When you’re running a business, bookkeeping can feel like one more thing on a never-ending to-do list. But here’s the truth: it’s not the big obvious mistakes that sink most small businesses — it’s the little hidden ones that creep in when you’re busy juggling everything else.

At Castle Accounting, we see these same traps again and again — so here’s your cheat sheet to catch them before they become expensive problems.

✅ 1. Mixing Personal and Business Expenses

This one tops the list every year. You’re out grabbing coffee and pick up office supplies — or you’re at Costco buying groceries and add in printer paper and sticky notes. It happens fast.

Why it matters: Mixing personal and business spending makes your bookkeeping messy and makes it harder to prove expenses to the CRA if you’re ever audited. Worse — you could lose deductions you’re entitled to.

How to fix it:

• Use a dedicated business bank account and credit card — always.
• If you must pay for something personal with your business card (or vice versa), make a note right away and record it properly.
• Talk to your bookkeeper about owner’s draws vs. reimbursements — they’re not the same!

✅ 2. Forgetting the GST Cutoff

In Canada, once your business hits $30,000 in gross sales in a 12-month period (not just the calendar year!), you must register for GST/HST. Many new owners don’t realize this — or wait too long.

Why it matters: If you pass the limit without registering, the CRA can backdate your GST registration and demand you remit GST you didn’t charge — coming straight out of your pocket.

How to fix it:

• Track your sales carefully each month — not just at tax time.
• Register early if you’re getting close — sometimes it makes sense to register voluntarily.
• If you already passed the limit, get advice fast — the sooner you act, the better.

✅ 3. Not Tracking Owner Draws Properly

Paying yourself? Great — but it’s easy to mix up draws, wages, dividends, and expenses. Many owners just transfer money whenever they need it, with no record of whether it’s salary, repayment, or an owner draw.

Why it matters: Mixing up how you pay yourself can lead to tax headaches, inaccurate income reporting, and sometimes penalties if you claim expenses or payroll deductions incorrectly.

How to fix it:

• Work with your bookkeeper to set clear categories: wages, draws, dividends.
• Use regular, planned transfers instead of random withdrawals.
• Keep good notes — your future self (and your tax return) will thank you.

✅ 4. Letting Little Fees Leak Cash

Those $9.99 subscriptions, auto-renewing software trials, and forgotten tools add up. Many businesses lose thousands each year to charges they don’t even use.

Why it matters: It’s real money you could reinvest — and tracking these small amounts makes your expense claims more accurate.

How to fix it:

• Review your credit card and bank statements every month for stray charges.
• Make a list of all your software, tools, and subscriptions — cancel what you don’t need.
• Automate your bookkeeping to catch small recurring payments.

✅ 5. Not Backing Up Your Books

It’s 2025 — and yes, businesses still lose data all the time. A stolen laptop, a lost password, or a hard drive crash can wipe out months of records overnight.

Why it matters: CRA requires you to keep your books for at least six years — no backups means no proof.

How to fix it:

• Use cloud-based accounting software with secure backups.
• Back up copies to an external drive or secure cloud folder monthly.
• Store logins safely and share access with your bookkeeper.

✨ Small Fixes, Big Savings

These mistakes are small — but fixing them now can save you a massive headache (and big dollars) down the road.

At Castle Accounting, we help Alberta business owners stay organized, tax-ready, and worry-free — so you can focus on growing, not scrambling at tax time.

📌 Want help spotting hidden leaks in your books? Let’s talk — we’re here to help you tidy up, get confident, and sleep easy at night.

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