5 Common Bookkeeping Mistakes Small Businesses Make

Introduction 

Bookkeeping can feel like a never-ending chore for small business owners — but ignoring it comes at a cost. Late reports, missed receipts, and inaccurate records can lead to tax penalties, CRA/IRS issues, and poor financial decisions. 

At Remote Books, we work with hundreds of small businesses across Canada and the U.S., and we see the same avoidable mistakes again and again. The good news? Each of these can be fixed with the right systems and support. 

Here are the five most common bookkeeping mistakes small businesses make — and how partnering with Remote Books can help you avoid them completely. 

1. Mixing Personal and Business Finances 

This is the most common (and most dangerous) bookkeeping mistake we see. Many business owners start by using their personal credit cards or bank accounts for business purchases. Over time, this creates confusion and makes it nearly impossible to separate personal and business expenses accurately. 

Why It’s a Problem: 
  • You lose track of which expenses are deductible. 
  • Your business performance looks unclear. 
  • You increase your audit risk with the CRA or IRS. 
How Remote Books Helps: 

At Remote Books, we set up your books correctly from day one — with a dedicated business account, clear chart of accounts, and automated bank feeds. That way, every transaction is properly tracked and categorized. 

Our cloud-based system keeps your finances clean and ready for tax season — no more hunting through personal statements. 

2. Falling Behind on Bookkeeping 

If you’re only updating your books at tax time, you’re not seeing the real picture of your business. Falling behind means you’ll forget transactions, misplace receipts, and stress over tax deadlines. 

Why It’s a Problem: 
  • You can’t make data-driven business decisions. 
  • Missed entries lead to inaccurate reports. 
  • It’s harder (and more expensive) to fix errors later. 
How Remote Books Helps: 

Our monthly bookkeeping service ensures your books are always current. 

 We automatically pull in your transactions, reconcile your accounts, and deliver easy-to-read reports — so you know your financial health at a glance. 

We also send monthly performance summaries, helping you make smarter business decisions all year, not just at tax time. 

3. Not Keeping Receipts or Proper Documentation 

The CRA and IRS both require supporting documents for your expenses — often for up to six years. Missing receipts can mean lost deductions or failed audits. 

Why It’s a Problem: 
  • You might lose legitimate business deductions. 
  • It makes audits stressful and time-consuming. 
  • You can’t trace your expenses properly. 
How Remote Books Helps: 

We use cloud document management, meaning you can simply snap a photo of a receipt or forward an email invoice — and it’s automatically saved and matched to your transaction. 

No shoeboxes, no paperwork, no stress. 

 Your digital receipts stay organized, secure, and easily retrievable when tax time comes. 

Source: CRA – Keeping Records 

4. Misclassifying Expenses and Income 

Misclassification can distort your reports and even increase your taxes. For example, labeling software subscriptions as “office supplies” may throw off your financial ratios — and make it harder to claim deductions correctly. 

Why It’s a Problem: 
  • Inaccurate profit and loss statements. 
  • Missed deductions or tax misreporting. 
  • Confusing data that hinders growth planning. 
How Remote Books Helps: 

We don’t just enter transactions — we analyze them. 

 Our trained bookkeepers ensure every dollar is properly categorized and aligned with tax rules in Canada and the U.S. 

Plus, our cloud software lets you view categorized reports in real time, so you always know where your money is going. 

5. Waiting Too Long to Get Professional Help 

Many business owners start with DIY bookkeeping, thinking they’ll save money — but it usually leads to expensive cleanup later. 

 When things pile up, catching up becomes overwhelming, and that’s where Remote Books steps in. 

Why It’s a Problem: 
  • DIY bookkeeping consumes your valuable time. 
  • Small errors compound over months or years. 
  • Late filings can result in CRA/IRS penalties. 
How Remote Books Helps: 

We specialize in bookkeeping catch-up and cleanup — even if you’re behind by months (or years). Our team will bring your books up to date, reconcile accounts, and organize everything for your accountant. 

After cleanup, we can maintain your books remotely and automatically, so you’ll never fall behind again. 

Final Thoughts: Don’t Let Bookkeeping Hold You Back 

Bookkeeping mistakes are common — but they don’t have to be. 

 When you partner with Remote Books, you get: 

  • Accurate, up-to-date records 
  • Stress-free tax preparation 
  • Real-time insights into your business performance 
  • More time to focus on growth 

Whether you need monthly bookkeeping, back-bookkeeping cleanup, or full-service tax support, Remote Books gives small businesses across Canada and the U.S. the confidence that their finances are accurate, compliant, and ready for growth. 

Ready to clean up your books? 

 Book a free consultation today and see how Remote Books can make your bookkeeping simple, efficient, and fully remote. 

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