SME Accounting
The most common bookkeeping errors in SMEs: feedback from accountants in the Bankeo network
23/7/2026
In short. When an accountant takes over the books of a Quebec SME, they almost always find the same errors. The accountants in the Bankeo network, more than 1,500 professionals, report the following as the most common: mixed personal and business accounts, poorly tracked VAT (5%) and VAT (9.975%), missing supporting documents despite the CRA and the tax authorities requiring records to be kept for six years, delayed data entry until the year-end catch-up, and late filing of DAS (Declaration of Annual Social Security Contributions). Each of these errors is corrected by a simple routine, detailed below, or referred to an audited accountant.
A sloppy bookkeeping system doesn't hurt right away. It hurts in March, when tax season arrives, or the day the tax authorities ask for your supporting documents. Since 2023, Bankeo has received over 15,000 requests from entrepreneurs, and the network's accountants who inherit books to correct describe a surprisingly repetitive scenario. We've compiled their feedback: here are the most common mistakes they see in SMEs, their actual cost, and the best course of action for each. This article complements our guide on the cost of monthly bookkeeping in Quebec .
To be perfectly clear about the methodology: this ranking is based on qualitative feedback from the field, not a scientific survey. It stems from ongoing discussions with accountants in the Bankeo network—more than 1,500 professionals—during client matching sessions and, especially, during accounting catch-up mandates. These are cases where an accountant takes over books that have been neglected for months. Errors are ranked according to how frequently accountants spontaneously mention them when asked what they find when opening the books of a new SME client.
| Rank | | Error reported | Field frequency | Typical consequence |
|---|---|---|---|
| 1 | Mixed personal and business accounts | Almost systematic at startup | Lost deductible expenses, billed sorting hours, grey area in case of audit |
| 2 | Seizure postponed for months (the shoebox) | Very common | Costly catch-up at the end of the year, decisions made blindly all year round |
| 3 | VAT rates incorrectly configured or poorly tracked | Very common | CTI and RTI lost, taxes collected spent, surprise balance at production |
| 4 | Missing supporting documents | Very common | Deductions denied in audit, non-claimable CTI and RTI |
| 5 | No monthly bank reconciliation | Frequent | | Duplicates, omissions and anomalies detected too late |
| 6 | Misclassified expenses | Frequent | | Fixed assets reclassified as expenses, distorted financial statements |
| 7 | DAS calculated or submitted late | Common among employers | Penalties and interest from the CAF and Revenu Québec; |
| 8 | Shareholder advance account without tracking; | Regular in incorporated companies | Advances reclassified as taxable income; |
The following sections address these errors one by one, with the Quebec tax context and the correction that accountants in the network most often recommend.
This is the fundamental error, the one that fuels almost all the others. A coffee paid for with a business card, company software charged to a personal card, a transfer from the company account to a personal account "pending": every mixed transaction will eventually have to be identified, justified, and reclassified. The network's accountants recount cases where half the billed time is spent solely on separating personal from professional activity.
In Quebec, Revenu Québec administers both the 5% and 9.975% sales tax. Registration in both systems becomes mandatory once your taxable sales exceed $30,000 over four consecutive calendar quarters; below this threshold, if you are a small supplier, registration is optional. Accountants in the network have identified three recurring issues related to these taxes.
The taxes you collect are not considered income. The practice most recommended by accountants in our network is to transfer the collected VAT into a dedicated savings account as it is received. Filing a tax return becomes a formality instead of a cash flow shock, and the same account can be used to hold funds for tax prepayments.
The general rule of the CRA and the Canada Revenue Agency is clear: accounting records and supporting documents must be kept for six years after the end of the last tax year to which they relate. Legible digital images are acceptable, which solves the problem of thermal receipts fading: simply photograph the receipt on the same day using your accounting software, and you're all set.
The most common pitfall encountered in the field is believing that a bank or credit card statement is sufficient. It proves that a payment was made, but not what was purchased or the taxes paid. To support a deduction and claim your input tax credits (ITCs) and input tax refunds (ITRs), you need the supplier's invoice with a description of the goods or services, a breakdown of the VAT, and, above certain amounts, their tax registration numbers. During an audit, an expense without an invoice is a deferred deduction.
From the moment it hires its first employee, the SME becomes a tax collector for the government: withholding tax, social security contributions, and unemployment insurance contributions, plus employer contributions. These withholding tax deductions (DAS) are paid to the IRS according to the schedule assigned to the company, often monthly. The network's accountants see two common problems: DAS calculated manually with outdated rates, and late remittances because the money was used for something else. Penalties are applied to the amounts owed and increase with repeated offenses, while the solution is simple: set aside the DAS with each payroll.
