Frequently Asked Questions on Accounting Tips

Joyce Zhao
May 8, 2024
min read

1. How can I ensure compliance with sales tax laws?

To ensure compliance with sales tax laws, it's important to be familiar with the regulations in your home province and any province where you conduct sales. Speak to your accountant about where you operate and the significance of your business presence in each province to determine whether there is a need to register to collect and remit sales taxes.

2. How can I effectively manage cash flow?

There are several strategies to manage and enhance cash flow:

  1. Stay current: Regularly review and analyze expenses on a weekly basis
  2. Timing: Ensure payments from customers are received in a timely manner by sending frequent reminders or offering early payment discounts
  3. Invest and grow your cash: Transfer excess cash to a savings account that earns a healthy interest 
  4. Eliminate unnecessary expenses: Prune excessive spending by cutting down on costs that are not driving growth 
  5. Increase your revenue: drive your sales by attracting more customers through marketing, reviewing your pricing, and pursuing upselling opportunities 

3. How frequently should I reconcile my bank account?

Reconciling your business's records with its bank account—ensuring they match—is crucial. It's advisable to reconcile at least once a month, as monthly bank statements facilitate the reconciliation process. This practice helps verify cash flow, identify discrepancies or missing funds, and prevent fraud.

4. What are some common tax deductions for small business owners?

Several expenses may be deductible from federal income taxes, either fully or partially, depending on your business's circumstances. Common deductions include office rent and utilities, computers and software, office supplies, depreciation of machinery, business phone and internet bills, business-related car expenses and mileage, business travel expenses, and business and health related insurance costs.

5. Is it necessary to hire a professional accountant for my small business?

Depending on the complexity and scale of your business, you may be able to manage accounting and bookkeeping on your own. However, larger and more intricate businesses often benefit from hiring professional accountants to handle their financial matters. You can most often combine the services of an accountant that manages your bookkeeping and files your corporate tax return in one package.