Bookkeeping — Frequently Asked Questions

As of 2026, most small businesses should reconcile and update books at least monthly so financials stay accurate for decisions, GST/PST filing, and cash-flow tracking. Waiting until year-end causes errors and stress. RN Canada keeps client books current monthly with cloud bookkeeping and timely reconciliations.

As of 2026, bank reconciliation matches your books to your bank statement, catching missing transactions, duplicates, and fraud, and ensuring your financials are trustworthy for tax and decisions. Unreconciled books mislead. RN Canada reconciles client accounts every period as a core part of its bookkeeping service.

As of 2026, expenses should be coded to a consistent chart of accounts that matches CRA categories, separating capital assets, deductible operating costs, and personal items. Wrong categories distort tax and reports. RN Canada designs your chart of accounts and categorizes transactions accurately for clean tax filing.

As of 2026, cloud bookkeeping (QuickBooks Online, Xero) gives real-time financials, bank feeds, automatic GST/PST tracking, and remote access for your accountant — a major upgrade over spreadsheets. RN Canada sets up and manages cloud bookkeeping so clients see current numbers and stay audit-ready.

As of 2026, keep receipts and supporting documents for every business expense you claim — invoices, bank and credit card records, mileage logs, and payroll records — generally for six years. Bank statements alone aren't enough. RN Canada implements digital receipt capture so clients retain CRA-compliant documentation effortlessly.

As of 2026, open a dedicated business bank account and credit card, pay yourself deliberately rather than dipping into business funds, and never run personal expenses through the company. Mixing them creates tax and liability problems. RN Canada sets up clean separation and tracks owner draws and shareholder loans correctly.

As of 2026, a chart of accounts is the organized list of categories — assets, liabilities, equity, revenue, expenses — used to record every transaction, forming the backbone of your financial statements. A messy chart yields messy reports. RN Canada builds a tailored chart of accounts so reporting and tax filing run smoothly.

As of 2026, small-business bookkeeping is typically priced monthly based on transaction volume and accounts, far cheaper than a full-time hire once payroll taxes are considered. Fixed-fee packages are common. RN Canada offers transparent monthly bookkeeping plans with CPA oversight — contact the Edmonton or Vancouver office for a quote.

As of 2026, accounts payable is money your business owes suppliers, while accounts receivable is money customers owe you. Managing both well protects cash flow — paying on time without paying early, and collecting promptly. RN Canada tracks AP and AR in your books and reports on cash-flow timing.

As of 2026, in BC you must track GST and PST as separate liabilities because they are filed separately to different authorities; in Alberta only GST applies. Mixing them up causes filing errors. RN Canada configures cloud software with correct tax codes so GST and PST reconcile cleanly each period.

As of 2026, double-entry bookkeeping records every transaction as equal debits and credits across two accounts, keeping the accounting equation balanced and catching errors. It's the standard for reliable financials. RN Canada maintains proper double-entry books so client financial statements and tax filings are accurate.

As of 2026, a bookkeeping cleanup involves reconciling all accounts, correcting miscategorized transactions, matching GST/PST, and reconstructing missing records before filing taxes. It restores trustworthy financials. RN Canada offers catch-up and cleanup bookkeeping to bring backlogged businesses current and audit-ready.

As of 2026, you can DIY simple bookkeeping with cloud software, but as transactions, payroll, and GST/PST grow, errors get expensive and time-consuming. Many owners hand it off to focus on the business. RN Canada takes over bookkeeping with CPA oversight so owners get accurate books without the time drain.

As of 2026, review your profit and loss statement, balance sheet, cash-flow summary, and aged AR/AP each month to spot trends, manage cash, and catch problems early. Numbers reviewed monthly drive better decisions. RN Canada delivers monthly management reports and explains them in plain language for owners.

As of 2026, money an owner puts in or takes out of a corporation is recorded through the shareholder-loan or equity accounts, not as revenue or expense, and must be tracked to avoid tax problems. Sloppy recording triggers CRA issues. RN Canada records owner draws and contributions correctly in your books.

As of 2026, in double-entry bookkeeping a debit increases assets and expenses while a credit increases liabilities, equity, and revenue; every entry balances debits and credits. Misunderstanding them causes errors. RN Canada handles the mechanics so clients see clean, correct financials without learning the bookkeeping rules.

As of 2026, keep a logbook of business kilometres and total kilometres so you can claim the business-use portion of vehicle costs, or use the per-kilometre allowance method. The CRA disallows undocumented claims. RN Canada sets up mileage tracking and records the deductible vehicle portion accurately.

As of 2026, cash-basis records income and expenses when money moves, while accrual records them when earned or incurred; incorporated businesses generally must use accrual for tax. Accrual gives a truer performance picture. RN Canada keeps accrual books and reconciles cash flow separately so owners see both views.

As of 2026, reconcile all bank and credit accounts, match GST/PST, finalize payroll, clear suspense accounts, and gather receipts before handing books to your accountant — clean books mean lower fees and fewer errors. RN Canada keeps books year-end-ready continuously, so there's no scramble before filing.

