"The word accounting comes from accountability, if you’re going to be rich, you must be accountable for your money"- Robert Kiyosaki
All businesses of any scale require accounting. Accounting is the language of business that develops transparency for the everyday transaction and a properly working system. Every business proprietor must be concerned about his account books. Even if you hire a professional for your business accounting, you must know how accountancy works in order to understand the books that your accountant is creating for you. Accountancy is the process through which the net profit or loss of the organization is determined. It also helps you point out the transactional errors that are causing you to lose money or business. Accountancy is highly proportionate to your financial management. A lot of companies fail in the long run if their books lack clarity or information.
Several business owners restrain themselves from accounting due to incomplete knowledge. Many of them stay away from it just because it includes working with numbers. Accounting is the factor of a business that can never be ignored.
A set of rules used for the documentation of everyday transaction is known as accounting. Accounting gives the analysis of the working conditions of an organization and helps you measure the future opportunities or downfalls so that you can take considerable actions.
Managing your own business accounts can be a tough job if you’re bad with numbers, but at least knowing the skills will help you with the proper rules to begin your bookkeeping.
Economic Entity Assumption
The first thing that you must take care of before beginning to cross-check your books is the economic entity assumption.
Economic entity assumption is a mandatory concept used in business. It requires the business proprietor to separate the data from their business transactions and personal finances. This is legally required by the business standards and must not be ignored. This concept ensures that there is no interface amidst the operations of the business firm and the personal finances of its proprietor. As it would give the proprietor a chance to show expenses and losses that were personal and the law doesn’t allow it due to taxation.
Another factor that economic entity assumption points to is that the bank accounts of the owner and that of the business must be separated into two different accounts. This will keep the personal and business transactions discernible to the accountant. Depending on your business structure, economic entity assumption will be enforced upon you by law if you have a limited liability company. This is to make sure that the transactional data on the ledgers are being created solely by the business which is seen as a separate entity from the proprietor.
Order and organization are what keep the world from spinning into chaos. So one of the essential skills that you must have is organization in your firm. A business makes a tonne of transactions throughout a business accounting cycle, and as a proprietor, you are responsible for being in knowledge of all of them with an eye to discern one transaction from another. There are principles to organization that help you make sure you are in close sync with your transactional info.
The first principle that you must accept to be organized is to avoid cash transactions as much as you can. Cash transactions leave behind very little or no information about the transaction that is required to document the transaction in your books. Business accounting requires categorizing transactions in the books, but the payments made in cash without proper proof or description of the transaction makes it difficult. If you’re gonna have to make immediate transactions, its better you stick to credit or debit cards, bank transfers and checks. This way, you won’t have to rely on your memory or a useless little receipt to define what the transaction was about. You can easily record your transactions from the bank statements you will receive.
The second principle that you must not forget about is to have a timely record of your transactions. Whenever a transaction occurs in your business, make it a habit to record that transaction at the very moment, and on the same day, you must enter the details of the transaction into the proper books of your business. If you’re bringing out the books from 6 months earlier to analyze the current position of your business, the decisions you make would also be bygone. Making perfect decisions for your business requires the transactional data to be regularly updated in your books and the most recent data must be used, which is not more than a month old.
If you want to do your business accounting yourself, bookkeeping is a must. Even a basic idea of bookkeeping is necessary in order to record and store transactions in an orderly manner. Bookkeeping is the process in which all transactional data is documented, categorized and recorded in books for separate transactions.
Every business requires bookkeeping to help it know what the problem is if an issue occurs. It is important that you always record every transaction into proper bookkeeping records so that when the time comes, you have not lost small but crucial data by ignoring bookkeeping.
Bookkeeping begins with the collection of all the transactional documents like bills, receipts or bank statements. These documents then provide for all the initial data that is supposed to be recorded in proper books. The bookkeeping records are then supposed to be turned into analytical data which take the shape of financial statements like balance sheet, profit/loss statement, cash flow statement or income statement.
The basic principles of business accounting may be taken care of by you. Collection of data from every transaction and recording them into different books can be done easily by the business owner who is present during every transaction. But when it gets to the proper analytical statement creation, the technicalities of business accounting may not be easy to get a grasp of. If you wish to have a professional to have a look at your numbers, contact ATS Accounting for queries.
Accounting and bookkeeping are practices that can be tedious. These functions although increase the efficiency of a company and add to the economic process of the nation. The practice of outsourcing accountants’ service has been in the system for a long time. Outsourcing is the practice of having a certain job function handled outside the company. It is just one means to cut costs and help the daily work of business processing. Managing the accounting processes for a company includes various functions such as updating transactions and maintaining the essential accounts daily. You may wonder if it's the right choice to outsource your bookkeeping services. But rest assured, it is beneficial to outsource the accounting and bookkeeping of your company, and here’s why.
Ease of Availability
Hiring a full-time or part-time accountant may not be an easy task. Accounting and bookkeeping are processes that require to be recorded daily to maintain the right set of accounts. An in-house person may not be available at all times which can stun the ongoing process. Outsourcing an accountant, on the other hand, would be quicker and efficient. There is a guarantee of them being available for 365 days of the year and around the clock. With their expertise and well-equipped team, it would be comparatively easier for them to complete tasks and submit the data and the required accounts and reports on time. In contrast to which, it may be cumbersome to contain the in-house employees and extract necessary accounts on a timely basis. Also, being an employee of the company, the in-house accountant would be entitled to holidays and off-days from the company.
Access to the Latest Tools
Today, accounting is best done when you have access to the best accounting software and tools like QuickBooks. As a small business, getting the paid version of this software can be expensive. Plus, finding people who can efficiently work with these tools can be difficult and time-consuming. Professional accountants are equipped with advanced accounting software to cater to the companies requirement of personalized reports. It would take time for the business to make important financial decisions. It is also easier to obtain any information related to accounting and payroll which the professional accountants would have knowledge of. Outsourcing to the right accountant will not only provide you with expert staff but you will also get access to the latest accounting tools.
Reduced Employee Cost
Outsourcing your accounts to a professional accounting team will reduce your cost dramatically, and allow you to concentrate the limited resources on your core business. You would have to invest zero employee cost on the accountant. With the benefit of paying only their fees, your company would not have to worry about expenses like paid leaves, insurance, payroll taxes, incentives, bonuses, and other employee benefits. You can eliminate overhead costs connected to the services you receive, and thereby deploy the resources at the area where you require to maximize its leverage.
Focus on Your Core Business
Most businesses don’t have accounting as their core competence. The growth of a business relies on the increase of the sales and service of the company which ultimately would lead to profits. Putting away focus from administrative tasks like accounting and bookkeeping gives you ample time and resources to spend on your core business. A professional outsourced accountant would be able to handle the accounts at the back-end while you work at running your company. It would make it simpler for you to focus on your clients and core processes for the business while they manage the accounting of your company. Spending more time and energy with clients and customers with a high level of service would bring them satisfaction.
Minimized Office Cost
An outsourced accountant would work with his team away from your office. This makes you liable to only pay the fees for the work they deliver to you. When you hire an accountant on your in-house team of technicians or any other business, it would be mandatory for the company to at least provide a decent working space for them. This would affect your company’s opportunity cost of hiring a team member to cater to your core business. Apart from the accumulation of the opportunity cost, it would also save you the extra office expenses that may incur during the in-house accountants work period in the office.
Accounting errors in the payroll or income tax filing can lead to interest charges or penalties which are staggering mistakes for a company’s future. When you hire professional accountants to manage your accounts or take care of these expenses, it reduces the risks that the company would’ve otherwise have to face. It’s not just access to expert advice but also the guarantee that a professional would meet the compliance and regulatory standards in confidence of the financial reports. Outsourced accountants specialize in their work and which make them even dependable for qualified work. These professionals would have reliable information to help make business decisions of improved nature in less time. Outsourcing the accounting work to the perfect resource would give you peace of mind and put you at the advantage of being in pace with today’s hyper-competitive environment.
