In a nutshell, bookkeeping is maintaining and updating financial records and checking for accuracy. This means reporting funds that are paid to a business as well as funds the business spends. Reports are then generated on the income and expenses which come in on a weekly or monthly basis.

In a business, it is important that records are accurate. At Ashcroft & Associates, we use a variety of accounting software to make this process easier. This includes Sage, QuickBooks and QuickBooks online, Caseware as well as the ProFile tax program. These programs make it simple to analyze and print records when required.

The benefits to maintaining accurate records can help a company manage its cash flow and have a good overview of both its profits and losses. With this information readily at hand, a company can easily make plans based on current and past financial performance. Also, bookkeeping allows a company to stay abreast of where every dollar that comes into the company goes, reducing the chances that someone may illegally keep some of the money for himself. However, one of the most important reasons for bookkeeping is the Canada Revenue Agency. CRA requires all businesses, even small and home-based companies, to keep accurate records. Federal and Provincial tax agencies have these requirements as well, and there are stiff financial penalties for those that fail to comply.

The records generated by bookkeeping often come into play at tax time. A company can use these records to determine how much tax it must pay to the various tax agencies. If one of the agencies discovers a discrepancy on a tax return, the company can then turn to these records to prove a figure.

A business that has a lot of income and expenses may hire a professional bookkeeper to provide record keeping services. At Ashcroft & Associates we are well-versed in tax requirements which will give your business an advantage over companies that try to figure these things out on their own.