Camshaft timing off the mark

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Brampton,Ontario, Canada
I just purchased a 1975 XS650B. The bike had been stored inside for 20 years. After checking it over, my compression was 110/150. Exhaust valve seats have a build up of crap so cleaned up the seats and reground the valves new rings. I’m using a head ,tappets and top cover from a 1980 with the 1975 gearbox and barrels. When I tried to set up the cam timing i’m on tdc and when checking the cam with chain installed and when looking across the bosses with a straight edge I’m a 1/16 below the dot. I move 1 tooth and I’m way off the mark and same the other way.
Will this affect my timing ? Help!
 
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