|One of the greatest mistakes made by
business owners is not keeping good financial records and making poor
business decisions based on inadequate information.
Collins & Co can help you tailor your bookkeeping and
accounting system so that it will work for you.
An excellent bookkeeping and accounting system is
an absolute must for any business. It is the foundation of the PLAN FOR
The record keeping system does not have to be
elaborate. The simpler the financial record is the better.
- A business expense must be reasonable
and incurred with the expectation that it will earn income.
- Receipts and vouchers must be
retained, you cannot claim them if you don't have them.
- Make sure the date, the payment amount
and who you made the payment to is clearly written on the receipt as
well as if it was paid by cash, credit card or cheque (include the
- File the receipts in the accounting
year that they were created according to the headings used in the
Meals and Entertainment:
- The meal or entertainment expense must
be for a business purpose whether income is earned or not.
- Record the date and client name on the
- You may claim only 50% of the expense
- Maintain a separate business bank
account for company deposits and cheques.
- Deposit all revenues intact to the
account before disbursement.
- Whenever possible pay all expenses via cheque or credit card so there
is a third party record.
- Reconcile the account monthly.
- Maintain a permanent record of assets
for calculation of amortization.
- Assets are items that are greater than
$200 in value.
- Small tools below $200 in value are
capitalized in a special class with a 100% amortization schedule.
Business records and supporting documents must be
maintained for 6 years. Do not destroy records without consulting us.