5 Common Bookkeeping Mistakes Small Businesses Make

Below are the 5 most common bookkeeping mistakes we see – along with real-world examples and practical solutions to help you stay compliant and in control.

1️⃣ Blurring the Line Between Business and Personal Cash

Typical scenario : You swipe your personal Visa for a client lunch or pay the phone bill from the company chequing account.

Why it stings Come audit time, the CRA wants clean evidence that an expense is 100 % business-related. If your transactions overlap, allowable deductions disappear and your credibility nosedives.

Smart workaround:

• Open dedicated business banking and credit-card accounts on day one.

• Log only company-related costs there.

• Add a short, descriptive memo to every transaction so you remember the purpose months later.

2️⃣ Treating Receipts Like Confetti

Typical scenario: Small slips for parking, printer ink, or coffee meetings lie crumpled in glove boxes—then vanish.

Why it stings “No receipt, no write-off” is the CRA’s mantra. Lost paperwork equals dollars left on the table.

Smart workaround:

• Snap photos of receipts with a mobile app the moment you get them.

• Store PDFs in a cloud folder organised by month and vendor.

• Request proper invoices (with your company name) for any spend over a few hundred dollars.

3️⃣ Waiting Until Tax Season to Reconcile

Typical scenario: You plug numbers into Excel once a year—usually the night before your tax appointment.

Why it stings Undetected errors snowball. When bank statements don’t match your books, you risk misreporting income or GST/HST and triggering penalties.

Smart workaround:

• Reconcile bank, credit-card, and PayPal feeds every 30 days.

• Investigate and clear every unmatched transaction immediately.

• Let cloud software import feeds automatically so you’re reviewing, not typing.

4️⃣ Guessing at Expense Categories and GST/HST Credits

Typical scenario: Fuel gets lumped into “Office Costs,” marketing invoices marked “Misc,” and GST/HST columns ignored altogether.

Why it stings Misclassification means over- or under-paying tax and forfeiting legitimate input-tax credits the CRA owes you.

Smart workaround:

• Build a clear Chart of Accounts tailored to your industry.

• Tag GST/HST on each entry—or let accounting software do it.

• Have a pro review your coding quarterly to catch slip-ups early.

5️⃣ Keeping Only One Copy of Your Financial Data

Typical scenario: All records live in a single Excel file on your laptop—until a coffee spill or ransomware strike wipes it out.

Why it stings The CRA requires six years of retrievable records. Data loss can force the agency to estimate your income and deny deductions—costly and stressful.

Smart workaround:

• Use cloud-based bookkeeping platforms with automatic backups.

• Schedule weekly exports to an external drive stored off-site.

• Test your restore process once a quarter so you know it works.

🛠️ Let TiKi Tax Bullet-Proof Your Books Mess-free bookkeeping frees you to focus on sales, not spreadsheets. TiKi Tax sets up airtight systems, cleans historical data, and files on schedule—100 % remotely and at start-up-friendly rates.

Ready to tame your books?

📲 Book a complimentary strategy call at TikiTax.net or dial 236-788-7799 today.

Small lapses shouldn’t derail your big vision—partner with TiKi Tax and keep your numbers audit-ready all year.