You can use different cloud-based accounting applications, use similar software as the bookkeeper and share the necessary financial documents with your accountant to integrate outsourced bookkeeping with your existing accounting department. For this, let Canada’s leading accounting firm provides you with its service.Use accounting services that we offer for entrepreneurs, small and medium size business owners.
Running your business is a remarkable journey on its own. Looking after various functions, especially the accounting practices is as interesting as tricky it is. You need to look for different ways to make sure that the valuable numbers of your business don't work against you. And in this process, when you follow the same pattern in accounting, the process starts to stagnant. Thus, you must consider the following accounting diversification tips to ensure that your business moves ahead with a balance of fresh and traditional ideas.
Start From Your Employees
Your business's success starts with your employees. So make sure you have employees who can contribute to accounting diversification. If you don't have enough people in your office, hire new ones. Intentionally seek people with different points of view. Invite people who are collaborative and are not afraid to express their ideas. Their contribution may lead to new streams of revenue that are aligned with your current services. Once you have a good crowd with varied mindsets and ideas, encourage them to brainstorm and think of diversification ideas. As you manage your business, reward team members who think outside the box and offer new perspectives. Acknowledge fresh ideas so that they can continue contributing to the process. Make a list of all these ideas and contemplate. See which ideas can be workable, and start taking actionable steps in those directions.
Use Different Accounting Methods
When it comes to accounting diversification, one thing that you can easily do is diversify the way you account. Today, several options are available for small businesses to opt to complete their daily accounting practices. Rather than choosing just one type and sticking to it, you can try your hand at different alternatives. Firstly, opt for the traditional way of accounting of using Microsoft Excel or Google Sheets. You can manually enter the less confusing parts of the accounting system, such as the payroll and bonuses if you have a small group. For other more tedious tasks like tax calculation and filing, you can use the best accounting software available. Most of these accounting software require you to pay in order to use the complete services. With accounting diversification of accounting methods, you save a lot of money by doing accounting in traditional ways.
Make Different Teams
Rather than appointing one person to look after your organization's accounting practices, you must make different teams or small departments. Let each of these teams handle one accounting process. Different teams can handle tax planning, regular bookkeeping, payroll management, and other processes. When different people are appointed to do a specific task, they tend to focus more on that area. This not only helps in getting innovative ideas of running those processes efficiently but also helps you to know who to talk to for a specific topic. For instance, if you want to know about tax filing and deductions, you can directly get in touch with the tax department. This way, people will be able to work with more freedom and creativity, which will further benefit your organization. Also, diverse teams resolve challenges at a quicker rate than homogenous teams. But keep in mind that creating different avenues will cost you extra as you will have to hire more people.
Hire an Accountant
Although it is an added expense in your overall business budget, the expense will be worth it. Just like when a company needs legal help, the only option is a lawyer, an accountant can guide the company for accounting diversification. This professional will be your assistance at every point and help you with several more ways of accounting diversification. The professional knows how a business should ideally function and what are the best-proven ways to diversify not only accounting but all other business processes so that you can run your business efficiently and within the budget, you outline.
Accounting diversification is a lot more than just a simple idea. It is a master plan that can take your business on the path of success and efficiency. Follow these easy tips and try to cut down on extra costs, and you'll continue being successful. Keep in touch with your accountant so that they can help you at every point in your journey.
Many entrepreneurs use Excel spreadsheets to track and record their finances. Due to the extensive features of Excel spreadsheet, it becomes more manageable to account your funds. Many accounting services providing firms also use this application, making it a default for accounting. However, even the best of the things can end with errors unless you know how to use Excel spreadsheets well. We have listed down a few Excel spreadsheet mistakes you should avoid while accounting.
1) Formatting Errors
Do you know the small window that pops up on your screen after you click Save As, which says ‘Too many different cell formats’ that leaves you no option of keeping your work? Yes, it can give you a panic attack. Besides not being able to save your work, Excel can itself change the formatting of your cells and create confusion. When the Excel spreadsheet software is unable to recognize the format, it pops up a small window saying ‘Excel found unreadable content in the file’.
Additionally, do not try to copy-paste data as doing so increases the size of the file. Even though you have the copied data on your clipboard, sometimes the software will pop up another window that says ‘Microsoft Excel can’t paste data’. To avoid all the pop-up windows from interfering your accounting, try to keep your formatting options to a minimum. It is better to limit your formatting rather than lose all of your accounting work.
2) Data Entry Errors
Using incorrect characters or missing a few ones is a human error. False characters is an error for which you cannot sue someone because it could have happened by you. You probably used a minus instead of plus or decimal points in the wrong places. It does not seem like a big deal, but you could end up losing a significant amount of money. In 1995, Fidelity’s Magellan fund had a loss of $1.3 billion, because instead of using a minus, their accountant had used a plus. The whole scene created confusion and doubled the entire money that made them wonder how there was an unknown gain. There is no real solution here except for hardcore reviewing, but you could leave the job in the hands of accounting services.
These errors are similar to character errors, except the numbering becomes a mistake. About ninety percent of accounting is all about numbers, and if you mess up the numbers, you indirectly mess up ninety percent of accounting. Many businesses have ended up in losses due to this kind of error. For the most part, you can review carefully or hire accounting services.
3) Incorrect Formula Range
You input your IFs, Index+Match and Structured References after writing a long and complex formula, but then Excel ends up denying it and shows different errors. Formula errors are #value, ####, #n/a, #name, and #ref. Yes, Excel does love the hashtag trend but you must be tired of it by now. There are a few ways to fix formula errors and get rid of these #errors. An incorrect formula range can sometimes not even show due to whatsoever technical reasons, and this again requires careful reviewing. There was a time when two Harvard professors made this error of inputting a wrong formula range. The hilarious part of the story is that their student working on the assignment thought they made a mistake because two well-known Harvard professors could never make such an error. The example is given only to assure you that anybody is capable of making such mistakes, but you can try to avoid these by knowing before-hand.
4) Lack of Review and Skills
Studies reveal that even when you review your spreadsheet yourself, there is a high possibility that your spreadsheet contains a large magnitude of errors. Take this sentence and remember it every time you complete accounting work, and so that you can review carefully. Allow other people involved to review your spreadsheet. A third party will be more likely to point out mistakes quickly. Besides, not all errors are distinct, and there is no certainty to what extent each error can affect your accounting.
Usually, in your company when you have training taking place for recruits, you overlook the need for spreadsheet training. Not just you, but everyone assumes that Excel is a software that any person would be able to figure it out themselves and get the hang of eventually. You must educate them on the methods and techniques required to operate Excel spreadsheets. With this, you can avoid not only your errors but also possible errors from your employees working on the task. Although, once you appoint any accounting services having the right knowledge, there will be one less thing to worry about in your daily schedule. Besides, there are other ways in which accounting services can benefit your business.
5) Lack of Professional Help
Accounting is a full-time job, and unless you have mastered in accountancy you should avoid trying it yourself. Reading up articles on the internet might not be enough to account the finances of your business. Accountants have ample knowledge, the required software skills, and the skills to fix potential errors as well. Therefore, if you are new to the world of business accounting, consider hiring accounting services rather than experimenting on your own and facing losses.
Now that you know the possible mistakes to avoid, you can keep this in mind and track your accounts without worries using Excel spreadsheets. Moreover, you can always contact reputed accounting services to help you with your finances.
Running a business is a huge task, especially when it comes to keeping in check the expenses, wages, income, and other money-related items. It becomes exceedingly difficult if the monthly budget has gone overboard and you get drowned by the thought of how to manage other things when this happens. Quite a lot of times, such a situation is unlikely, because you create a cutting-edge plan. Hence, plan in such a way that you have some dollars left even if you go overboard. Here are a few things suggested by most small business accountants that you can try to cut down on expenses and save money.
Spending on Supplies
Your partial monthly expenditure goes into buying supplies for your office, but that does not necessarily have to be the case. Wholesale shops are set up for a reason - for you to purchase supplies in bulk at a reasonable price. Instead of buying stationery only when needed, it is better to buy supplies for at least two-three months all at once. This way you can bargain a lot and buy in bulk at an attractive price. Besides, you will not have to keep commuting repeatedly as well. Keep in mind to buy things in bulk that have a higher expiry duration and buy food in bulk for a month that is the minimum expiration for usual canned foods.
