your bookkeeping software (QuickBooks, Xero, Wave) to your business account for automated tracking.
  • Pay yourself through owner’s draws or payroll instead of randomly pulling money.

2. ❌ Not Recording Expenses Regularly

Many business owners wait until year-end to gather receipts. By then, receipts are lost, numbers don’t match, and deductions are forgotten.

Why it’s risky:

  • Missed tax write-offs (like gas, supplies, or software subscriptions)
  • Stress during tax season
  • Incomplete records if CRA asks for proof

✅ Solution:

  • Make bookkeeping a weekly habit (15 minutes every Friday).
  • Use mobile apps to scan receipts and sync them to your books.
  • Hire a bookkeeper at Unity Financial Services to update records monthly.

3. ❌ Forgetting GST/HST/QST Obligations

In Québec, once your revenue passes $30,000 in a single quarter or four consecutive quarters, you must register for GST/HST and QST. Forgetting to register or file on time can lead to fines.

Why it’s risky:

  • CRA/Revenue Québec penalties + interest
  • Loss of input tax credits (money you could get back)
  • Cash flow problems if you suddenly owe taxes

✅ Solution:

  • Register early (even before you hit $30K) so you can claim input tax credits.
  • Mark all filing deadlines in your calendar.
  • Let Unity Financial Services handle your GST/HST/QST setup, tracking, and filing.

4. ❌ Poor Payroll Management

Payroll isn’t just paying your staff. It includes deducting taxes, CPP/QPP, EI, CNESST contributions, and remitting them on time. Missing deadlines or calculating incorrectly can trigger audits.

Why it’s risky:

  • CRA penalties for late remittances
  • Employee dissatisfaction due to errors
  • Legal trouble with labour compliance

✅ Solution:

  • Automate payroll with tools like Wagepoint, QuickBooks Payroll, or use a professional service.
  • Keep updated employee records (SIN, T4/RL-1, vacation pay).
  • Unity Financial Services offers full payroll services including CRA/CNESST compliance.

5. ❌ Not Reconciling Bank Accounts

Reconciliation means comparing your bookkeeping records to your bank statements. Skipping this step means errors go unnoticed.

Why it’s risky:

  • Duplicate entries
  • Missed payments
  • Fraud or unauthorized charges slip through

✅ Solution:

  • Reconcile accounts monthly.
  • Match invoices, payments, and receipts against statements.
  • Use bookkeeping software with auto-reconciliation features.

6. ❌ Ignoring Accounts Receivable & Payable

Many small businesses forget to follow up on unpaid invoices or delay paying suppliers. Both directly affect cash flow.

Why it’s risky:

  • Late payments hurt cash flow and supplier relationships
  • Uncollected receivables = lost revenue
  • Difficult to forecast future expenses

✅ Solution:

  • Send invoices immediately after work is done.
  • Set automated reminders for unpaid invoices.
  • Track aging reports (30/60/90 days overdue).
  • Unity Financial Services can monitor AR/AP so you never miss payments or collections.

7. ❌ Doing Everything Yourself

Many business owners try DIY bookkeeping to save money, but bookkeeping requires knowledge of Canadian tax laws, CRA rules, and Québec regulations.

Why it’s risky:

  • Costly errors lead to missed deductions or penalties
  • Hours wasted on admin instead of growing your business
  • Stress during audits or tax season

✅ Solution:

  • Focus on running your business while professionals handle your books.
  • Unity Financial Services provides bookkeeping, payroll, GST/QST filings, and year-round tax planning.

✅ How Unity Financial Services Can Help You

At Unity Financial Services, we go beyond bookkeeping. We offer:
✔️ Bookkeeping & reconciliations (monthly/quarterly/yearly)
✔️ Payroll services with CRA & CNESST compliance
✔️ GST/HST/QST filings so you never miss a deadline
✔️ Tax planning & business advisory for maximum savings

📞 Call us today: 438-701-3770
🌐 Learn more: unityfs.ca

📍 Final Thoughts

Bookkeeping is not just about compliance — it’s about knowing your numbers, staying organized, and making smarter financial decisions. By avoiding these 7 mistakes, you’ll keep your small business on track and reduce stress at tax time.

With Unity Financial Services as your partner, you don’t just get a bookkeeper — you get a financial ally who ensures your business stays compliant, profitable, and ready for growth.