Tips for Staying on Top of Your Business Expenses & Income
Were you caught off guard on how much you owed the government this year? I definitely know the feeling! However, here are some tricks I learned over the past few years that helped me ensure I knew exactly what would be owed to the tax man.
1. Organizing your Expenses
You’d be absolutely amazed what you can write-off as an expense when you’re self-employed. Before placing my receipts in any kind of box, I’d also log them into an expense sheet on Excel or Google Sheets for each month. The break down of my expenses would be the following: Rent, Utilities, Business Supplies, Business Expenses, Car Expenses, Travel and food (50%).
2. Organizing your Income
On a similar Excel or Google Sheets document, it’s extremely important to log all the income you’ve earned, along with any HST collected that was received for the month. Keeping track of my income monthly, helps me figure out which months I’ve hit my financial goals, but also what is owed to the government. The nice thing about HST, is that when you collect HST, you can subject the HST you’ve paid on your expenses (balance goes to the government if you have a surplus)
3. Give yourself a Quarterly Review:
Have you ever wondered why large corporations focus more on quarterly reviews instead of monthly or yearly? Well so did I, but when I started doing quarterly reviews on my personal business it helped me realized a lot. I was able to determine which quarters were financially strong and which quarters I had to be more careful on spending money due to a trend of that specific quarter being slower than others.
4. Have a Proper Book Keeper if you can’t do it yourself
I’ve touched base on book keeping in #1 & #2. I’m emphasizing this because if you’re not the greatest with math or just inputting numbers (which I’ll admit, I’m guilty of), it’s extremely important to get yourself a book keeper to input everything for you. When you have proper book keeping, you’ll have greater piece of mind when you know the true numbers of your business and where you stand financially.
5. My gift to everyone
Here is a Google/Excel Sheet that I created for my book keeping. You can edit it to your liking.