For other resources like furniture and equipment, you can buy those that are second-hand. You do not need to have everything new. All you need to have is tidy furniture and functioning equipment. Thrift stores and second-hand shops are places that should always be your first preferences.
Cut Down the Production Cost
When it comes to production supplies, keep track of every last material. Usually, companies overlook this due to the workload, but in case the suppliers try to increase even 1% in the bill, it later adds up to a lot in your office budget. Renegotiate with suppliers over the expenditure on supplies every month as it is not very time-consuming.
Even though the required software is a one-time investment, but you should still consider opting for free downloads and trial versions. You can access free software from a website called Download, or you could install trial versions if you want them for a limited time. Student versions are also quite cheap than the usual ones.
Master in Marketing
Marketing is one of the most costly investments a company has to make. Marketing is not that difficult and you can do it yourself in case you have more time than money to spend. All you need to do is learn the basics that you can conveniently look up on the internet. A lot of marketers have their websites, podcast lists, webinar channels, and other information resources.
You may have heard about powerstrips - the rectangular box-like structures that have multiple sockets in them that help in distributing power equally to all the outputs. However, a smart power strip does not just distribute equal power but also conserve around 50% of energy. It immediately shuts off the power distribution to the plugs that are on stand-by mode. A smart powerstrip helps a lot when you have multiple desktops working all day in a workspace.
You must have subscriptions that you no longer need, and they add up to a considerable chunk of money when not cancelled. You can easily cancel subscriptions with a few emails rather than paying for something that is not benefiting you. Just cancel those recurring services like newspapers or monthly periodicals.
Post Jobs Locally or on Social Media
You will learn to do this via marketing, but it is better than spending money on job posting sites as they are expensive. Hence, market all the vacancies you have and promote posts on your Instagram or Facebook pages. Post social media job updates and you could even provide employees with a weekly chance to post updates for social media marketing, and in return, they get to learn something new. You can also send your job listings to local university career portals.
Natural Light Location
Natural light has two benefits. Firstly, you reduce your electricity cost, which saves up a lot of money. Secondly, natural light is more recommended for workspaces as they increase the productivity of your employees. Working on computers the entire day can be draining, and every person can have a lifted spirit by getting a little sunshine and an outdoor essence. So open the curtains and blinds and let some natural light in.
Online Over Offline
Try to limit the use of paper. Not only is this eco-friendly but it will also save you money. Use Google apps or other business platforms like Slack. You can instead have documents backed up online in the cloud, making it less likely to be misplaced.
In case you have a meeting outstation, keep your first preference to have the meeting via video call or Skype. Travelling can be extremely time and money consuming, instead save both by going online and you can spend the two factors on other projects. You can talk to your small business accountant to know more of such "go digital" tips.
Not only do all these tips help you save money, but benefit in several other ways. You learn new skills through marketing and increase productivity in your workspace, which is essential for an office. Moreover, once you start saving from your office budget, you will slowly practice this in your personal finances as well. There are more methods in which you can save this money and can consult small business accountants as well. It helps in keeping personal taxes on track. These work great for small businesses as they have more experience in this field. Now that you have learned how to save money, where will you spend this money? Probably in your next monthly budget? You could instead invest the money, something that your small business accountant will generally suggest you do.
When it comes to the success of a business, hard work and dedication do count. But the real responsibility is on the person who takes care of the accounts. Earning money is the real motive of any small businessperson, but running the business efficiently, keeping the money constantly flowing through all the aspects of your business, and maintaining the accounts are the tricky parts.
Do you know Phil Knight? Or his brand, Nike? You surely do. Phil Knight is the co-founder of Nike and its ex-CEO. Phil Knight was an accountant who formed the company and used the income to take the company to the top of the chain.
Warren Buffet, a great financial mind, said that ‘accounting is the language of business.' Business owners can make a lot of money through their hard work and marketing, but being accountable for all the money you earn and spend, gives you control over your business. Proper accounting has many perks for your business, but some businessmen take it lightly and fail to unlock the true potential of their business. Misconceptions about accounting, like the ones mentioned below, force people to take back their steps from hiring a professional accountant.
1) Accountants ONLY Do Taxes
This is a misconception in the minds of more than half of Canadians. People like to believe that accountants earn everything for the whole year in just four months of tax season. It is untrue. Accountants spend a majority of their early adolescence studying different sectors of the business world and learning the rules and regulations to tackle business emergencies and to steer the money flow in the right direction. A small business accountant can be a financial advisor, a problem solver, a bookkeeper, investment tracker, and a lot more.
2) An Accountant and a Client Must Live in the Same Town
Thoughts like these emerge from the minds of simpletons who have failed in keeping up with technology. That is rude but true because the emergence of a fast-paced technological era knows no bounds in connecting people on two different sides of the world. It is true that not all people can be trusted with money, but it does not mean that you cannot find the right accountant. Online measures can always be used to send documents to your accountant through a safe and legal web platform.
3) Small Businesses Don’t Need an Accountant
In economics, there are two terms called ‘macroeconomics' and ‘microeconomics.' Macroeconomics deals with the household finances of common citizens, whereas microeconomics deals with national and governmental expenses. In the same way, accountancy not only deals with rich people problems but also has the small pins of the wheel to make the smallest of businesses highly efficient and fruitful. The benefits of hiring a professional accountant for a small business include - easy tax returns, directing the finances towards the needs of the business, differentiating personal and professional accounts, and problem-solving for your business. Also, most big organizations have an in-house accounting department, something that most small organizations don’t have. Therefore, it becomes even more essential for small business owners to hire an accountant.
4) You Can Co Accounting if You Can Do Math
Accountancy involves the common calculations of mathematics, but that doesn't make it an easy process for anyone with a calculator. Accountancy is a process that includes gaining knowledge about a set of accounting laws and complying with them to make a report of your business. You cannot just add up your money and show it on a sheet. There has to be a proper analysis of the given data after which the accountants break down your transactions into arrays of entries and apply certain calculation methods to show the exact financial position of the business. Mathematics is the language of the universe, but the language for business is accountancy. And if you don’t know this language well, you will have to hire an accountant.
5) Outsourcing Accountancy is Loss of Control
Remember the high school test questions about several men doing a job together to accomplish it faster. Well if not faster, then delegating different tasks to several people leads to more efficiency and decreases the amount of effort on every person. There is a common misconception among people to have an internal accounting team rather than outsourcing it to be in-the-know of your business’s financial status. But outsourcing a company's accounting also provides you with the financial information about your business as the professionals keep you in the loop at every point. When you outsource accounting, there are more important things related to your business that you can add to your priority list. A small business accountant can take care of your balance sheet, while you can balance your work and employees.
6) Outsourcing Your Accounting is a Security Concern
No one wants their business plans to be revealed to a rival. The account-related and financial documents of a company are the most cared for as they contain the premonitions that you can make for the future of the company. Accounting firms are bound to legal privacy policies that forbid them from sharing critical information about their client's business. So, you can rest assured that the secrets of your company are safe with your small business accountant.
Now you know what the myths have in common. It’s ignorance of the facts of accounting and bookkeeping. Accountants are skilled people who can utilize the proper calculation methods and use the laws of accountancy wisely to get you out of trouble — hiring a small business accountant? It’s an easy task. While you take care of the primary transactions and services of your business, your accountant will get you through all the steps necessary to use accounting for the welfare of your business. If you're a small business with a considerable income, you should utilize accountancy to initiate a constant growth cycle.
Being the owner of a small business attracts a bunch of responsibilities. While every activity in your business needs your focus, time, and effort, you can easily fall into the wrong sense about managing your business’s books of accounts on your own. You may think if you do not have a massive list of daily incomes and expenses compared to a large business, why is there a need to hire an accountant and a bookkeeper, especially a full-time one. So here are some reasons that will make you think why your business needs a full-time bookkeeper.
