If I could give two pieces of advice to every new business and entrepreneur it would be: Look at your numbers every month, and DON’T SPEND CRA’s MONEY!
Look at your numbers every month. This is a MUST! Don’t fly by the seat of your pants! So many business owners fall into the trap of “Bank Balance Accounting”. The bank balance does not show you how much you owe or if your business is even profitable! You could be bleeding money and not even know it! You need to look at your income statement every month to make sure you are profitable, and to course correct AS YOU GO if you are not! You also need to look at your balance sheet every month; know what you owe!
Don’t spend CRA’s Money. You are a tax collector. GST/HST, and payroll source deductions. You see a balance in the bank, and if you don’t know how much you’ve collected on behalf of CRA, the odds are, you’ll spend it. And that is stealing from your employees, and stealing from the government. It causes late filing penalties, interest, and expensive audits. I have seen many businesses ruined simply because the business owner did not know what they owed, and spent it. Look at the balance every month.
In order to prioritize profit and manage your cash flow, you MUST make bookkeeping a priority. There’s no way around it. If you want run a business, you gotta do it with your eyes open if you want to succeed. And the only way to keep your eyes open is to be on top of your bookkeeping. Have someone in house, or outsource it, but whatever you do, make it a priority!
Don’t be a statistic! Make your Mark! Succeed, and keep your eyes wide open!