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Expense Management and Why it Matters for Small Businesses

Tracking your expenses is an important part of your responsibilities as a business owner. Not only will expense management keep you in good standing with the government, but it will also help you maintain a financially healthy business.

Here are four reasons why owners should prioritize expense management as an essential business activity.

1

Keep up good relations with the CRA

Remitting and paying taxes to the Canada Revenue Agency is essential to running a business. When you work for yourself, it’s your responsibility to record your expenses and report them correctly.

Being compliant with the CRA is crucial. Some lenders may require proof that your accounts are in good standing before granting a loan, and it may be necessary to qualify for certain grants or incentives. When your expense management is accurate and up to date, it’s easier to maintain compliance.

2

Qualify for tax benefits

Proper expense tracking allows you to apply for HST and other tax rebates, potentially saving your business money. It also makes it easy to spot and deduct eligible expenses from your business income, which can then potentially reduce your taxes

3

Be prepared for a potential audit

Most business owners will admit that getting audited is one of the most dreaded experiences in their professional lives. However, good record-keeping can help you be ready if you do get audited.

4

Have a clear picture of your business finances

As a business owner, knowing how your company is performing is important for many reasons. When you have a clear picture of your finances, you can make informed decisions about your business’ future, identify any issues before they become problems, determine how to allocate resources, and set yourself up in a good position should you seek financing or investor support.

A business credit card can be an important component to your expense management strategy. Providing the ability to separate business and personal expenses, monitor your business spending and access comprehensive reporting, a business credit card can make it easier to run your business efficiently.

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