1) Borrow Additional Help for Day-to-day Operations
As an entrepreneur with a lot of responsibilities, you may get pulled away in a dozen different directions every day. If you are slightly knowledgeable about managing your finances, doing it on your own can create a risk for your firm’s growth. As a business leader, you need a constant focus of things that need new strategic directions, execution of major strategic decisions, building your team, and even expanding your business. With your business expansion, you could be bogged with accounting. Having full-time bookkeeper will help you to focus on the growth of the business and taking effective, solid decisions for your business.
2) Provides Consistency in Your Invoice Processing
We all know that invoicing contributes to many significant factors to your company’s cash flow. Having your invoices submitted on time on a consistent level and convenient format, you later get a lot of time to spare for payments. Without following a standard invoice processing, you can easily expose your business to the risk of having your revenue stream to collapse. Not having a consistent follow-up with the cash shortage and other problems in your invoicing system in the early days of your business can create a major issue for your business. Hiring a full-time bookkeeper helps you to regain control when it comes if there is a shortage of cash or addresses any invoice-related issues at the earliest.
3) Manages Your Payroll
Managing payrolls is another critical function that you need to consider by putting it on top of your list. When you work with your employees, you can miss a day or two to send the paycheck or correct an error if your team is small. But procrastinating the payroll issues can damage your team morale severely. To avoid the payroll issues, you need to hire the bookkeeper to establish and maintain control over it.
4) Get Your Finances Straight
You need to know that most of the successful businesses did not stay small forever. Every business needs growth. When you have successfully attracted more customers, invested in more resources, and build your infrastructure, your finance can be much more complicated to handle on your own. Handling the finances even then can make it riskier for anyone. When your business starts getting over your head, you need a bookkeeper who is aware of your business financial condition before your expansion and improves your financial situation in the future.
5) Saves Time
If you are managing your account reporting, it can take you weeks and some time from your work to work on it. On average, an entrepreneur should spend an hour every two weeks to capture and record the information. Doing your books takes your valuable time as you tend to spend more time capturing and recording the accounting information. As a business owner, you cannot afford to spend your valuable time on these things. You are the mastermind for your business, and you need to take care of the operational function and save time for what needs your time the most. A bookkeeper is an expert in its field and focuses on providing you with the best service in a limited time.
6) Helps You Keep Your Passion
Ask yourself - Did you start your business only to do your accounts? Is crunching numbers and composing financial reports what you want to do for your business? Of course not! Many businesses get burned out fast due to the overloading of the things and doing everything on their own. You don't want your business to be one of them. As an entrepreneur, you need to follow the passion that made you start your business. All you need to do is forcing out the things that can make you lose out your interest. Hiring a full-time bookkeeper will help you take over your financial aspect so that you can focus and follow your passion and the growth of the business.
7) Provides Expertise
To handle the financial accounts on your own, you need to have a background in finance. You need to have a working knowledge of accounts and taxes. With constant updating of rules and regulations in terms of taxes by the government, it is difficult to stay updated all the time. As a business owner, you have a limited time in your hands for your business. Whereas, a bookkeeper will always be updated with the tax laws and accounting rules, thus providing expertise for the financial status of your business.
8) Assists You in Your Firm’s Growth
At the start of your business, your business gains some level of stability. Growth requires you to focus on your core business needs. However, when you do all the things on your own, your pace of growth reduces. You need to pull yourself out of the tedious aspects that prevent you from pushing your business forward. Rather than looking after little tasks that can take away your focus from the core activities of your business and prevent you from using your unique business talents, hire a bookkeeper to give your business the best care financially.
Having a bookkeeper has a lot of benefits. The decision of hiring a bookkeeper depends on your firm’s needs and your preference. Book a free consultation with your nearby small business bookkeeping service provider if you live in Edmonton to help you decide and make a right path for your firm.
Certain things shouldn’t be mixed, no matter what. Business and personal finances are just those things that should be kept distinct. Mixing both of these finances only leads to confusions and potential losses (and disasters). If you use your money interchangeably between personal and business purposes, it will become difficult for you and your small business accountant to determine business expenses.
You ask any small business accountant, and they’ll suggest the same. Why? Because it’s a big NO-NO in the world of business accounting. So how do you keep these two different and unmixed? It’s simple; just follow these seven steps.
1. Set Up Separate Accounts
First things first, open two separate accounts for your personal and business income and expenses. Do you already have a personal account which you are using to look after your business as well? This is a big mistake! You may lose track of your business incomes if you let all your personal and business incomes get accumulated at one place and make all your payments from there. Hence, find out which banks are offering the best business offerings, and open a new business account in that bank. Get a new credit card as well for your business so that you can look after major business expenses separately. Having a separate business credit card means you won't be tempted to use your credit card.
2. Store Receipts Separately
Are you a person who recycles shoeboxes and cereal boxes for storing important documents? Yes? Great! So now, you will have to find one more box and separate all your business and personal receipts and invoices. If you don’t use these boxes, then choose some other boxes, or drawers maybe, as two separate physical places for your business and personal affairs. During the time of financial audit or tax season, your small business accountant will find it easy to look at your business expenses and incomes. If you hand over a file full of mixed documents, it will waste your time as well as theirs.
3. Draw a Line
You have created a separate business account and have a separate credit card as well. What next? Now, it’s time to change the way you spend. Use only the business card for business-related transactions. If you have exceeded your home’s budget for the month, don’t be tempted and use your business credit card to buy groceries and gifts. It will only impact your business accounts. Set separate budgets and stick to them. In case you cross either of your budgets, DON’T touch the other account.
4. Pay Yourself
As you are the boss, you need to pay yourself too. Just like you release salaries for your employees every month, you must do it for yourself as well. Set a realistic salary amount for yourself. On the 1st of every month, transfer that amount from your business account to your account. The same should apply to the months when your business gains profits or when it’s the time for bonuses. Once you get paid, you can create your home budget from that. And then, wait for the next payday!
5. Maintain Books of Accounts
Do it for your business incomes and expenses. Preserving bills, receipts, invoices, and other documents aren’t enough. You need a written overview of all your incomes and expenses so that you don’t miss out on any transaction during tax filing or calculating profit-loss figures. If you only rely on documented proofs, you may miss out on minor expenses that don’t actually have a supporting document. You and your small business accountant will end up wondering where your money went. Hence, create detailed books of accounts for all your business transactions. You can use software like QuickBooks, or let your accountant do it for you.
6. Separate Assets
This is very important! Along with separating your accounts and budgets, you also need to separate assets. If you need a new laptop for your business, pay for it from your business account. If you are buying two laptops together - one for your spouse and one for your employee - get separate bills for each. Likewise, you must have separate bills for other stationery items, electronics, and other inventories. Have separate bills for the electricity and water you use for business purposes. Don’t end up paying these bills from your personal account, or vice versa. Doing so will only disturb your budgets, and again, confuse your small business accountant.
7. Explain It to Your Loved Ones
Well, you have done everything from your end. But your family also needs to understand the importance of separating business and personal finances. Explain everything to your spouse, kids, friends, and relatives. Let them know that they aren’t supposed to use your business credit card at any cost. Also, request them not to ask you to buy something from your business’s account only because you have exceeded your monthly personal budget.
You can ask for more such tips from your small business accountant as they know what can go wrong during important processes such as tax filing and claiming returns.
At first, it may not be easy to keep things separate and tidy. But with time, you will get used to keeping your business and personal finances separate. Talk to your small business accountant as soon as you mix them up by mistake. Doing so will help the professional to separate the finances at the very moment.
Nearly every small business emerging with a new idea to bring something better for the market has seen a gradual progress. Earlier, it might have been a cakewalk managing accounts of a marginal quantity, but as it grows more significant, accounting becomes exponentially complicated. There are many things an accounting firm offers which not only reduces workload but also saves you a lot of cash with suitable return policies and tax exemptions.
If you are an aspiring solopreneur, an accountant can help you manage your finances efficiently. In some situations, this means the difference between success and failure; while in other conditions accounting in Edmonton keeps you on the right side of the law. It ensures you stay in the best financial position possible.
Hiring an accounting firm in Edmonton shouldn’t be seen as another overhead expense but rather be considered a healthy investment and here’s why!
