7 common bookkeeping mistakes that cost small businesses money
From mixing personal and business spending to missing GST credits, here are the bookkeeping mistakes we fix most often for Fraser Valley businesses.
After cleaning up hundreds of sets of books for small businesses across Abbotsford and the Fraser Valley, we see the same expensive mistakes over and over. The good news: every one of them is avoidable. Here are the seven that cost owners the most.
1. Mixing personal and business spending
Running personal purchases through the business account (or vice versa) is the single most common mistake we fix. It costs you twice — once to untangle at year-end, and again in shareholder-loan adjustments. Open a dedicated business account and keep the two worlds separate.
2. Not reconciling every month
If you only look at the books once a year, you're guaranteeing a painful, expensive cleanup. Reconciling your bank, credit card, and loan accounts every month against the statement eliminates roughly 80% of year-end headaches.
3. Missing GST Input Tax Credits
The GST you pay on fuel, materials, software, and subcontractors is money you can claim back — but only if it's recorded. Messy books mean thousands of dollars in ITCs left on the table. Proper bookkeeping recovers every credit you're legally owed.
4. Falling behind on payroll remittances
The CPP, EI, and income tax you withhold are trust funds. 'Borrowing' from them to cover a slow month triggers penalties of up to 10% and can make directors personally liable. Never touch source deductions — automate the remittance instead.
5. Expensing equipment that should be capitalized
Writing off a $15,000 piece of equipment in full instead of capitalizing and depreciating it distorts both your profit and your balance sheet. Lenders notice, and so does the CRA. Big purchases need to be recorded correctly.
6. Losing receipts
No receipt, no deduction if the CRA asks. Use a tool like Dext, Hubdoc, or QuickBooks' built-in capture — snap the receipt and attach it to the transaction. Your future self (and your accountant) will thank you.
7. DIY bookkeeping when your time is worth more
If you're spending several hours a month wrestling with the books, that's time not spent running or growing your business. For most Fraser Valley small businesses, outsourcing bookkeeping pays for itself in recovered time, fewer errors, and lower accountant fees.
Recognize a few of these? We can help. Book a free consultation and we'll tell you exactly where your books stand.