A bookkeeper records transactions — sales, expenses, payroll entries and bank reconciliations. A controller owns the accuracy of those records, runs the month-end close, produces financial statements and manages compliance, and often supervises a bookkeeper rather than replacing one. RN Canada's bookkeeper versus controller comparison sets out where the line sits, including full-charge bookkeepers.

A controller verifies that the financial statements are accurate and compliant — the close, the reconciliations, the internal controls. A CFO uses those verified numbers to make forward-looking decisions such as forecasting, pricing and capital raising. RN Canada's controller versus CFO comparison covers the exact handoff point and when to add a CFO.

Common triggers include transaction volume that outpaces one bookkeeper reliably reviewing their own work, a lender or investor asking for reviewed financial statements, a month-end close that routinely slips past two or three weeks, and headcount growth adding payroll and reporting complexity. Any one trigger is reasonable grounds; two or more together make the case clear. RN Canada's guide on when to hire a controller sets out these signs in full.

A review engagement gives limited assurance: the practitioner performs analytical procedures and inquiry to conclude nothing has come to their attention suggesting the statements are materially misstated. An audit gives reasonable assurance through more extensive testing, including verifying transactions and balances directly, and it costs and takes longer than a review. Lenders and investors specify which level of assurance they require, so the choice is usually made for the business rather than by it.

Construction bookkeeping tracks cost and revenue by contract rather than by month. Every labour hour, material invoice and subcontractor cost is coded to a specific job, a work-in-progress (WIP) schedule measures how much of each contract is earned but not yet billed, and holdbacks tie up part of every payment until the project reaches substantial completion. RN Canada's construction bookkeeping guide walks through the month-end routine, and the construction accounting guide covers the underlying WIP and holdback mechanics.

No. Prepared meals sold for immediate consumption — dine-in, takeout, most delivery — are generally taxable, while most basic groceries are zero-rated when sold unprepared. A restaurant's point-of-sale system needs tax codes set up per item category rather than one blanket rate, and its bookkeeping needs a daily reconciliation between the POS report, the payment processor statement and the bank deposit to catch discrepancies early. RN Canada's restaurant tax guide and restaurant bookkeeping guide cover the full mechanics.

Carriers crossing provincial or state lines generally report fuel tax through the International Fuel Tax Agreement (IFTA), which allocates tax owed based on the distance actually driven and the fuel actually purchased in each member jurisdiction — not a single blended total for the trip. That means distance and fuel purchases have to be logged jurisdiction by jurisdiction, trip by trip, not just as an overall odometer difference. Incomplete per-jurisdiction records are one of the most common findings in an IFTA audit. RN Canada's trucking accounting guide covers this alongside owner-operator classification and load-level costing.

A review engagement gives limited assurance: the practitioner relies mainly on inquiry of management and analytical procedures and concludes only that nothing came to their attention suggesting the statements are materially misstated. An audit gives reasonable assurance — the higher standard — through extensive testing of transactions, balances and external confirmations, resulting in a positive opinion that the statements are fairly presented. Which tier a business needs is usually set by a lender, shareholder agreement or investor rather than chosen freely, since a review costs and takes meaningfully less than a full audit.

Notice to Reader is the traditional name for what is now formally the CSRS 4200 compilation engagement: the practitioner organizes the financial information management supplies into statement form without testing, verifying, or expressing any assurance on it. The engagement report states plainly that no assurance is given, which makes it the lightest-touch tier on the assurance ladder, below both a review engagement and an audit. Some lenders accept a Notice to Reader for smaller facilities; others require at least a review, so what a specific stakeholder needs should be confirmed before choosing the tier.

A bookkeeper records transactions — sales, expenses, payroll entries, bank reconciliations — and even a full-charge bookkeeper who handles the entire cycle alone is still doing that recording work without independent review. A controller adds the layer a bookkeeper structurally cannot provide: verifying the books, running the close, producing financial statements, and making judgment calls like accruals and revenue recognition. Most small businesses add a controller above the bookkeeper rather than replacing one, often on a part-time or outsourced basis.

Common triggers are transaction volume that outpaces reliable single-person review, a lender or investor asking for reviewed financial statements, a month-end close that routinely slips past two or three weeks, and headcount growth that adds payroll and reporting complexity a bookkeeper isn't mandated to own. Any single trigger is a reasonable reason to look at a controller; two or more together make the case clear. Most businesses at this stage use a part-time or outsourced controller rather than a full-time hire.

Percentage-of-completion is most commonly measured cost-to-cost: percentage complete equals costs incurred to date divided by total estimated contract cost, and revenue recognized to date is that percentage applied to the total contract value. It lets a contractor recognize revenue as work is performed rather than waiting until the project is finished, which better matches revenue to the work actually done on a multi-month contract. Very short contracts, or ones where reliable progress estimates aren't available, may instead use completed-contract accounting, which defers all revenue until substantial completion.