Fraud prevention
Cheque fraud is common, so set clear boundaries with your bank. Put limits on cheque amounts, use a separate account for payroll, make business cheques out to businesses rather than individuals, and keep your cheques locked away.
Up-to-date record keeping
Keep current records of all your financial activity: bills paid, payroll, expenses and income. You will need them at tax time, and it helps enormously if they are already up to date.
Check your billing statements
Look for extra or hidden charges. Left unnoticed, they add up quickly. Make sure you are billed only for the goods and services you actually received.
Review your expenses
While you check statements and invoices, look at what running the business costs. If one area looks expensive, there may be a cheaper alternative.
Get help with the books
If you are too busy to keep your own records, have someone else keep track of your transactions. It does not have to be full-time. A part-time bookkeeper lets you stay on top of your finances and still focus on the business.
Purchasing limits
Set limits for purchases, and require approval above a set amount, from you or a manager. Make sure purchase orders and expense reports are complete, with a note on why each purchase is needed.
Outstanding balances
Watch your receivables. If unpaid invoices pile up, tighten your collection policy. Put your payment terms on every invoice and agree them with the client first. 15 to 30 days after delivery is normal. Late payers are sitting on your capital.
Keep learning
Tax rules change every year, so keep up with the CRA’s changes. A short course or some reading each year keeps you aware of the rules.