Small-business accounting works best when the records are built into normal operations instead of reconstructed at tax time. A simple system for banking, invoices, expenses, payroll and monthly review gives a Calgary business a clearer view of what has happened and what information still needs attention.
This guide outlines a practical accounting setup for a new or growing business. The exact accounts, filings and reports needed will depend on the business structure, industry and transactions involved.
Keep business banking separate
Use dedicated business bank and credit-card accounts for business transactions. Separating activity reduces the time spent identifying personal purchases and makes bank reconciliation easier. Record transfers between accounts clearly so they are not mistaken for revenue or expenses.
- Deposit business revenue into the business account.
- Pay suppliers and operating costs from business accounts.
- Record owner contributions and withdrawals separately.
- Keep loan proceeds and repayments distinct from sales and expenses.
- Download statements regularly and retain readable copies.
Choose an accounting file structure
The chart of accounts is the list used to classify transactions. It should be detailed enough to produce useful reports without creating dozens of categories that are difficult to maintain. Set up revenue streams, direct costs, operating expenses, assets, liabilities and owner or shareholder accounts that match how the business operates.
If the business uses cloud accounting software, establish user access, bank connections, document storage and a backup or export routine. Software does not replace review: imported transactions still need consistent classification and reconciliation.
Create an invoicing and collection routine
Invoices should identify the business, customer, date, goods or services, payment terms and applicable sales tax. Use a consistent numbering sequence and record payments against the correct invoice. Review unpaid invoices on a regular schedule and document credits, refunds or write-offs.
- Issue invoices promptly after the work or agreed milestone.
- Record the payment method and deposit date.
- Review the accounts receivable report.
- Follow up on overdue balances using a consistent process.
- Keep contracts, estimates and change approvals with the customer file.
Control bills and expenses
Enter supplier bills with the invoice date, due date, amount and expense or asset category. Keep the supporting document attached to the accounting record where possible. A current accounts payable list helps distinguish amounts already paid from bills still outstanding.
For credit-card and electronic purchases, retain the supplier receipt as well as the payment statement. A statement shows that money moved; the receipt explains what was purchased and may contain sales-tax details needed for the record.
Set up payroll and GST/HST records
A business with employees needs records for hours, gross pay, deductions, employer amounts, remittances and year-end slips. A GST/HST registrant needs sales and purchase records that support the amounts used in each return. Record the applicable reporting periods and due dates in the business calendar rather than relying on a general tax-season reminder.
KL Accounting provides separate payroll support and GST filing support when these accounts are part of the business.
Use a monthly bookkeeping close
A monthly close is a repeatable review of the accounting file after the period ends. It reduces the amount of unfinished work carried forward and gives the owner a defined point at which reports can be reviewed.
- Enter or import all transactions for the month.
- Attach missing invoices and receipts.
- Reconcile bank, credit-card and loan accounts.
- Review unpaid customer invoices and supplier bills.
- Compare payroll and GST/HST balances with filed or scheduled amounts.
- Investigate unusual, duplicate or uncategorized entries.
- Save the month’s main reports.
For help maintaining this routine, see our Calgary bookkeeping services and accounting services.
Read the main reports together
The income statement summarizes revenue and expenses for a period. The balance sheet shows assets, liabilities and equity at a point in time. A cash flow statement explains cash movements. These reports answer different questions, so reviewing only the income statement can leave bank, debt or working-capital issues unnoticed.
Compare reports with prior periods and the operating budget where one exists. Large changes should lead to a question and a review of the underlying transactions, not an automatic conclusion about business performance.
Prepare for year-end throughout the year
Maintain records for asset purchases, financing, shareholder activity, payroll, sales tax and unusual transactions as they occur. At year-end, confirm the final statements, receivables, payables and inventory information before the tax-preparation file is assembled.
The CRA’s business record guidance explains the types of records businesses keep and the responsibilities that continue when a third party maintains the books.
Accounting support for Calgary small businesses
KL Accounting & Tax Associates helps Calgary businesses set up and maintain bookkeeping records, reconcile accounts, prepare financial reports and organize year-end information. The work is based on the business records and services agreed for the file.
Book an appointment to discuss the accounting workflow your business currently uses and the records that need attention.
