Top eCommerce Accounting Tips for Small Businesses in Canada
With the right records, proper accounting software and correct deadlines in place, you can file your taxes stress-free. Avoid tax-season headaches by applying these 5 ecommerce accounting tips.
The tax season is a stressful period for most business owners. Staring at disorganized receipts, inconsistent accounts and poor software is close enough to a nightmare. Unfortunately, the looming tax deadlines only pile onto your stress.
However, with the right guidance, organized records and proper software, filing your taxes can be a seamless process. If you’re trying to stay on top of your books in the next tax season, here are five ecommerce accounting tips you need.
1. Integrate your accounting software with your online store
Running your numbers on napkins and small notebooks in certainly old school. The digital space now supports accounting software that you can integrate with your ecommerce records. Why risk follow-ups by the CRA for suspected false claims?
By integrating your accounting software and your ecommerce store, you can generate electronic invoices and maintain a ledger of bank deposits and payouts. Proper accounting software will ensure that your books are always up-to-date and that you save time during tax season. Your software will also store your records online to ensure that your data stays safe and readily available.
2. Keep clear records of all expenses and revenues
Keeping an accurate record of all your expenses and revenue is essential for filing taxes. First, you can write off some of your costs and reduce the amount of taxes due. For example, if you operate your ecommerce store from home, you can reduce your businesses’ taxable income by deducting your home office expenses.
To ensure that your records are as accurate as possible, store all the transaction dates, shipping items, delivery dates and small purchases such as office staples. If you generate paper receipts, switch to digital receipts for more comfortable and safer storage.
3. Reconcile your accounts
Integrating your accounting software and your bank account is beneficial to record keeping. However, you should ensure that you review the records and reconcile them. Going through your accounts will help you correct duplicates, omissions and errors in the data before the tax deadline.
4. Update your tax settings
When you open a Canadian ecommerce store, the tax settings should be automatically Canadian. If your business operates within the boundaries, then your settings will rarely require changes. However, if you expand internationally, your tax settings need updating.
Using the right settings will ensure that you pay the correct taxes and also take advantage of tax exemptions if they exist.
5. Note the deadlines
Without proper reminders in place, tax deadlines can easily creep up on you. Unfortunately, these deadlines are laden with penalties for your ecommerce store. You can pick any date, even a birthday, to remind you about your tax deadlines.
By following these ecommerce accounting tips, you can rest easier during tax season. Another great tip for better eCommerce accounting is to contact a professional tax accountant for expert assistance.