From Shoebox To Quickbooks®

by Nrthvanbooks
(Vancouver, B.C.)

Any tips on where to start ... I have a year's worth of receipts, cheques, and statements.

Where do you suggest I start?

Hi!

I'm going to give you two links on my site ... you will have to choose how to proceed.

As it is late in the year and you are probably getting the information ready to file your tax return, this is probably the method you want to use. It involves categorizing and tape listing receipts.

This option is great for filing an audit proof tax return. If you bring your information in this format to your tax preparer, you should be able to reduce your tax bill.

This second option is great if you want a full set of books to help you run your business AND meet your tax compliance obligations.

It is more work than the first option ... but it will help you establish procedures on regularly doing your books.

If it seems too large a task for you, you can certainly hire a bookkeeper to get the past year done ... then you could take over the data entry for the current year ... having the bookkeeper do your year end work each year.

Going this route means you have a second set of eyes reviewing your books ... to ensure you are properly classifying and recording entries.

See you on the next page ... Your tutor Lake

Comments for From Shoebox To Quickbooks®

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Jan 29, 2010

Where to start
by: Shane Holbeck

The best place I would suggest to start is to put a process in place so that next year you don't have the same problem again.

Pick a date, say Jan 1st 2009 and enter every transaction forward from this date, and do each new transaction daily.

Then in your free time, catch up on the backlog, by working backwards.

Shane Holbeck - Accountix

Jan 29, 2010

Catchup Work and Filing Deadlines
by: Lake

Great advice Shane ... to start a new routine by entering every transaction from a particular date forward. I think booking a weekly appointment with yourself is the best way to stay on top of the paperwork.

If this is not the first year in business ... but the first year QuickBooks is going to used, opening balances need to be entered correctly. It's easier to get it right at the start ... than trying to fix it later.

Making the move to QuickBooks could help a small business owner save money ... as it summarizes their business data in the format an accountant likes to see and use.

Small business owners doing their own books should be aware ... that it is very costly (in terms of interest and penalties) to not file income tax returns with amounts owing on time ... not to mention the likelihood of more frequent audit reviews (not actual audits ... but CRA checkups) due to prior non-compliance issues.

The 2009 bookkeeping back work ... given the current time of year (January 2010) ... should be caught up in time to meet filing deadlines. In Canada, they are ... April 30 tax payment deadline ... and June 15 tax return filing.

The Importance of Support Documents

Working backwards means bank and credit card reconciliations won't be able to be performed until all the back work is caught up.

Reconciliations are a must to ensure all transactions are recorded ... if you want to ensure you have accurate financial information and government tax compliance reporting.

While doing their bookkeeping, small business owners should keep in mind that every transaction must have verifiable (and retrievable) support documentation for CRA.

How to Create An Audit Trail explains some things to watch out for ... such as what is a legitimate receipt for tax purposes ... and how to track cash.

Sometimes it is just easier to roll up your sleeves and get the work done ... especially if there are not a huge amount of receipts ... then establish a new routine of booking a weekly appointment with yourself to get the data entry and bill paying done.

Just remind yourself of the benefits of keeping up:

You will know if you have adequate cash flow.

You will know if you are making or losing money.

You will have all the information you need to file all government information returns ... avoiding costly interest and penalty charges.

Keeping up with the books means you are more likely to get all the tax deductions you are entitled to ... as you are less likely to lose your receipts.

QuickBooks® is a registered trademark of Intuit, Inc.

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