5 Common Small Business Money Leaks (and How to Stop Losing Profit Before Tax Season)
5 Money Leaks Costing Small Businesses Thousands.
Running a small business in Canada is hard enough without hidden expenses eating away at your profits. It’s like carrying a bucket of water uphill. If there are holes in the bucket, no matter how much effort you put in, it never stays full. In accounting terms, those holes are money leaks: unnecessary expenses, missed deductions, and cash flow blind spots.
As an accountant and business consultant who specialize in small business bookkeeping and operations, we see these leaks all the time. The good news? Once you know where they hide, you can patch them quickly and keep more money in your pocket.
Here are the five most common small business money leaks and how to stop them before tax season.
1. Subscription Creep – The Silent Cash Drain
That $20/month app you forgot about? Multiply that by a handful of subscriptions, and you’re quietly handing over thousands each year. Do a quarterly audit of your recurring charges, cancel what you don’t use, and renegotiate what you do. It’s one of the easiest ways to reduce small business expenses without cutting anything essential.
Quick bookkeeping tip: Record all recurring subscription expenses under a dedicated “Dues/Subscriptions” account in your chart of accounts. That way, when you review your books, you can see every subscription in one place and spot wasteful spending instantly.
2. Unclaimed Tax Deductions Small Business Owners Miss
Many small business owners miss out on legitimate write-offs like home office space, vehicle mileage, and even part of their cell phone bill. Leaving these unclaimed is basically tipping the CRA. A bookkeeping checklist for small businesses can help you stay organized and maximize deductions during tax season in Canada.
👉 Download the Free Bookkeeping Checklist here: https://falconsightaccountinginc.ca/s/Bookkeeping-checklist.pdf
3. Late Fees and Interest That Kill Cash Flow
Paying vendors late or carrying balances on high-interest credit cards quietly eats into your profits. These aren’t just minor charges, they add up fast. Setting up automated reminders or scheduling payments in advance can eliminate this leak instantly and strengthen your cash flow.
4. Overpaying Contractors Without ROI Tracking
Hiring is necessary, but every role and service should tie back to growth, efficiency, or compliance. If you don’t measure ROI (return on investment), you risk overspending without a payoff. Regular reviews of contractor and staff performance help ensure that every dollar spent is working for the business.
5. DIY Accounting Mistakes That Hurt at Tax Season
DIY bookkeeping seems like a cost-saver, but it often backfires. Messy books lead to CRA penalties, missed deductions, and poor financial decisions. Without proper small business bookkeeping services, many owners discover mistakes too late. At FalconSight Accounting, we don’t just “plug in numbers.” We provide a Financial Health Review Report—a plain-language analysis that shows you the true state of your business and guides smarter decisions.
Plug the Leaks Before Tax Season
Plugging these leaks isn’t about working harder, it’s about working smarter with your money. To make it simple, we’ve created a free checklist:
At FalconSight Accounting, this is not your ordinary bookkeeping service. Every client receives a Financial Health Review Report to help guide decisions and build long-term profitability. If you find a leak that needs patching, we’ll help you turn your books into a powerful decision-making tool.