Nowadays, there are a lot of things you, as the owner of your company, are already burdened with. You may not necessarily have the time or the expertise to look into all matters of the company. With so many tasks to perform and ideally to have a healthy work-life balance, it is a task to find enough hours in the day. However, there is one area of business management that needs and hence consumes more time than most: finance. Accounting is one of the most critical sectors of the company that decides your company's financial status.
Accounting tasks include responsibilities like bookkeeping, recording receipts, tax returns, and settling financial targets. These tasks are imperative to business success and growth but are also time-consuming.
Hiring an accountant for your small business allow you to delegate these time-crunching tasks. It lets you focus on other important matters like growing your business and having an excellent work-life discipline.
Tax Experts That Give Sound Advice
Tax returns seem pretty straightforward, but they aren't. There are multiple ways to reduce your tax bill. Consequently, methods can be utilized on a tax return and run throughout the year. As a small business owner, it is unlikely you have the time or expertise to use these methods, yet their ability to reduce costs can't be underestimated.
An accountant is a professional that knows the ins and outs of the system. If there is something they are good at, it is saving money because that’s what they are meant to do.
Accountants help slash your tax bill and free up money. You may either invest the saved amount in your business or yourself.
Helps You Manage Your Financial Assets
How to manage the assets in your business? Do you know what all the assets are and their worth? Do you efficiently account for your business assets including profits, losses, credits, and debts? If not then hiring an accountant helps you with this.
Keep Costs Down
If you were pondering that an accounting firm rips you off your pockets, you might not be aware that they do the opposite. They not only save tax money but also save money on other aspects of cost-cutting for the company.
An accounting firm also takes care of the unnecessary expenses and keeps track of all payments, thus preventing any discrepancies, mistransactions, or fraud in the company.
An accountant won't forget about expenses such as regular payments to be made to suppliers or lenders. Amounts that you haven't reviewed in a while, but accept as an expenditure. The accounting firm vigilantly monitors these expenses, ensuring you aren't ever overpaying for any resources.
Maintains Punctuality to Avoid Delays
If your business involves numerous transactions with clients, suppliers, lenders, etc., outsourcing to an accounting firm is the best way to manage everything.
You can always rely on ATS Accounting for your accounting requirements. ATS Accounting serves in Edmonton and surrounding areas. It makes sure each supplier gets paid on time the exact amount. This not only keeps things on track but also maintains professional relations. They also make sure nobody is overpaid, and the collections of payments from clients are done on time and in a professional manner.
Saves You from Legal Anomalies
There are multiple legal hurdles when it comes to managing an organization. An accounting firm keeps track of all your activities and transactions in systematic order in case of a legal dispute. Many times, you are not aware of a specific law that has come into effect; an accounting firm makes sure no such things take place, and the company faces no legal complications.
Offer Financial Counselling
If you thought an accounting firm was all about managing transactions and bookkeeping, it isn’t true at all. A proper accounting firm helps you flourish your business by offering financial advice which is beneficial for your company. The firm helps you with cost-cutting and help surge your growth offering long-term benefit advice.
Help in Business Planning
Whatever goals you are planning to achieve for the growth of your business, there will be financial implications. You can even face regulatory issues, such as employment law or obligations from the Revenue. An accounting firm benefits you by letting you tackle these issues confidently irrespective of whether you are expanding, developing a new product, diversifying, downsizing, selling, or winding up.
An accounting firm lets you do what you do best. It takes care of managing your accounts so that you can focus on other critical areas of your business. The relationship between you and your accountant should not be underestimated either. Your accountant is there to answer your queries, and because they know your business' potential, they give you informed opinions. Also, they are good sounding mediums for business propositions, plans, or financial decisions. Having somebody that you know and trust at the other end of the spectrum is invaluable.
If you would like to find out more about how an accounting firm helps your business grow, contact us or book a free consultation today!
The survey conducted by the software giant Sage reveals some interesting facts about accounting services. Around 71% of businesses outsource their accounting services. A total of 55% decision makers agreed on the necessity of accounting service. Only 10% said that they don’t need the accounting services. The survey was conducted mainly in the SMB (small to medium businesses) sector.
Saves on Effort and Time
As an entrepreneur or a manager, your time is invaluable. You need to focus on your core tasks like- to manage your company’s growth, keep an eye on the cash flow and seek more opportunities. Instead of going through the monotonality of transactional paperwork, you would be better off pursuing your business goals and implementing strategies. The accounting firms would take care of the painstaking task and record each of your business transactions meticulously.
Act as Trusted Business Advisors
When it comes to integrity, accountants undoubtedly have a better reputation than any other business advisors. About 44% of business owners seek the advice of their accountants prior to considering any other advisor. Around 50% of business owners believe that accountants provide them the most valuable advice of all their personal and business acquaintances. To give you a fair comparison, only 2% of the entrepreneurs consider other professionals like bankers and solicitors to provide them with the most valuable business advice. 15% of business owners claim that they are more transparent and honest with their accountants even in comparison to their family and friends.
Maintains the Accuracy Levels
A professional accountant would be more competent and experienced to handle your records. They can detect and prevent fraudulent transactions. You don’t want to bring the ax on your own feet by incurring losses due to inaccuracies in your record keeping. The accounting firms may also have a separate team for audits. The professional approach would minimize inaccuracy, prevent manipulation and fraud. Your financial records would truly reflect your business success.
Let’s You Find Your Work-Life Balance
One may not guarantee success or failure in business. One thing however you can be sure of is that you have to slog like a mule. To maintain your work-life balance, you must learn how to delegate your tasks. By nature, entrepreneurs are poor managers and organizers. No wonder, there are a lot of entrepreneurs who have ADD (attention deficit disorder). These people though being creative and talented are disorganized and have poor management skills.
Entrepreneurs should outsource their accounting requirements similar to the way they delegate managerial tasks to their managers. The accountant firms would take care of the tedious tasks whereas the entrepreneurs would be able to maintain their work-life balance. Proper maintenance of your work-life balance will improve your personal relationships. The improvement in your personal relationship will act as a feedback loop. The positive vibes from your relationships will end up enhancing your morale and inspiring you to achieve even more.
May Help You in Business Networking
The accounting firm you have hired may introduce you to your potential vendors, investors, and clients. They due to their knowledge, experience, and insight may help you to find perfect business associates. Due to their vast network, they might also help you locate and recruit suitable employees.
The accounting firms can analyze the data and provide you insights, which may help you to transform your business. The insight may help you to improve your business in multiple ways. You may come to know about a neglected sector which could potentially increase your profits. Similarly, the analysis reports may shatter a perception about a business segment which in reality might not be as profitable as perceived initially. The analysis may provide you statistics to arm with during your meetings with vendors, prospects, clients, and investors. The data stored in your computers is of no use unless you let it work for you. If you want to build your business, you cannot ignore analysis. Proper usage of the insights provided by the accounting firms may empower to take your business to new heights.
May Help You with a Business Plan
Due to their experience with other entrepreneurs and businesses, they might be able to share stories which are relevant to you. Whether it is a success or failure saga, you can certainly learn from it. Intelligent people don’t just learn from their own mistakes, but they learn from others as well.
Moreover, you can pluck the ideas implemented by other entrepreneurs and use them in your business. If you are getting stuck with your strategies, then it would be a good idea to discuss it with your accountant. Expert professionals from accounting firms may clear the clutter in your plans and build a roadmap for success!
The accounting firms stay up to date with all the relevant tax laws, rules, and regulations. The tax rules and regulations change frequently. You cannot afford to invest time and effort to stay on top of every new regulation. The accounting firms keep your business compliant by ensuring proper actions as prescribed by the rules and regulations. It would be wise to let professional accounting firms tackle your tax issues. They would also suggest you, ways to save on your taxes.
With 21% of small business owners admitting that accounting tasks as one of their most significant challenges, you cannot afford to ignore it. Accounting firms are necessary for your business irrespective of whether you operate as a solopreneur, small business or enterprises. The services provided by accounting firms would remove obstacles and propel your business forward.
