Balancing Books: Essential Financial Reports for Canadian Small Businesses

In the dynamic landscape of Canadian small businesses, effective financial management is a key driver of success. One of the fundamental aspects of financial management is the generation and analysis of essential financial reports. Let’s explore the crucial financial reports that Canadian small businesses should prioritize to ensure their financial health and compliance with Canadian regulations. We can help you understand all of your reports.

Dashboard reports on laptop
Photo by Myriam Jessier on Unsplash

1. Income Statement (Profit and Loss Statement)

The Income Statement, also known as the Profit and Loss Statement (P&L), provides a snapshot of your business’s revenues, costs, and expenses during a specific period. This report helps you assess your business’s profitability. It includes:

  • Revenues: Total sales or income from your products or services.
  • Cost of Goods Sold (COGS): The direct costs associated with producing your goods or services.
  • Gross Profit: Revenues minus COGS, showing your basic profitability.
  • Operating Expenses: All other expenses, such as rent, utilities, and salaries.
  • Net Profit (or Loss): Gross profit minus operating expenses, revealing your overall profit or loss.

Reference: Income Statement – Investopedia

2. Balance Sheet

The Balance Sheet provides a snapshot of your business’s financial position at a specific point in time. It consists of:

  • Assets: What your business owns, such as cash, inventory, equipment, and accounts receivable.
  • Liabilities: What your business owes, such as loans, accounts payable, and accrued expenses.
  • Owner’s Equity: The residual interest in the assets of the entity after deducting liabilities.

The balance sheet helps you understand your business’s overall financial health and its ability to meet its financial obligations.

Reference: Understanding the Balance Sheet – Investopedia

3. Cash Flow Statement

The Cash Flow Statement tracks the flow of cash in and out of your business during a specific period. It is divided into three sections:

  • Operating Activities: Cash flows from your core business operations.
  • Investing Activities: Cash flows from buying or selling assets.
  • Financing Activities: Cash flows related to borrowing, repaying loans, or obtaining investments.

A well-managed cash flow is essential to ensure your business can meet its day-to-day expenses.


4. Accounts Receivable Aging Report

This report helps you track outstanding invoices and the aging of accounts receivable. It provides insights into which customers owe you money and how long they’ve owed it. Monitoring this report is crucial for maintaining healthy cash flow.

Reference: Accounts Receivable Aging Report – FreshBooks

5. Budget vs. Actual Report

This report compares your budgeted financial goals to your actual financial performance. It helps you identify where you are exceeding or falling short of your financial targets, enabling you to make informed decisions.

In conclusion, staying on top of these essential financial reports is paramount for Canadian small businesses. They provide the insights and data necessary to make informed financial decisions, maintain compliance with Canadian regulations, and ensure the long-term financial health of your business. Consider using accounting software or consulting with a professional Canadian bookkeeper to streamline the reporting process and make the most of these financial tools.

As a Certified Canadian bookkeeper we can help you generate and understand what your reports are telling you. Contact us today


Hiring a Canadian Bookkeeper vs. DIY Accounting: Pros and Cons

In the world of small business ownership in Canada, managing your finances efficiently is crucial to long-term success. When it comes to financial management, one of the key decisions you’ll face is whether to hire a professional Canadian bookkeeper or handle accounting tasks yourself through DIY (Do-It-Yourself) methods. What are the pros and cons of each approach?

Hiring a Canadian Bookkeeper


  1. Expertise and Experience: One of the most significant advantages of hiring a Canadian bookkeeper is tapping into their expertise. They are trained professionals with in-depth knowledge of Canadian tax laws, accounting principles, and financial regulations. This expertise can save you from costly mistakes. Consider a Certified Professional bookkeeper to ensure they are qualified.
  2. Time Savings: Managing your books can be time-consuming. Hiring a bookkeeper allows you to focus on running your business, leaving the financial details to someone who specializes in that area. Think of how long it would take you to wire a house – an electrician can do it faster because of experience.
  3. Accuracy and Compliance: A professional bookkeeper ensures that your financial records are accurate and compliant with Canadian tax laws. This can help you avoid penalties and legal issues down the road.
  4. Financial Insights: Bookkeepers provide valuable insights into your business’s financial health. They can offer advice on cost-cutting, budgeting, and financial planning to help your business grow.
  5. Scalability: As your business grows, your financial needs become more complex. A bookkeeper can adapt to your changing requirements and provide tailored solutions.


