Some people love the fact that they can automate their administrative duties a great deal, while others are from the old school and like to see this type of data in a hard copy on paper.
The general trend is to become paperless as much as possible, and even the CRA is promoting this by encouraging electronic filing.
While this is convenient at least once you get used to it, it doesn’t mean that you can automatically assume that your filing has been done correctly. Nor does it replace the expertise of your accountant.
The information you enter into any electronic data collection software is only as accurate as to what is being entered. You still need to ensure that your financials have been comprised properly, which is the information you need to complete your taxes. Fortunately a good quality accountant will do your electronic filing for you.
Now this covers the electronic methods of filing your tax returns, but it doesn’t stop there. Now there are many different types of software available that allows you to compile your accounting records in a much quicker manner. Good quality ones will greatly help you to reduce your accounting errors, but not totally. You have to know where to put the information you are entering, and have a least a basic understanding of accounting methods. If not, then you are going to have to designate some time for the learning process.
Many of the various types of bookkeeping software are of such that you can enter all your bookkeeping entries, and then it will automatically produce your financial statements and even allow you to send these completed records to your accountant so he can continue with the filing of your returns.
Ideally if you are thinking of automating your bookkeeping then it would be wise to ask the advice of your accountant as to which would be the best electronic system for you to use. If you work with one that your accountant is familiar with it can help at the end of the year when it comes time to complete your financials, both for you and your professional.
Most accounting programs do come with backup capabilities, but you should also make sure you at least keep a copy of the monthly financials, and file these away safely. Some people like to keep an extra backup of their accounting records on a separate disc or usb, in the event something disastrous happens to their computer, or it gets stolen.
Keeping concise and organized financial records can be a real money saver in many ways. It can be time consuming and electronic software can be a great business resource but it too has to be utilized properly.