You may get in touch with ATS Accounting INC. for any of your accounting and bookkeeping requirements. We are one of the leading accounting firms in Edmonton.
A business has different seasons just like summer and winter. There is a season when the sales are high, and the profit figures reach its peak. Then there is a season when the business is just doing well enough to break-even. But the one major season that every businessman gets stressed about is the tax filing season. In Canada, businesses have to be prepared with their tax calculations and file them by 30th of April. But planning for your taxes starts months before the actual tax filing season starts. In fact, the reason why you need to save all your documents pertaining to your financial transaction is for filing your taxes appropriately.
A common reason why many businesses fret the tax filing season is that they decide to do tax accounting without the help of a tax accountant. Even if some businesses do hire a tax accountant, they end up hiring an incompetent one that only increases their worry. So for the next tax filing season do not spend half your time worrying about the taxes and find a good tax accountant.
Types of Tax Professionals
Before you start your search to find a good tax accountant, it is essential that you understand the different types of tax professionals who can help you with your business tax filing process.
1. Enrolled Agents
Enrolled agents are people having a fair knowledge about tax filing. These enrolled agents need to pass a set of examination before they can start consulting businesses and people about the taxation process. Enrolled agents do a decent job of handling the taxes. However, these agents have their limitations. An enrolled agent may be able to represent their client during a CRA audit, but they cannot prepare the audit reports.
2. Tax Preparers
Tax preparers are unofficial consultants who assist individuals and businesses with their taxes. These tax preparers are people who have a fair knowledge about taxation, who use it for the limited period of taxation season by helping businesses. They charge a very minimal fee, which makes them a cost-effective choice for some small businesses. Since tax preparers are not officially recognized consultants, they cannot represent you during a CRA audit.
3. Certified Public Accountant
A certified public accountant is an accountant who has done an extensive study in the field of accounting and is a certified accountant that is recognized by the CRA. A certified public accountant provided comprehensive accounting services including tax planning. A CPA can not only help you in your complete tax planning and filing but also represent you during CRA audit and prepare audit reports.
4. Tax Attorneys
Tax attorneys are lawyers who also manage taxes and tax-related cases. These professionals may help their clients in preparing tax returns, but they cannot perform audits. However, tax attorneys have the authorization to represent their clients for both audits and tax-related court hearings.
5. Accounting Faculty
A college professor who has himself acquired a degree in accounting and now teaches accounts instead of practice accounting may also consult people on taxes. They may help people prepare their taxes and can also represent individuals for their tax audits. Accounting faculty may help you with your taxes for a nominal fee.
6. Certified Financial Planner
A certified financial planner can only help their clients in tax planning. They cannot take care of audits for their clients.
How to find Tax Accountants
Though you have various options when it comes to hiring a tax consulting professional, choosing a certified accountant is always advisable as they have the appropriate knowledge to help you with your tax filing. But the question is where can you find good tax accountants? Well, here are some places where you can start your search from:
1. Online Directories
The very first and the most hassle-free method of finding accountants is by looking up online. Google search can find you anything, including tax accountants near you. The very first directory to check is the Google My Business suggestions made by the search engine. You should also check out other local directories such as Yelp. These directories not only help you with the contact details of tax accountants but also user reviews of how their service is. This will help you in making the right choice of selecting a tax consultant for your business.
2. Personal Connections
People you know may help you find a good accountant. You should ask your friends, colleagues and other people in your network for recommendations of good tax accountants they have worked with. They will give you a complete feedback of how their experience was and what problems they experienced when they worked with the tax accountant.
3. Government Accounting References
A certified accounting firm that follows the proper practice of accounting will be enlisted with the government accounting referral website. So if you want to find an accounting firm to take care of your taxes who follow proper regulations, you can search on the CPA Canada website.
Things to Check When Hiring
When you shortlist a handful of tax accountants to choose from, there are a few parameters to check before you decide whom you want to hire. These include:
We go about our daily life managing our personal finances with ease. All we need to worry about is our regular recording of incomes earned and expenses made. But when the time to file our tax returns arrives, we get worried. Taxation is one aspect of financial management that needs extreme accuracy to avoid major discrepancies and avoid attracting penalties from CRA. Therefore, this coming tax season, do not worry and instead hire an accounting firm to take care of your personal tax. But before you do so, consider the following things.
The Consulting FeeSince we are already talking about managing finances, it is best to start with the aspect of money. No accounting firm is going to provide you with personal tax planning services for free, there will be a cost to it. Find out the cost. Is the firm charging by the hour or comprehensively? Generally, the fee differs from firm to firm, based on the level of seniority of the accountant that is assigned to manage your personal taxes. So, find the different fees of different firms and then choose the one that is suitable for you.
Service SpecialtiesAccounting firms generally have various accounting services and personal tax planning will be one of them. Apart from different services, accounting firms also specialize in services for specific domains of business. For example, an accountant who specializes in taxation services for businesses may not be proficient in personal tax or vice versa. So choose a firm that will be able to manage your personal taxes in the right manner.
CredentialsWhen hiring a tax consulting firm, you need to look for specific credentials. Not every accountant is well-versed to handle taxes. Tax management needs adequate knowledge about the tax rules and regulations. In Alberta, an accounting firm needs to have Certified Tax Preparer’s certified accountants. Checking these credentials before hiring an accounting firm is necessary.
ExperienceLastly, you need to know how many personal tax consulting a firm has done before you opt for it. Hiring professionals with prior experience in taking care of personal taxes is always better than hiring someone who is doing it for the first time. When looking for an accounting firm, make sure the firm has at least five years of experience in handling personal taxes.
You may think that this coming tax season would be easy and you can manage on your own. But why takes chances? Hire a good accounting firm to ensure that you do not face any issues this tax season.
Is it time to hire an accounting firm to help you manage your business finances? You’ve been running the business on your own and occasionally employ an accountant to fix the books when it seems you can no longer take the pressure of keeping the balance. But is this practice something you’d like to keep on doing? Have you ever thought of the money you could lose when time and again your books don’t seem to find balance when they should?
Hiring an accounting firm to take care of the books as well as the finances of the business might do you better. It might save you a lot of costs in the long run. With the right people doing the funds of the company, you are sure that it is kept intact and the books in a balance all the time. In particular, hiring an accounting firm can benefit you in the following:
Can Give you More Time to do Other Important Things
Unless you are an accountant yourself, it is best to hire professionals to do it. When you delegate the task, you bring in more time for you to take care of the other parts of the business. The launch of that marketing campaign has been put off for months and now is the best time to review it. Focus on the work that you can do best and let the accounting firm in Edmonton take care of all the rest.
Can Make your Office Space More Cost-effective
When you hire an accounting firm, you are getting all the expertise that the team can provide. Compared to hiring only an accountant, you will be paying for something more cost-effective, not to mention that they can genuinely finish that job that you need them to.
Can Provide you with Quality Assurance
There is nothing more important than getting your money’s worth. The accounting firm that you hire should not only provide you with one service that they are known for but an overall package of what can be done to help your business thrive – including ways on how to save on taxes.
Can Consult with the Best in the Field of Accounting
Although most accountants are skilled in handling money and finances, it is different when you’ve been doing it for years. The expertise will help you run the business and make it a success. When you know where your money is going, you can quickly focus on the other things where your expertise is needed more.
What do you get from hiring an accounting firm? You get peace of mind that your business finances are not all over the place. The experts will take care of it.
Every start-up business owner will agree that doing things on your own is the best way to save on costs. There is always that strong urge to do everything requires of the business to ensure that you are on top of everything. However, when you ask business experts, this practice isn’t the best one after all. It is critical that you consider hiring people who are experts in their field to do the job – especially when it comes to business accounting. Even if you are an accountant yourself, it is still best to have someone do the accounting of your business for you.
