Top 7 Bookkeeping Mistakes Canadian Small Businesses Make (And How to Avoid Them)
Think your books are “good enough”? These common mistakes could cost you big time.
Running a small business, freelance hustle, or real estate side gig in Canada means you already wear enough hats, bookkeeper probably wasn’t one you planned on. But whether you're DIYing it or outsourcing, avoiding common bookkeeping mistakes can save you stress, money, and potential CRA penalties.
Here are the 7 most common bookkeeping mistakes Canadian business owners make and how to avoid them.
1. ❌ Mixing Personal and Business Expenses
Charging your Netflix, coffee runs, and gas under your business card? That’s a fast track to messy records and CRA headaches.
✅ Fix: Open a separate business bank account and credit card. Keep all business expenses clean and traceable.
2. ❌ Ignoring GST/HST Tracking
If you’re registered for GST/HST, failing to properly track tax collected vs. tax paid is one of the most common and costly mistakes.
✅ Fix: Use software (or a smart Excel template) that automatically tracks your sales tax and always reconcile before filing.
3. ❌ Falling Behind on Bookkeeping
Letting your books pile up for months (or years)? You’ll miss deductions, forget transactions, and stress out during tax season.
✅ Fix: Schedule a weekly or monthly check-in to update your books or use a catch-up bookkeeping service (we offer flat-rate clean-ups at FalconSight).
4. ❌ No Receipt Management System
The CRA expects documentation even for digital purchases. Not having receipts can result in denied deductions.
✅ Fix: Use tools like Hubdoc or Dropbox folders, or scan and store them in a labeled Google Drive. Digital receipts are valid, just make sure they’re organized.
5. ❌ Misclassifying Expenses
Labeling your new laptop as “office supplies” instead of “equipment” may seem minor, but it affects depreciation and reporting accuracy.
✅ Fix: Follow CRA-recommended categories or get help setting up your chart of accounts properly or let us handle the stress.
6. ❌ Relying Only on Bank Balances
Your bank balance ≠ your profit. If you’re not reconciling regularly, your numbers are lying to you.
✅ Fix: Reconcile all accounts monthly. Use your income statement and balance sheet, not your bank app to guide decisions.
7. ❌ Not Asking for Help Early Enough
Many business owners wait until tax season (or a CRA letter) to bring in a bookkeeper. By then, it’s damage control.
✅ Fix: Partner with a bookkeeping pro who can keep your books clean year-round or at least do quarterly check-ins.
💡Bonus Tip: Need Help with Cash Flow Budgeting or Forecasting?
Staying compliant is just one piece of the puzzle. If you're planning to grow, applying for funding, or just want clarity over your financial future cash flow forecasting is essential.
At FalconSight Accounting Inc., we also help small businesses:
Build realistic cash flow projections
Create monthly/quarterly budgets
Spot potential shortfalls before they happen
Understand what they can afford to invest, save, or pay themselves
Whether you're looking to stabilize or scale, we’ll tailor a simple, actionable forecast using your actual numbers and show you how to stay on track.
🧾 Let’s Clean Up Your Books and Plan Your Future
If you’ve made some of these mistakes, you’re not alone and it’s fixable.
FalconSight Accounting Inc. offers:
1–3 year Catch-Up Bookkeeping Packages
Cash flow budgeting and forecasting
CRA-ready reports
No subscriptions or hidden fees
✅ Transparent.
✅ Virtual.
✅ Designed for Canadian freelancers, startups, and real estate pros.
Book a free consult or explore our pricing at:
👉 falconsightaccountinginc.ca