  1. Cost: Hiring a bookkeeper is an expense. However, many small businesses find that the benefits outweigh the cost, especially considering the time and potential errors saved. Remember that the cost is tax deductible – it is a business expense.
  2. Dependency: You rely on an external professional to manage your finances. If they’re unavailable or make errors, it can impact your business.
Working on laptop with many electronics in foreground
Photo by Lukas Blazek on Unsplash

DIY Accounting


  1. Cost Savings: DIY accounting is typically more budget-friendly, especially for startups and very small businesses.
  2. Control: You have complete control over your financial records and can access them whenever you want.
  3. Learning Opportunity: Managing your finances can provide a valuable learning experience. It can help you understand your business’s financial intricacies better.


  1. Time-Consuming: DIY accounting can be extremely time-consuming, taking you away from other crucial aspects of your business.
  2. Lack of Expertise: Unless you’re a trained accountant, you may lack the expertise to handle complex financial matters, leading to potential errors and missed opportunities.
  3. Compliance Risks: Canada’s tax laws are intricate and ever-changing. Mistakes in compliance can result in penalties and legal issues.
  4. Limited Growth Potential: As your business expands, DIY accounting may become overwhelming and less effective.

In conclusion, the decision to hire a Canadian bookkeeper or handle accounting yourself depends on your business’s specific needs, your financial acumen, and your available resources. While DIY accounting may seem cost-effective initially, it can lead to significant challenges in the long run. Hiring a professional bookkeeper, on the other hand, provides expertise, accuracy, and peace of mind, allowing you to focus on growing your business.

Consider your business’s size, complexity, and your own financial proficiency when making this critical decision. In many cases, the investment in a skilled Canadian bookkeeper pays off in terms of financial stability and business growth.


Streamlining Funeral Home Bookkeeping: The Advantages of Outsourcing Bookkeeping

There is a significant benefit of outsourcing bookkeeping for funeral homes. How engaging external bookkeepers can streamline operations, ensure accuracy, and provide valuable financial insights, ultimately enabling funeral home owners to focus on delivering compassionate services to grieving families.

time or money?
  1. Outsourcing bookkeeping to specialized professionals allows funeral home owners to benefit from their expertise in funeral home accounting and industry-specific transactions. By entrusting accurate and compliant financial records to external bookkeepers, funeral home owners can rest assured that complex financial transactions, tax requirements, and trust fund management are handled with precision. This expertise minimizes the risk of errors, providing peace of mind allowing you to focus on your business.
  2. Outsourcing bookkeeping frees up time and resources for funeral home owners and staff to focus on serving grieving families compassionately. External bookkeepers employ efficient processes, advanced software, and automation tools to streamline financial operations such as accounts payable and receivable, payroll management, bank reconciliations, and financial reporting. Funeral home personnel can devote their energy to essential operational aspects, ensuring exceptional client care.
  3. By outsourcing bookkeeping, funeral homes eliminate the need for additional in-house staff, reducing payroll expenses and benefits. Engaging professional bookkeeping services provides cost savings without compromising accuracy or compliance. Furthermore, external bookkeepers offer scalability, accommodating the growth or seasonal fluctuations of funeral home businesses. Funeral homes can access flexible and affordable bookkeeping services, tailored to their specific needs.
  4. External bookkeepers provide objective financial analysis, generating accurate and timely reports that offer valuable insights into the funeral home’s financial health and performance. Armed with this information, funeral home owners can make informed decisions regarding pricing, cost management, and growth strategies.

Outsourcing bookkeeping for funeral homes streamlines operations, ensures accuracy, and provides invaluable financial insights. By partnering with external bookkeepers, funeral home owners can focus on delivering compassionate services to grieving families, confident in the accuracy, compliance, and efficiency of their financial records. Optimize your funeral home’s operations by leveraging the benefits of outsourced bookkeeping with Onyxfire Online – we have experience in funeral home bookkeeping.


