5 Bookkeeping Basics Every Entrepreneur Needs to Have in Place

Let’s be honest: bookkeeping doesn’t exactly top the list of fun business tasks. But if you're trying to build something sustainable (and profitable), you can't afford to wing it when it comes to your finances.

Whether you're a few months into running your business or finally ready to get serious about the numbers, here are five simple but critical things every entrepreneur needs to have in place.

1. Separate Your Business and Personal Finances

If you're still using your personal bank account for business expenses, this is your cue to stop.

Open a separate business account—even if you're a sole proprietor. Not only does this make bookkeeping way easier, but it also helps you clearly track what's actually coming in and going out of your business. Plus, if the CRA ever comes knocking, you want clean records that are easy to explain.

Pro tip: If you're a sole prop, you don't need to open a formal "business bank account." You can simply open a separate chequing account under your personal name and designate it for business use. Same goes for credit cards—just choose one and use it exclusively for business expenses. The goal is to keep things clean and easy to track.

2. Track Every Dollar In and Out

This one sounds basic, but it’s where so many entrepreneurs slip up. Whether you’re using a spreadsheet or a software tool, you need a system to track your income and expenses consistently.

Don't rely on memory. Don't let receipts pile up in your inbox. Carve out time weekly or biweekly to review and record your transactions. Consistency is what makes this manageable.

3. Stay on Top of Sales Tax (GST/HST)

In Canada, once you hit $30,000 in revenue, you’re required to register for a GST/HST account. Even if you haven’t crossed that threshold yet, it’s worth understanding your province’s rules.

Make sure you:

- Know when you're required to register

- Charge the right rate for your province

- Set aside sales tax collected (don’t spend it!)

A lot of business owners get into trouble here because they treat sales tax like extra income. It’s not. It’s the government’s money—you’re just holding it temporarily.

4. Categorize Your Expenses Properly

This is where messy records can start to cost you money. If you're not labeling your expenses correctly, you might miss out on deductions or misreport your income.

Create a simple, consistent set of categories that make sense for your business (ex: software, advertising, travel, office supplies, subcontractors). Then use those same categories every time you enter expenses.

If you ever want to apply for a grant, loan, or just understand where your money is going—you'll be thankful you did this step right.

Consistency is the secret sauce to strong bookkeeping. Without it, even the best systems fall apart.

5. Reconcile Your Transactions Regularly

Reconciliation is just a fancy word for comparing your bookkeeping records to your bank and credit card statements to make sure everything matches.

Doing this monthly helps you catch errors early, spot duplicate charges, and confirm you didn’t miss any transactions. It also builds confidence in your numbers, which matters when you're making decisions based on them.

One Last Thing...

You don’t need to use fancy software, but you do need a system. The goal isn’t perfection—it’s consistency. Get the basics down, review your numbers often, and know when it’s time to call in help. Try out my DIY Bookkeeping Spreadsheet system if you're looking for something simple to help you keep track of your business finances.

And if this feels overwhelming? You’re not alone. Bookkeeping isn’t the reason you started your business, but getting it right is what helps you keep your business.

Start here. Get your foundation solid. You can always build from there.