Busting small business money myths
Running a business is hard enough without the added stress of bad advice. Yet, myths about money are everywhere. They spread through word of mouth, outdated advice, or one-off stories shared in small business circles. The truth: These myths cost you time, money, and peace of mind. Let’s clear up some of the most common small business money myths.
Fact: Nearly half (43%) of small businesses are dealing with the costs of money myths and mistakes.
Source: Xero
Myth: Business taxes are a once-a-year problem
Many owners think tax time only matters once a year. In reality, the Canada Revenue Agency (CRA) requires installments for many businesses, and effective tax planning is a year-round process. If you only look at your numbers in April, you risk missing deductions, facing penalties, or scrambling to come up with the right paperwork.
Truth: Staying on top of tax planning and finances throughout the year saves you stress and keeps more money in your pocket.
Myth: Automated payroll is too complicated for small teams
Even if you have only one or two employees, payroll can feel intimidating. But it doesn’t have to be. Cloud-based tools and, now AI (link to the AI article), make it simple to calculate deductions, remit payments to the CRA, and send paycheques on time. The myth that payroll is too complex often causes owners to delay hiring, pay their employees manually or even just use cash.
Truth: The right payroll solution makes managing a team easier, not harder. (But, if it's overwhelming, then maybe it's time to find a bookkeeper. Here are 5 questions to help you find the best fit.)
Myth: Profit means cash in the bank
It’s a common misunderstanding: You see a profit on paper and assume it equals money in your bank account. But profit doesn’t account for cash tied up in unpaid invoices, loan payments, or upcoming expenses. Cash flow and profit are connected but not the same thing. Healthy businesses track both to avoid surprises. Why? Because running out of cash, even when profitable, is one of the top reasons small businesses fail.
Truth: Some Canadian small business owners lose an average of $118,121 in profits due to myths like this.
Myth: Bookkeeping is only for tax season
Bookkeeping (link to the 7 ways bookkeeping article) isn’t just about preparing for tax filing. Accurate, up-to-date records help you make smarter decisions year-round: When to hire, whether you can afford new equipment, or how to price your services. Treating bookkeeping as a once-a-year chore can leave you in the dark. Treating it as an ongoing tool gives you financial clarity and confidence.
Truth: According to Intuit, nine out of ten small businesses believe their accountant or bookkeeper helps their business grow.
Myth: I don’t need a budget if I’m growing
Growth feels exciting, but it can also hide risks. Without a budget, you may overspend on hiring, marketing, or inventory, only to hit a cash crunch later. A simple budget helps you balance growth with stability. Even the fastest-growing Canadian businesses rely on budgets to plan for taxes, manage expenses, and protect cash flow.
Truth: Only one third of small businesses have an emergency fund. When the unexpected happens, 100% wish they did.
Be strategic instead of a statistic
You’re a business owner, but you’re also human. Running a business is lonely. Not to mention that some of these small business money myths have been repeated so often, it's easy to understand how mistakes happen. Huumans is here to help. Truth: Together we can all do better.