Why Sole Proprietors need bookkeepers

As a sole proprietor, managing your business finances can be overwhelming. Hiring a bookkeeper can provide numerous benefits to help you stay on top of your financials and grow your business.

check book calculator and pen against a white background
  1. Time-saving: With a bookkeeper taking care of financial tasks like recording transactions and preparing financial statements, you can focus on your core business activities, saving time and effort.
  2. Financial expertise: Bookkeepers are trained professionals who possess in-depth knowledge of managing financial records, ensuring accurate tracking of income and expenses, compliance with tax laws, and providing financial insights and recommendations.
  3. Proper record-keeping: A bookkeeper ensures organized and accurate financial records, facilitating smooth tax filing processes and helping you stay on top of your financial situation.
  4. Tax compliance: A bookkeeper helps you stay compliant with tax laws, maximizing deductions and minimizing the risk of costly errors or penalties.
  5. Financial analysis: Bookkeepers generate financial reports that provide insights into your business performance, helping you track and improve your financial health.
  6. Professional representation: A bookkeeper enhances your business credibility by providing a professional representation to stakeholders such as clients, suppliers, and financial institutions.
  7. Peace of mind: Knowing that your business finances are accurately managed by a qualified bookkeeper provides peace of mind, allowing you to focus on your business without worrying about financial record-keeping or tax compliance.
  8. Cost-effective: Hiring a bookkeeper can be cost-effective in the long run by optimizing tax deductions, avoiding costly errors, and providing financial insights for informed decision-making.
  9. Future planning: A bookkeeper assists in financial forecasting, budgeting, and developing strategies for achieving financial goals.
  10. Professional guidance: Bookkeepers provide valuable guidance on setting up record-keeping systems, choosing accounting software, and implementing effective financial processes and controls.

In conclusion, hiring us provides significant advantages in managing your business finances, ensuring compliance with tax laws, providing financial insights, and freeing up your time to focus on growing your business. It’s essential to consult with a professional bookkeeper to determine your specific needs and make the most of the benefits that a bookkeeper can offer.


Comparing Bookkeeping Software

Comparison of Xero and QuickBooks Online (QBO) for Canadian small businesses the most used online bookkeeping software:

FactorsXero QuickBooks Online (QBO)
PricingStarts at $20 CAD/monthStarts at $25 CAD/month though for most businesses the $72CAD/ month is needed
FeaturesRobust features including invoicing, expense tracking, bank reconciliation, financial reporting, and moreRobust features including invoicing, expense tracking, bank reconciliation, financial reporting, and more
Bank Feeds – will need to be updated no matter which software is chosenSeamless integration for automatic import of bank transactionsSeamless integration for automatic import of bank transactions
Multi-Currency SupportAvailable in entry-level plans – uses a very user friendly experienceAvailable in higher-tier plans – not as user friendly
ReportingWide range of customizable reportsMore robust reporting capabilities with advanced options (with higher monthly plans)
IntegrationsVast ecosystem of third-party integrationsVast ecosystem of third-party integrations
Mobile AppsUser-friendly mobile appComprehensive mobile app
SupportCustomer support through email, chat, and phoneExtensive customer support options including knowledge base, community forum, and live chat
SecurityIndustry-standard security measuresIndustry-standard security measures
User-FriendlinessIntuitive interfaceIntuitive interface
These are the 2 most used online bookkeeping software options in Canada for small business.

We use, train and set up both Xero and QBO. We can help you figure out which is better for you and help get you started.


Understanding GST in Canada: What Business Owners Need to Know

As a business owner in Canada, it’s crucial to understand how the Goods and Services Tax (GST) works and its implications for your business. GST is a tax added to most goods and services sold or consumed in Canada. Here are key things you need to know about GST:

