Top Accounting Mistakes Calgary Small Businesses Make (and How to Avoid Them)
                     TOP ACCOUNTING
MISTAKES
CALGARY SMALL
BUSINESSES MAKE
(and How to Avoid Them)
Running a small business in Calgary is 
exciting, but managing the finances 
can be tricky. Good 
accounting practices are essential for 
growth, compliance, and keeping stress 
levels low. Unfortunately, many small 
businesses make common accounting 
mistakes that can lead to financial 
mismanagement, missed tax 
deductions, or even penalties from the 
CRA. Understanding these pitfalls is the 
first step to avoiding them.
MIXING PERSONAL AND 
BUSINESS FINANCES
Blurring the lines between personal and 
business finances is a recipe for confusion. It 
complicates bookkeeping and can make tax 
filing a nightmare. Without clear separation, 
it’s hard to track expenses accurately or 
demonstrate financial health to potential 
investors. The fix? Open a dedicated business 
bank account and credit card. This simple 
step makes it easier to manage your finances 
and stay organized come tax time.
NEGLECTING REGULAR
BOOKKEEPING
Falling behind on bookkeeping is 
one of the quickest ways to create 
financial chaos. When records 
aren’t up-to-date, it’s easy to miss 
deductions, overpay on taxes, or 
lose sight of cash flow. The solution 
is consistency. Set a regular 
schedule to review your finances or 
hire a bookkeeper to stay on top of 
things. Regular updates keep your 
business financially healthy and 
stress-free.
MISCLASSIFYING EMPLOYEES
AND CONTRACTORS
Misclassifying workers as employees or contractors can result in serious trouble with the CRA. If you 
treat an employee as a contractor, you could face penalties for unpaid taxes and benefits. To avoid 
this, understand the legal definitions and requirements for each role. When in doubt, consult with an 
accountant to ensure you’re compliant and protecting both your business and your workers.
FAILING TO TRACK SMALL EXPENSES
Small expenses might seem 
insignificant, but they add up quickly. 
Overlooking these can cost you valuable 
deductions at tax time. To keep track, 
use expense management apps and 
make it a habit to snap photos of 
receipts as soon as you get them. Even 
minor costs like office supplies or coffee 
with a client can reduce your taxable 
income.
NOT RECONCILING BANK STATEMENTS
Skipping bank reconciliations is like 
flying blind with you  finances. Without 
regularly matching your bank 
statements to your accounting 
records, errors, discrepancies, or even 
fraud can go unnoticed. The best 
practice is to reconcile accounts 
monthly and review for 
inconsistencies. It’s a simple step that 
ensures your books are accurate and 
trustworthy.
IGNORING TAX DEADLINES
AND OBLIGATIONS
Missing tax deadlines can lead to costly penalties and interest charges. Whether it’s income 
tax, GST/HST filings, or payroll remittances, staying on top of your obligations is crucial. Use 
accounting software to set reminders or hire a tax advisor to manage deadlines. Staying 
organized means you won’t be caught off guard when tax season rolls around.
POOR CASH FLOW MANAGEMENT
Cash flow is the lifeblood of any 
small business. Poor management 
can lead to financial instability, 
even if your business is profitable 
on paper. To avoid running into 
cash crunches, create detailed 
cash flow forecasts and monitor 
your finances regularly. This 
proactive approach helps you plan 
for slow periods and unexpected 
expenses.
OVERLOOKING SALES TAX
REQUIREMENTS (GST/HST)
Many small businesses in Calgary 
make mistakes with GST/HST, whether 
it’s filing late, charging the wrong rate, 
or failing to register when required. 
Understanding when and how to 
charge sales tax is essential to stay 
compliant. Familiarize yourself with 
CRA thresholds and filing schedules, 
and don’t hesitate to seek advice if 
you’re unsure.
NOT SEEKING PROFESSIONAL
HELP WHEN NEEDED
DIY accounting might seem like a 
cost-saving strategy, but it often 
leads to more problems than it 
solves. Small business finances can 
get complex quickly, and mistakes 
can be expensive. Investing in a 
professional accountant or advisor 
ensures your finances are handled 
correctly, freeing up your time to 
focus on growing your business.
Avoiding these common accounting 
mistakes can save Calgary small 
businesses time, money, and stress. 
Good financial practices aren’t just 
about staying compliant—they’re key 
to building a successful, sustainable 
business. Whether it’s separating 
finances, tracking expenses, or hiring 
a professional, 
investing in proper accounting is an 
investment in your business’s future.
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