As sole proprietors, we tend to mix business and personal expenses together on the same accounts, bank or credit card. I cannot stress how important it is to keep them separate!

Open a bank account, take out a credit card… and use them specifically for business purchases and transactions. If you want to take money out, pay yourself! Don’t pay your personal bills, go to the grocery store or dentist, and pay through your business account. Use the funds you pay to yourself.

Keep track of your etransfers. All your bookkeeper will see is an etransfer and, if it’s not identified as a business transaction, it only harms you on your tax return. The assumption will be that you took the money and paid yourself. If it’s a legit business expense, it will not get expensed! Nor will you get to capture the HST if you are registered with an HST number.

You also don’t want to be paying your bookkeeper to decipher this. With all those extra transactions, they will need to take time to enter them manually. Of course, you need to keep proper records for financial statements, otherwise, how will you make informed business decisions?