Common Bookkeeping Mistakes and How to Avoid Them

Why Accurate Bookkeeping Matters

Accurate bookkeeping is the backbone of every healthy business. Clean records help you make data-driven decisions, stay compliant with CRA and BC regulations, and avoid costly surprises at tax time. Spotting and correcting errors early saves you time, money, and stress down the road.

1. Mixing Personal and Business Finances

The Mistake

• Using personal bank accounts or credit cards for business purchases

• Failing to record personal withdrawals as owner’s draws

How to Avoid

• Open dedicated business bank and credit-card accounts

• Record owner’s draws or equity injections accurately in your ledger

• Link only business accounts in your bookkeeping software

2. Skipping Regular Reconciliations

The Mistake

• Letting bank and credit-card statements pile up

• Ignoring small discrepancies that balloon into bigger problems

How to Avoid

• Reconcile all accounts at least monthly

• Investigate every unmatched transaction promptly

• Set calendar reminders or automate alerts in your cloud accounting platform

3. Neglecting Receipt and Document Management

The Mistake

• Tossing paper receipts or never scanning them

• Relying on memory to record expenses

How to Avoid

• Use a mobile receipt-capture app (e.g., QuickBooks Online)

• Attach scanned receipts directly to each transaction

• Keep digital copies for six years, per CRA requirements

4. Misclassifying Expenses

Common Misclassification

• Recording capital purchases as expenses

  • Impact: Profit accuracy, incorrect CCA claims

  • Prevention tip: Create a separate Fixed Assets account and apply CCA

• Treating personal costs as business

  • Impact: Audit risk, unexpected tax adjustments

  • Prevention tip: Review transactions weekly and correct miscoding

• Grouping dissimilar expenses

  • Impact: Poor budget insights, skewed reporting

  • Prevention tip: Use clear, consistent chart-of-accounts categories

5. Overlooking Sales Tax Rules

The Mistake

• Charging the wrong rate for GST/PST or HST

• Failing to remit on time

How to Avoid

• Set up sales-tax codes in your accounting software (BC’s 5% GST + 7% PST)

• Run a tax liability report before each filing period

• Enroll in CRA’s online services for automated instalment reminders

6. Ignoring Cloud Backup and Security

The Mistake

• Relying on a single desktop file without backups

• Sharing login credentials insecurely

How to Avoid

• Choose a cloud-based system with automatic backups and two-factor authentication

• Grant each user a unique login with appropriate permissions

• Review user-access logs quarterly

Top Bookkeeping Best Practices

• Automate bank feeds and invoice reminders

• Reconcile and review financial reports monthly

• Keep a disciplined file-naming convention for digital receipts

• Schedule quarterly check-ins with your CPA to catch issues early

• Maintain a rolling 6-year archive of your records

Partner with a Kamloops CPA

Clean books drive smarter decisions and smoother tax filings. As a Kamloops-based CPA, I help small businesses across BC streamline bookkeeping, optimize tax positions, and implement best-in-class cloud workflows.

Ready to eliminate bookkeeping headaches? Schedule your free consultation and get your records in order before your next year-end close.