At this point, you might be wondering when the right time to hire one is? Do I need to hire an accountant now? Here are situations that will help you realize that hiring an accountant now may be the best decision you’ll ever make for your business:
- When the recording of all the expenses becomes time-consuming. Whether you are starting up or are in the process of growing your business, keeping up with the cash flow can be quite tough. There is that constant need to put the figures in the books, achieve a balance in the sheet, not to mention the computation of taxes. If you have an accountant, you are buying yourself not just expert work, but some free time as well. When it feels all too overwhelming to balance the books, hire an expert accountant in Edmonton and get yourself some time to focus on growing your business like you always wanted to.
- When you are new to handling business or know very little about accounting, then hire an accountant now. Just like any other skill, accounting takes a lot of time to learn and master. It requires a whole lot of practice not to mention the exposure to various sheets that will show you all the possible ways you can save on business costs and taxes. Rather than wasting your time on a minor part of your business, you should focus more on marketing it to grow as an empire. Leave the accounting to someone who knows it all too well.
- How much of the tax regulating your business do you understand? Dealing with such and the changes that it comes with can be quite tricky, that’s why it is best to leave it to the expert accountant who can be on top of it. Not only are they knowledgeable of the regulation, but they can also decipher the meanings of such laws – which is very important in keeping the business afloat.
When you ask yourself if you should hire an accountant to do the job for you, you wonder if it is worth it. ATS accounting will be of great help.
Federal or provincial? These are the two types of incorporation you choose from whenever you decide to incorporate your business. Perhaps it has crossed your mind a couple of times in the past. In fact, you must have thought of it the moment you decided to start your own business. Other people you have consulted regarding incorporating your business, in the beginning, must have discouraged you from going for it. And most expert accountants in Edmonton would only tell you that the decision is solely based on what you think.
Is business incorporation necessary? Law does not require it for all businesses, that’s why it is essential to know when the right time is for you to incorporate your business if you decide to. Although you may have apprehensions concerning it, incorporating a company comes with its own set of benefits, and that pertains to taxes.
Have you heard of small business tax deduction? The tax on businesses that fall under it is calculated at the rate of 17% of the first $500,000 income. When you incorporate your business, it means that you are distributing the shares of the business to the people that you trust. Most business owners who decide to incorporate the business declare their family members as shareholders of the company. Since the income doesn’t go to one person alone, the tax that you are charged with becomes smaller.
SBD or Small Business Tax Deduction may perhaps be the best form of tax exemption that you benefit from incorporating your business. Apart from that, you become more in control of when you will receive your share in the income earned by the business. This means that you can decide to distribute income when the tax rates are low. Such manipulation can be done best with the help of an expert accountant or an accounting firm in Edmonton.
Lastly, tax deferrals are also one way you can potentially save on tax payments in case you decide to incorporate your business. Ask an accountant in Edmonton for help to help you understand how your business can belong to the lower slab in case of tax rates.
Whether you decide to incorporate your business is really up to you. But to make a wise and sound decision, it is best to consult the expert on what to do. Only trusted accountants in Edmonton can honestly explain to you what comes with the choice and why it is best for your business today and in the future.
Do you own a small start-up business? Have you ever been told to get an accountant to help you with the books? Perhaps you have repeatedly been given this advice, but you thought you might not need one now as the business is just starting to pick up. In fact, you have thought about doing your bookkeeping in hopes that you will be able to save on costs. An accountant, after all, can be quite expensive.
Seeking help from public accounting firms in Edmonton is always something that you have second thoughts about doing, but you know it’s the right thing to do for your business. These professional accountants do not only look after your accounts now, but they also consider the stability of the company in the future. While it may seem as if you are saving money by not hiring a professional to do the books, the risk of whether you have done it right or not is always there.
Before you give in to the idea of doing your accounting on your own, here are some risks that you might run into when you do it on your own:
· It’s a Distraction
As the owner of the business, your goal should be focused on making it grow, to reach out to new markets and develop its potential for growth and collaboration. How do you develop and grow a business efficiently when you have other pressing matters like the accounting to look after? You don’t need the extra distractions at the moment, and that is what the company books are. Your divided attention will only make you commit mistakes that you shouldn’t. If you do your marketing and your accounting, you’ll have too much on your plate. Choose one. Delegate the other to those who know better. Accounting can be a distraction that you don’t need.
· It will Consume your Time
Did you think that doing your business accounting won’t be as time-consuming? Everyone who is just starting out thinks that they don’t have much to do considering that there is no steady cash flow yet. It’s easy to assume that until you have to do it. It will demand a lot of your time. And if you fail to provide it with the time it requires, your entries in the books will be all over the place. It will look out of order, and this could cause confusion that could mean losses for your business in the long run.
· It Requires Professional Knowledge that you don’t have
Are you an accountant yourself? If you are and you have the time, then go and take care of your books. But if you are not, it is best to delegate the task to someone who knows how to do it. Having a professional accountant in Edmonton who will focus on your books and calculate your taxes means getting all the help that you need. They will make sure that your company will abide by the rules of the government in terms and in processes to avoid delays in payment and mistakes in the methods of accounting.
Hire a professional accountant, and you will never go wrong. You can take care of the other aspects of the business that you are good at.
Starting your own business has always been your dream. Everyone who knew of your plans told you what a good move it was going to be – for yourself and your career. The road to success was not easy, but it taught you well. It gave you a sense of independence. Being your boss comes with its own set of responsibilities, and as they said, you have to do what you have to do to make things work. But how about your salary? How much should you get paid?
You have put in good money into this investment, and now the business is running smoothly, and there’s steady cash flow. That’s good news! Perhaps the only question left unanswered is whether or not you should get paid. If you are to be paid, how much should your salary be worth? Accountants in Edmonton have got a few tips you need to remember before getting your salary as the boss. This is to make sure you don’t overpay yourself and lose your business investments in the long run.
Tip 1: Only Take Part of the Profit
The payment that you get as the owner of the business depends on a lot of factors, including the nature of the business itself. If you are the sole proprietor of the business, you not considered as an employee of it. Thus you shouldn’t get a salary. Instead, you can draw from the company profits instead. The term distribution, on the other hand, should be used when the business has more than one owner. How much you draw should not be more than the company could afford at the moment. To determine this, you need to consult an accountant in Edmonton.
Tip 2: Get Salary Just Like any Other Employee
You are the boss. You are the owner of the business, but this doesn’t mean you can get as much money from it as you can. In fact, before you do get a salary, it is crucial that you establish a payroll account with Canada Revenue Agency. The salary you will get will be taxed like the other salaries your employees are getting. To develop a good payroll system, make sure you work closely with an accountant you can trust.
Tip 3: Consider the Taxability of the Salary you Ought to Receive
The nature of your business will help determine the amount of tax you ought to pay the government. When you are running your own business, worrying about the tax might not be one of your primary concerns. For this, you should have accountants Edmonton to do it. The amount you pay is based on the profit your company earns. Let the experts take care of it for you to avoid penalties and surcharges in the long run.
Managing your own business comes with duties and responsibilities, and it’s only right that you get paid for doing what you do. However, the amount you get should also abide by the rules you and the government have put in place. In all this, an accounting firm you can trust can help ensure that you are paid and that your business remains financially secure.
In the span of time that you have been running your business, have you ever asked yourself what you consider as its assets and liabilities? When it becomes a challenge to balance the sheets, it means that something is wrong. When defining the assets and liabilities of the business becomes challenging to identify, then you must seek the help of a professional accountant. Not only can they help you find balance in the sheets, but they can also help you identify what you should consider as assets and liabilities when you list them down in the books.
What do Assets Mean?
Assets are items that have become a property of the business. They can be both tangible and intangible. The tangible ones include all the items that can be seen as part of the business operations including the office tables, chairs, printers, machinery and the like. On the other hand, intangible items are those that you cannot see or touch but you know is part of the business like patents, investments, and even good customer relations. Assets are called such because they can be used to help the business gain more today and in the future.
What do Business Liabilities Mean?
Liabilities of the business include all the items that you use to make the product or provide the service that is yet to be fully paid. Whether it is a loan you took out from the bank or the salary of your employees that you are loaning for, they are considered business liabilities for they are not yet paid. Their cost will then be added to the company expenses, making you lose profit within a specified period or until the loan made has been fully paid.
How do You put Current Assets and Liabilities on Record?