The other neglected routine is monthly bank reconciliation: comparing, line by line, what your books say and what your statement says. This is the safety net that catches duplicate entries, forgotten bank fees, unrecorded customer payments, and suspicious transactions. Thirty minutes a month when the books are up to date; billable hours when everything is done at the end of the year.
The good news about returning to the field: none of these mistakes require any special skill to avoid. A short, regular pace is all it takes, and that's exactly what an accountant or bookkeeper puts in place first.
| Frequency | Key tasks | | Mistakes prevented |
|---|---|---|
| Each week | Photograph and file invoices and receipts, issue customer invoices | Missing documents, seizure postponed |
| Each month | Bank reconciliation, expense categorization, tracking of VAT collected and paid, setting aside of DAS | Duplicates, incorrect categorization, surprise tax balance |
| Each quarter | VAT production according to your assigned frequency, verification of DAS remittances | Production delays, penalties and interest; |
| Every year | Year-end file for T1-TP1 or T2-CO-17, review of the shareholder advance account with your accountant | Last-minute catch-up, advances reclassified |
If this routine doesn't fit into your schedule for more than two months, it's not a failure, it's a sign: accounting has become a task to delegate. Our guide to CPAs and bookkeepers explains which level of professional is appropriate for which situation: day-to-day data entry falls under the bookkeeper's purview, while corporate tax returns (T2 federally, CO-17 in Quebec) and tax rulings are handled by a CPA from the Quebec CPA Order.
Les comptables du réseau sont unanimes sur un point : un rattrapage de douze mois coûte plus cher que la même saisie faite au fil de l'eau, parce qu'il faut reconstruire l'historique, courir après les pièces et corriger les déclarations de taxes déjà produites. Côté chiffres, les PME paient une médiane d'environ 3 000 $ par année pour leurs services comptables, la plupart entre 500 $ et 6 000 $ selon le secteur et le volume de transactions. Basé sur les honoraires réels de 1 248 mandats conclus via Bankeo (2024-2026), sur plus de 15 000 demandes reçues; le Baromètre Bankeo détaille ces honoraires service par service.
Well-maintained accounting actually costs less: clean books reduce the hours billed at the end of the year, as we explain in our tips for reducing your accounting fees . And to compare profiles before choosing, you can browse the verified accountants in the Bankeo network .
Bankeo connects you free of charge with verified accountants from its network of over 1,500 partners, experienced in working with Quebec SMEs, VAT, and accounting adjustments. This service is free, with a response within 48 hours, no obligation, and we'll support you for as long as you need.
Find my accountantAccording to qualitative field feedback from accountants in the Bankeo network (1,500+ professionals), the most frequently reported issues are: mixed personal and business accounts, delayed entry for months, poorly tracked VAT, missing supporting documents, lack of monthly bank reconciliation, poorly categorized expenses, late submission of DAS (Declaration of Annual Social Contributions) and shareholder advance accounts without follow-up.
Generally, the CRA and Revenu Québec require you to keep your accounting records and supporting documents for six years after the end of the last tax year to which they relate. Digital copies are acceptable, provided you can produce them upon request during an audit.
No. The statement proves that a payment was made, but not what was purchased or the taxes paid. To support a deduction and claim your input tax credits (ITCs) and input tax refunds (ITRs), you need the supplier's invoice, with a description of the goods or services, a breakdown of the VAT, and, depending on the amount, their tax registration numbers.
Yes, if your business is registered for GST and QST. You can recover the GST paid on your business purchases through input tax credits (ITCs) and the QST through input tax refunds (ITRs), deducted from the taxes collected on the return filed with Revenu Québec. Each claim must be supported by a compliant invoice.
Payroll deductions belong to the government, not the employer. Late remittances to Revenu Québec or the CRA result in penalties calculated on the amounts owed, plus interest, and repeated offenses are even more costly. The solution: set aside the payroll deductions with each paycheck and follow the remittance schedule assigned to your company.
Les PME paient une médiane d'environ 3 000 $ par année pour leurs services comptables, la plupart entre 500 $ et 6 000 $ selon le secteur et le volume. Basé sur les honoraires réels de 1 248 mandats conclus via Bankeo (2024-2026), sur plus de 15 000 demandes reçues; le Baromètre Bankeo détaille par service. Le jumelage avec un comptable vérifié du réseau est gratuit pour l'entrepreneur.
General information provided for guidance purposes only, reflecting the current 2026 tax regulations. It does not replace the advice of an accountant or chartered accountant: always consult a professional for your specific situation.
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