Running a business in Nova Scotia comes with plenty of moving parts, and bookkeeping often falls to the bottom of the to-do list. Unfortunately, poor financial recordkeeping can lead to missed tax deductions, cash flow headaches, and even CRA penalties. Whether you’re a new entrepreneur or a seasoned business owner, avoiding these common mistakes can save you time, money, and stress.

1. Mixing Personal and Business Finances

The mistake: Many small business owners use the same bank account for both personal and business expenses. While it might feel convenient, it creates confusion, missed deductions, and messy records.

How to avoid it:

Open a dedicated business bank account and credit card.

Always separate transactions — even if you’re a sole proprietor.

Record owner draws or contributions properly in your books.

2. Neglecting to Track HST/GST Correctly

The mistake: Nova Scotia businesses often miscalculate or forget to set aside funds for HST (14%). This can lead to a nasty surprise at tax time when the CRA comes calling.

How to avoid it:

Use accounting software that automatically tracks HST on sales and expenses.

Set aside collected HST in a separate account so it’s ready to remit.

Stay on top of CRA filing deadlines — monthly, quarterly, or annually depending on your setup.

3. Poor Recordkeeping of Receipts and Invoices

The mistake: Tossing receipts into a shoebox or forgetting to issue proper invoices makes it difficult to claim expenses and prove income if audited.

How to avoid it:

Digitize all receipts with cloud storage or bookkeeping software.

Number and file invoices consistently.

Keep records for at least 6 years, as required by CRA.

4. Ignoring Cash Flow Management

The mistake: Focusing only on profit and loss statements while ignoring cash flow can leave you short when it’s time to pay suppliers, staff, or taxes.

How to avoid it:

Regularly review your cash flow statements.

Forecast upcoming expenses so you’re prepared.

Create a cash reserve for slower seasons (especially important in seasonal Nova Scotia industries like tourism and construction).

5. DIY Bookkeeping Beyond Your Comfort Level

The mistake: Many entrepreneurs try to handle all their bookkeeping on top of running the business. Without the right knowledge, errors pile up and cost more to fix later.

How to avoid it:

Learn the basics, but know when to outsource.

Work with a professional bookkeeper who understands Nova Scotia tax rules.

Treat bookkeeping as an investment — not just an expense.