  1. GST Registration: If your business’s annual taxable revenues exceed $30,000, you must register for GST with the Canada Revenue Agency (CRA). Voluntary registration is also possible, even if your revenues are below the threshold. It’s important to understand the registration process and requirements to comply with GST laws. We can help you register for GST as we have seen some companies do the set up incorrectly and it cost them a lot of time and money to get it fixed.
  2. Filing Requirements: Once registered for GST, you must file regular GST returns with the CRA, reporting your taxable sales, eligible input tax credits (ITCs), and any GST owing or refundable. Understanding the filing deadlines, forms, and payment requirements is important to avoid penalties or interest charges for late or incorrect filings.
  3. Input Tax Credits (ITCs): GST allows you to claim ITCs, which are credits for the GST paid on your business expenses. Properly claiming ITCs can reduce your net GST liability and improve your cash flow. However, understanding the eligibility criteria, documentation requirements, and limitations of ITCs is important to comply with CRA regulations.
  4. Exemptions and Zero-Rated Supplies: Not all goods and services are subject to GST. Some supplies, such as basic groceries, prescription drugs, and medical services, are exempt from GST, while others, such as exports, are zero-rated, meaning GST is charged at 0%. Understanding the differences between exempt and zero-rated supplies is important for proper invoicing, reporting, and compliance with GST laws. We explain this to new business owners as Grocieries are E rated and US purchases where GST was not charged is Z rated. If you do not know the difference then we can help.
  5. Place of supply: You need to understand place of supply rules if you serve customers in other provinces or countries. This can lead to large penalties if not understood.
  6. Record Keeping: Keeping accurate records is crucial for GST compliance. You must maintain adequate records of all your business transactions, including sales, expenses, and ITCs, for at least six years. Proper record keeping helps you file accurate GST returns, respond to CRA inquiries, and minimize the risk of penalties or audits.
  7. GST Audits: The CRA conducts GST audits to ensure businesses comply with GST laws. Being prepared for a potential audit and understanding the audit process is important. A professional bookkeeper can help you maintain accurate records, review your GST filings, and ensure compliance with GST regulations, reducing the risk of audit issues.
  8. Voluntary Disclosures: If you discover errors or omissions in your past GST filings, it’s important to rectify them as soon as possible to avoid penalties or interest charges. The CRA offers a voluntary disclosure program that allows you to voluntarily correct errors or omissions and mitigate potential penalties. Understanding the voluntary disclosure program and its requirements can help you rectify any unintentional mistakes and maintain good standing with the CRA.
  9. Penalties and Interest: Non-compliance with GST laws can result in penalties and interest charges, which can impact your business’s finances. Understanding the various penalties and interest charges for late or incorrect filings, failure to register, or other violations is important to avoid financial consequences.
  10. Professional Bookkeeper Assistance: Partnering with a professional bookkeeper who is knowledgeable about GST regulations can help ensure your business complies with Canadian tax laws. A bookkeeper can provide expert guidance on GST registration, filing requirements, input tax credits, exemptions, record keeping, and help you navigate audits or voluntary disclosures.
  11. Peace of Mind: Understanding and complying with GST laws can be complex and time-consuming. Hiring us can provide peace of mind and a second set of eyes to make sure it is completed correctly.


Unlock the Hidden Benefits of Hiring a Professional Bookkeeper for Your Canadian Small Business

As a Canadian small business owner, you’re no stranger to the challenges of managing your finances. But what if I told you there’s a hidden secret to unlocking financial success for your business? Enter the professional bookkeeper – your ultimate financial ally. As a renowned expert in the field, I’m here to reveal the top 10 reasons why hiring a professional bookkeeper can revolutionize your Canadian small business game.

  1. Time is Money: Stop drowning in a sea of financial tasks and let a professional bookkeeper handle the heavy lifting. With their expertise, you can free up precious time to focus on what you do best – running and growing your business.
  2. Accuracy is King: When it comes to your finances, accuracy is non-negotiable. A professional bookkeeper brings meticulous attention to detail, ensuring your financial records are spot-on and compliant with Canadian tax laws. No more sleepless nights over tax penalties or audit nightmares.
  3. Financial Insights Unleashed: Say goodbye to guesswork and hello to meaningful financial insights. A pro bookkeeper wields powerful reporting and analytics tools to provide you with a clear picture of your business’s financial health. Make informed decisions and steer your business towards profitability.
  4. Tax Savings Unlocked: Don’t leave money on the table! A professional bookkeeper knows the ins and outs of Canadian tax laws and can identify every eligible deduction, credit, and exemption. Say hello to optimized tax savings and goodbye to unnecessary tax burdens.
  5. Streamlined Efficiency: Your financial processes can make or break your business’s success. A professional bookkeeper leverages cutting-edge tools, like cloud-based accounting software, to streamline your financial tasks and boost efficiency. Less hassle, fewer errors, and more time for what matters most.
  6. Fortified Data Security: Your business’s financial data is your crown jewel – protect it at all costs. A professional bookkeeper implements robust data security measures, from encryption to firewalls, to safeguard against breaches and fraud. Rest easy knowing your data is in safe hands.
  7. Future-Proof Planning: It’s not just about the present – a professional bookkeeper helps you plan for the future. With their strategic financial guidance, you can create a roadmap for long-term success, from budgeting and cash flow management to financial forecasting. Prepare to thrive, not just survive.
  8. Unparalleled Expertise: A professional bookkeeper is a treasure trove of specialized knowledge and expertise. Stay ahead of the curve with their up-to-date industry insights, best practices, and regulatory know-how. You can trust their guidance to navigate the ever-changing financial landscape.
  9. Burnout Begone: Managing your finances solo can take a toll on your mental and physical health. Don’t let burnout hinder your business’s growth. Delegate your bookkeeping tasks to a pro who can handle them with finesse, so you can stay energized and focused on what you love.
  10. Peace of Mind Reigns: Last but not least, hiring a professional bookkeeper brings you the ultimate peace of mind. With their capable hands managing your financials, you can rest easy knowing your business’s finances are in expert care. Say goodbye to financial stress and hello to tranquility.