Do you have assets that can be converted to cash within the fiscal year? These are the assets that will fall under current assets. These assets could include all forms of cash or cash equivalents, inventory, account receivables as well as other company liquid assets that can easily be converted to cash. Current assets play an important role in keeping the company afloat. They help ensure that the payables and dues are paid on time. Such assets help maintain the day-to-day operation of the smooth business sailing.
Current liabilities, on the other hand, are the bills that need to be paid every month, does that require a monthly or quarterly payment as well as short-term debts that need to be settled within the fiscal year. Every business must have working capital. Accountants suggest that companies have this fund to keep the day-to-day operation going without the need to incur debt.
The challenge to every business owner is to keep their assets higher and their liabilities to a minimum. Working closely with an accountant you trust will help your business achieve a positive working capital, allowing your business to be as efficient as you want it to be.
The auditing process conducted on a business institution looks into possible errors that may have been entered in the books. When accounting professionals find the mistakes, they immediately work to correct the data to avoid the wrong data from being used further into the recording. It may result in an unbalanced book or worse to make the financial statements unreliable. Mistakes that may be due to the wrong input of data or a typing error must be corrected immediately. But experts say that correcting the data is as important as understanding how it was committed.
There is no doubt that a seemingly simple accounting error impacts the overall financial status of the company. The cash flow, capital, profit and even the tax that your business ought to pay are affected by simple errors inputting the data in the system. A variety of things may cause the errors, but here is a list of the most common accounting errors committed by businesses.
· Imbalance in the Financial Statement
There are two types of balances that most companies have to keep a record of – the revenue account and the expense account. Both of which contains a list of when the money came into the company’s account and when it left. It practically shows business owners the cash flow. The revenue account must contain the cash inflow showing the actual credit balance of the company. On the other hand, the expense account must incur the debit balances. When the wrong data is put in the wrong balance sheet, the differences may result in an error altogether.
· Input of Data in the Wrong Year
Each year, the accountants tally the books in hope to achieve a balance in the ins and outs of cash to show whether the company earned or not. More than the simple recording of expenses, the books also ensure potential investors that they are putting their money on something useful. However, most businesses fail to keep their book closed for the fiscal year. When the books have been closed, remember not to go back to change any of the details. It is best to keep it that way. Unless it is a transaction that needs to be input in the records, it is best to have a professional accountant do it for you.
· Opting not to Include Particular Expenses or Details
Omitting data from the records may seem like nothing, but it can affect bookkeeping altogether. When you choose to delete data that should have been recorded, it can be the primary reason why your sheets are not balanced.
What’s the best way to keep you from committing these mistakes? Assign a professional accountant to take care of your business accounts. They are accurate, and they can make the process less consuming for you. Having the right audit firm will save you time and money in the long run, not to mention keeping your business from having an untrue financial statement.
Hiring a professional accountant may be one of the best decisions you could ever do for your business. Not only does it mean professionalizing the books, but it means putting your finances on the right track. When it comes to business, it is essential to know the flow of money to ensure that your business is earning as much as you want it to. After all, managing your own business is not a walk in the park. It requires skills, time and focus. With an accountant working with you, your business is in good hands.
But finding the right accountant can be a challenge too. Don’t fret. These tips will help you find the right person or team for the job:
· Tip 1: Ask them if they are Available
With a shortlist of accountants on hand, it is relatively easy to pick one. The first thing to ask is whether they are available to do the work for you. When they say that they are, the next thing to ask is how often they are available to consult with you regarding your financial concerns for the business. Their available will allow you to open doors for communication – the basic foundation of a good relationship with an accountant. When you agree with their availability, then you are off to a good start.
· Tip 2: Talk About Their Rates
Assuming that they already know how much budget that you have to pay for their services won’t do you any good. The best way to hire an accountant is to be straightforward with them, especially when it comes to your budget. Some accountants might bill you for every service that they provide. Others will charge you for the period that they have worked for you. Choose to work with someone whose rates fit your budget.
· Tip 3: Ask your Friends About it
Asking for referrals is one of the most effective ways to hire professionals for your business. These referrals come from satisfied clients, which means that the person they are recommending for the job has provided them with satisfactory work. Don’t be afraid to ask personal and professional connections for referrals. After all, a good word put in for an accountant by a client means a lot. They might be so good.
Looking for an experienced, reputable and affordable accountant for your business may not be that easy. But with these tips in mind, you know you can never go wrong.
This is one of the many questions that a starting business owner would ask. Although most of them knows the answer to it, some would leave the thought of thinking they could do their accounting without professional help. In the beginning, maybe they could. But as the company progresses and the business expands, it may become difficult to keep up with all the work that needs to be done.
But how do you know that it is time to hire an accounting firm? When should you seriously consider it? Here are some scenarios you might find yourself in. During these times, it is best to consider talking with a firm to get things done and get it done right.
· When you Need to Focus on the Business
Keeping the business books updated is easy to manage when you have nothing else to do. But when you need to take care of the delivery, the operations as well as the marketing of the business, taking care of the books can be stressful. Delegate the task to those who know it best. The accounting firm will be able to take care of all the responsibilities, giving you the opportunity to focus on the other things that need your expert attention.
· When you Want to Save on Costs
Hiring an accounting firm may seem like a considerable investment, but it might save you more in the long run. When you hire a person who will look into your business finances, their shortcomings might get in the way. With an accounting firm working to manage your business books, you are assured that they work as a team. With a team of experts working for your business, you are guaranteed that everything will be taken care of.
· When you Know Very Little, but you Want to Learn More
If accounting is not your expertise, then hiring an accounting firm will help you learn more about what your business needs to further its expansion. When you need to ask questions concerning the finances of your company, the members of the accounting firm will be there to answer them. Not only do you get instant answers, but you learn more from the experts in the long run. Isn’t that indeed beneficial?
Is it time to hire an accounting firm yet? Yes, yesterday was the best time. Only a team of professional accountants will be able to help you sort your concerns, keep the book updated and show you the many ways you can save for your business.
Every business owner keeps his balance sheet. This is a business document that allows them to see the assets and liabilities of the company and help keep everything on the right track. It is essential for this balance sheet actually to find balance at any given time. The list of assets and liabilities should come to a tally to ensure that the business finances are on track. A simple unbalance in the balance sheet should be a cause for alarm. Even when the balance is tipped a little, it could still mean that the problem may be worse than expected.
It could affect the way you make decisions for the company. It could also cause problems in the profitability of the company. So how do you keep the balance sheet balanced? Here are some tips from the accounting experts in Edmonton.
Tip 1: Keep your Data in Place and Updated
More often than not, misplaced data often results in an unbalance in the books. Remember to keep your data in place and keep it updated. Never let months pass without you updating the books. Also, when you check on the balance sheet, remember to be specific about the balance that you want. If you're going to check if there is balance in the books for this month, then include all the particular expenses and profit only for this month. If you add the list of expenditures of last month, then it could result in an unbalance. To avoid misplaced data due to human error, it is best to have a certified accountant to keep the balance sheet and its data accurate. They can help conduct an audit to look for data manipulation and other discrepancies that may cause an unbalanced sheet.
Tip 2: Check for Incorrect Data Entry
Human error in accounting can be very high, especially when the staff is not trained right. Business transactions that are entered wrongly could mean a huge difference between business assets and liabilities. Such mistakes include the input of incorrect numbers or inputting only the credit or the debit side of the transaction. Ignoring the error and keeping it unreported could make the problem even worse. To fix the issues or prevent it from happening, it is best to have an accountant train your staff on how to do data entry. Let them cross-check your financial records too to ensure that all the data are in place.
Tip 3: Go for Equity Calculations Often
Whether it is a change in the inventory system or the increase in unpaid balances that is making it difficult to reach a balance, it is always best to have a professional accountant help you do it. Remember that the balance sheet won’t be balanced unless it shows you the difference between the company’s assets and liabilities. Therefore, minor errors on such could lead to significant damages.
The secret to keeping the sheet balanced is to have a professional help you with it. Their guidance can save you from losing all the vital data that could mean the difference between your business success or failure.