Menu

Common Bookkeeping Questions New Business Owners Ask

Starting a new business is exciting, but it can also be overwhelming, especially when it comes to managing your finances. Many new entrepreneurs are experts in their trade or service but feel unsure about where to begin with bookkeeping.

If you’ve ever wondered what you really need to do to keep your books in order, you’re not alone. Here are some of the most common bookkeeping questions new business owners ask and clear, simple answers to each.

What’s the Difference Between Bookkeeping and Accounting?

It’s a common question and an important one!

Bookkeeping is the day-to-day recording of financial transactions: sales, expenses, payments, and receipts. Bookkeepers keep your financial data organized, accurate, and up to date.

Accounting, on the other hand, focuses on interpreting that data to prepare tax returns, financial statements, and strategic reports.

In short:

  • Bookkeepers record the data.
  • Accountants analyze the data and deal with business tax returns.

Together, they help your business stay compliant, profitable, and financially healthy.

Do I Really Need a Bookkeeper If My Business Is Small?

Even if you’re just starting out, yes, bookkeeping does matter.

You don’t necessarily need a full-time bookkeeper, but keeping accurate records from day one saves time, stress, and money down the road. It also helps you:

  • Track cash flow
  • Understand your profits
  • Claim every eligible tax deduction
  • Stay CRA compliant

Outsourcing to a part-time or virtual bookkeeper is often the best option for a small business, because you get professional help without the cost and hassle of hiring in-house.

How Often Should I Update My Books?

Ideally, you should update your books weekly or monthly, depending on your transaction volume.

Regular updates keep your financial data accurate and help you spot issues early, such as unpaid invoices, unexpected expenses, or declining cash flow.

Leaving bookkeeping until year-end often leads to rushed, inaccurate data (and expensive cleanup costs come tax time).

What Records Do I Need to Keep for the CRA?

The Canada Revenue Agency (CRA) requires businesses to keep all records that support their income and expenses, including:

  • Sales receipts and invoices
  • Bank and credit card statements
  • Expense receipts
  • Payroll records
  • GST/PST filings
  • Loan documents and asset purchases

These records must be kept for at least six years from the end of the last tax year they relate to, so make sure your files (digital or physical) are well organized and backed up.

What Bookkeeping Software Should I Use?

The right software depends on your business size and needs, but QuickBooks Online is a great option for small to medium-sized businesses

If you’re not sure which is Software is right for your business, your bookkeeper can recommend a platform that integrates with your bank, POS system, and tax filing requirements.

How Do I Handle GST and PST?

For business owners, managing GST/HST and PST is a key bookkeeping task.

You must:

  • Register for GST/HST and PST (if your sales exceed the Provincial threshold)
  • Collect and track taxes on eligible sales
  • File returns on time (usually quarterly or annually)
  • Keep detailed records of all tax collected and remitted

A professional bookkeeper can make sure your tax filings are accurate and submitted on schedule, avoiding costly penalties.

When Should I Hire a Professional Bookkeeper?

If any of these sound familiar, it’s time to consider hiring a pro:

  • The amount of time you are spending on bookkeeping is taking away from you running your business.
  • You’re unsure about GST/HST or PST, payroll, or CRA compliance.
  • You only look at your numbers at tax time.
  • You’ve made bookkeeping errors in the past.
  • You’re behind with your bookkeeping and are not able to catch yourself back up.

Hiring a bookkeeper early helps you build a solid financial foundation and gives you peace of mind that your records are accurate and compliant.

Final Thoughts

Bookkeeping doesn’t have to be complicated, but it does need to be consistent. Getting professional guidance early on ensures your business stays organized, compliant, and ready to grow your business.

At Indigo Bookkeeping Services, we help entrepreneurs set up, manage, and understand their books — so you can focus on what you do best.

Contact us today to schedule a free consultation and start your business off on the right financial foot!

Back