In conclusion, the secret to unlocking the full potential of your Canadian small business lies in hiring a professional bookkeeper. From saving time and ensuring accuracy to gaining invaluable insights and optimizing tax savings, a pro bookkeeper can be your financial superhero. So why wait? Level up your business game and partner with us to unleash the hidden benefits of expert financial management. Your business deserves it!


The Power of Business Budgeting: Why Your Canadian Small Business Needs a Budget

As a seasoned financial expert specializing in Canadian small businesses, I want to highlight the key reasons why budgeting is crucial for your business. Let’s explore the top 10 reasons why your small business in Canada needs a budget:

  1. Goal-Oriented Planning: A budget helps you set and achieve financial goals, keeping your business focused on strategic objectives.
  2. Financial Control: A budget empowers you to gain control over your business’s finances by setting spending limits, tracking expenses, and making informed financial decisions.
  3. Cash Flow Management: A budget allows you to forecast cash inflows and outflows, helping you plan ahead and avoid cash flow crunches, optimizing your business’s cash flow.
  4. Financial Visibility: A budget provides real-time financial visibility, enabling data-driven decisions, performance measurement, and proactive financial problem-solving.
  5. Financial Preparedness: A budget acts as a financial safety net, helping you prepare for unexpected expenses, economic uncertainties, and investment opportunities, ensuring business resilience.
  6. Resource Allocation: A budget helps you strategically allocate resources, optimizing time, money, and personnel based on business priorities, streamlining operations, and driving growth.
  7. Stakeholder Communication: A budget serves as a communication tool with investors, lenders, partners, and employees, enhancing transparency and fostering better decision-making.
  8. Tax Planning: A budget aids in planning and allocating funds for tax obligations, optimizing your tax strategy and potentially resulting in tax savings for your business. [Canada Revenue Agency – Installments]
  9. Growth Opportunities: A budget helps you assess the financial feasibility of new initiatives, such as expanding to new markets, launching new products, or investing in technologies. [Source: BDC – Business Development Bank of Canada]
  10. Financial Success: Overall, a budget is a powerful tool that empowers your small business in Canada to achieve financial success, ensuring strategic planning, financial control, cash flow management, and stakeholder communication, while also preparing for uncertainties and capitalizing on growth opportunities.

In conclusion, a well-designed budget is not just about tracking numbers, but it is a strategic tool that empowers your small business in Canada to achieve financial success. From goal-oriented planning to financial visibility, cash flow management to stakeholder communication, and resource allocation to tax planning, a budget plays a critical role in driving your business towards growth and profitability. Don’t overlook the power of budgeting – it’s an investment in your business’s financial future. Partner with a professional bookkeeper to set up and maintain a robust budgeting system that will set your small business in Canada up for success. Contact us today to learn more about how our expert bookkeeping services can help your business thrive.


Gain a Competitive Edge: How Certified Professional Bookkeeping Can Drive Success for Your Small Business

As a small business owner, you’re constantly juggling multiple responsibilities to keep your business running smoothly. Managing your books may seem like just another task on your to-do list, but did you know that bookkeeping can provide your business with a competitive edge? Hiring a certified professional bookkeeper who utilizes advanced bookkeeping tools can unlock a range of benefits that can help your business thrive. Let’s explore why upgrading to advanced bookkeeping services can be a game-changer for your small business.

  1. Accuracy and Efficiency: Get Your Finances in Order

Managing your business finances can be complex, with multiple transactions, invoices, and expenses to track. Advanced bookkeeping tools, such as cloud-based accounting software, receipt scanning, and expense management tools, can streamline these processes and ensure accuracy.

A professional bookkeeper can leverage these tools to automate repetitive tasks, reduce errors, and save you precious time. This means you can focus on growing your business while your bookkeeper takes care of maintaining organized records, reconciling accounts, and generating financial reports. Accurate financial records are crucial for making informed business decisions, filing taxes, and obtaining financing, giving you peace of mind that your financials are in order.

  1. Strategic Insights: Make Informed Business Decisions

Beyond basic financial reports, advanced reporting and analytics tools can provide valuable insights into your business’s financial performance. A certified professional bookkeeper can use these tools to create customized dashboards, charts, and graphs that visually represent your financial data.

These insights can help you understand your business’s financial health, track key performance indicators (KPIs), and identify areas for improvement. With a certified bookkeeper’s expertise, you can gain a deeper understanding of your business’s financials and make informed decisions to drive growth and profitability.

  1. Compliance and Tax Efficiency: Stay on Top of Your Obligations

Complying with tax laws and regulations is essential for any business, but it can be complex and time-consuming. Working with your tax accountant, certified bookkeepers can help ensure that your business remains compliant and tax-efficient.

A certified professional bookkeeper can use these tools to accurately track your income, expenses, and deductions, ensuring that you claim all eligible tax breaks and minimize your tax liability. Your bookkeeper works with your accountant to keep up-to-date with changes in tax laws and regulations, ensuring that your business remains compliant and avoids costly penalties.

  1. Data Security and Protection: Safeguard Your Business Information

Protecting your business’s sensitive financial information is critical in today’s digital world. Advanced bookkeeping tools, such as cybersecurity and data protection software, can help safeguard your business against data breaches and fraud.

A certified professional bookkeeper can implement robust security measures to protect your financial data, such as encryption, password management, and firewall systems. This ensures that your business information remains secure and confidential, giving you peace of mind that your sensitive financial data is protected.

In conclusion, hiring a certified professional bookkeeper like Onyxfire Online who utilizes advanced bookkeeping tools can bring numerous benefits to your small business. From ensuring accuracy and efficiency in managing your finances to providing strategic insights for informed decision-making, and from ensuring compliance and tax efficiency to safeguarding your business information, advanced bookkeeping can help your business gain a competitive edge and drive success. Partnering with a professional bookkeeper who is knowledgeable in these advanced tools can be a wise investment that pays off in the long run for your small business.

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Argh my payroll provider is driving me nuts!!!

What can I do when my payroll provider is driving me nuts?

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At some point in your business, you are going to want to change payroll providers.  It could be because you got big enough to need more payroll services, or you now what to do payroll by location.  Maybe you have a lot of payroll codes.  Maybe you want a faster service or something that talks to your accounting service.  Whatever the reason your bookkeeper can help – but here are things you can think about before jumping to a new provider.

If you want to change payroll providers what should you consider first.

  1. Timing
    1. There are good times and bad times to switch providers.
      1. Switch at calendar year end if at all possible, this will limit T4 issues.
    1. Give yourself enough time – at least a month for setup so that nothing has issues when you run your first payroll.
  2. Options of new providers
    1. There are many providers out there – which one is best for you is based on your business and needs.
    1. Remember sometimes the price of a good payroll software is well worth the cost of fixing issues later.
  3. Things to remember
    1. File your ROE for all employees
      1. There is a ROE code for switching payroll providers – filing now can save hours of headache every time someone leaves for the next year.
    1. Make sure you download all reports and paystubs just incase you need them. If you can get PDF and Excel that might help later if you get a PEIR report.
      1. Employee versions of T4s
      1. T4 summary
      1. Paystubs
      1. PD7A data

Talk to us and we will help you navigate this change.  Having worked with many payroll providers we can help make the transition less painful.