Virtual stores are the emerging trend, as they are an easy way to do business without the need to have a physical store. With a virtual shop, one can reach out to a broad audience beyond the location of the store. However, while chalking out a plan to operate an e-commerce business and sell online, one needs to adhere to tax compliance in Edmonton with the various provincial and territorial regulations.
These regulations enforce even though the store does not have a physical address in other provinces in which it sells. Furthermore, the online business owner needs to be aware of the rules and regulations associated with distributing products in different parts of Canada. Various provisions may apply in regions for e-Commerce, online sales contracts, or other online sale transactions and advertising.
Here is a brief rundown of the points to keep in mind while running an e-Commerce business in Edmonton.
Additional Provincial Registration
If you do business with clients outside your registered province, it's a must to register your business in their land or territory of residence as well.
Like any other physically existing business, an e-commerce business needs to be incorporated to protect the shareholder's assets from facing any liabilities. For this, it is recommended to consult a professional entity regarding the structure and incorporation, federally or provincially.
e-Commerce Sales Tax
One of the significant challenges e-Commerce sellers face is understanding of tax compliance in Edmonton for sales tax regulations. To understand the concept of sales taxes, we need first to know what they are. In layman language, sales taxes are the additional amounts you collect from your customer and remit them to the government.
It is not an additional tax on your income, and it is not a charge either; it is something that could be more of a temporary possession which is returned to the government eventually.
Sales Tax Implications for eCommerce Sellers
Similar to other countries, Canada imposes a sales tax on products shipped to Canadian consumers. Sales taxes levied on a federal and provincial level. It is an amalgamation of state and provincial tax jurisdictions.
Some provinces have harmonized their sales taxes in compliance with federal sales taxes (hence, the name HST – Harmonized Sales Taxes).
In a nutshell, an e-Commerce company will need to register to collect sales taxes from Canadian buyers if all of the following are true:
Canadian Income Tax Implications for e-Commerce Sellers
In general, your business is considered resident for tax purposes in Canada if:
Additionally, if your selling earns income from business carried in Canada, you will have to file a Canadian income tax return regardless if you are a small business supplier or not.
Canadian Controlled Private Corporations (CCPC) is subjected to a low of 14 -17% rate on the first $500,000 income.
The combined federal and provincial tax rates for non-resident companies vary from 25-31% regardless of the amount of income.
Most tax treaties absolve companies from paying taxes if the corporation does not have a permanent establishment (i.e., a fixed place of business) in Canada.
Necessary Tax Returns
If you are a non-Canadian corporation that carried business in Canada, you will be required to file a T2 tax return along with Schedules 91 and 97. If you are claiming protection under one of the treaties, you will need to specify sections of the agreement on those schedules.
Non-resident sole proprietorships will have to apply for an Individual Tax Number (ITN) to file their business income. Forms T1 and T215 will need to be completed and submitted to the CRA by June 15th of every year.
Canada – U.S. Tax Treaty
Those e-Commerce sellers who don't have a permanent establishment in Canada or the U.S. are subject to the protection by the U.S. – Canada Tax Treaty.
Canadian e-Commerce corporations selling in the U.S. with no permanent establishments fill forms 1120-F and 8833. Corporations require an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) to file their returns.
On the north side of the border, U.S. e-Commerce corporations selling in Canada will fill forms T2 and Schedules 91 and 97. A corporation will need a Business Number (BN) to file their tax returns with the Canada Revenue Agency (CRA).
For selling items to an out-of-province consumer, it is critical to understand how and when to charge sales taxes (GST, HST, and PST). In an ideal scenario, an e-Commerce platform should be set up in a way that automatically adds the precise amount of tax. Make sure to test the system, ensure that the system is up-to-date and verify that it is accurately set up. Business owners who sell online in other countries are essentially operating a multinational company. The more your company gets involved in the land of destination, the higher tax obligations and complexities arise.
What we have given here describes basic rules and considerations of e-Commerce taxation for Canadian and non-Canadian sellers. Your situation can be different, so consult with the experts to meet tax compliance in Edmonton. Approaching a competent tax professional of your choice is wise.
If you are operating an e-commerce business in Edmonton, run it under the right business structure. Make sure to know your sales and income tax obligations within and outside the country. Also, utilization of technology should stay on top of your business checklist.
We recommend you rely on knowledge, trusted advisors, and your primary business acumen to navigate through tax compliance challenges.
Book a free consultation today to know more about your way with taxes and their impact on your business.
When it comes to operating a restaurant business, there are a lot of factors to consider to keep the business running smoothly.
Managing your restaurant accounts can be one of the hardest parts of running a restaurant as well as the deciding factor between success and failure. From creating cash-flow projections to applying for loans, managing the financial aspect of your restaurant can sometimes feel like a juggling act.
When you are starting a new business or prepping your taxes for the coming year, hiring an accounting service may be on your mind. Even the most business-savvy restaurateur could require an accountant to help handle the ins and outs of his restaurant’s finances.
If you are skeptical of the importance of accounting for your restaurant, this overview will help you understand its benefits for your business to thrive. Read along and find out how!
Ensures Compliance with State and Federal Directives
With constant law changes regarding sick leave, termination of employment, new hire reporting, health insurance, and more, it is nearly impossible to keep up with the federal and state laws for restaurants. ATS Accounting provides back office support in addition to offering payroll services. The company provides accounting and human resources management that offers clients a full suite of services that often intersect.
A full-service accounting firm understands the state rules and regulations regarding payroll services, tax-breaks, insurance, etc. They are also aware of how the latest amendments affect restaurant costs. Assessing for fines and fees due to recent law amendments is one less worry that restaurants need stress about when they outsource their accounting to a restaurant accounting firm.
Creates Cash Flow Projections
A cash-flow projection is a formula that estimates your budgeted revenue after expenses (total revenue – total expenses = projected cash-flow). For new restaurant owners trying to master accounting, creating cash-flow projections can be challenging. Still, this is a necessary part of financial planning and will aid you to keep your restaurant on a budget.
Helps in Processing Payroll Transactions
Your employees are the engines of your restaurant; therefore, it's imperative that you keep them happy and paid. When it comes to payroll services in Edmonton, there's more to consider than just wages and time tracking. You should also ponder over deductions, benefits, overtime payments, payroll taxes, and more.
Applicable deductions might include income tax, your share of your employees' contribution to the Canada Pension Plan, and employment insurance. To accurately calculate each employee's income tax deductions, require all workers to provide their Social Insurance Numbers (SIN), and fill out a separate Personal Tax Credits Return Form, or TD1.
Though paying employees may seem like a simple task, but it is more complicated than you might think. Some of the details you'll need to iron out include:
It can be a lot to keep up with, which is why many restaurant owners outsource these tasks to an accounting firm that offers restaurant bookkeeping services, including payroll services management.
Maintains Accuracy in Holding Accounting Records
It is critical to maintaining up-to-date financial records. Not only it helps monitor how much revenue is flowing in and out, but it also helps your restaurant survive should you ever face a CRA audit. If you aren’t experienced with managing the logs, consider seeking help from an accounting firm. Additionally, most accounting firms also keep track of the inventory, manage payroll services, and run sales reports.
Provides Sound Advice for Your Business
Many restaurateurs have backgrounds in the food industry but may not have experience in finance. It is wise for such entrepreneurs to outsource their accounting tasks to professionals.
Hiring an accounting service in Edmonton is often about bringing a new perspective, one with years of experience that suggests viable paths to business growth. An accounting service helps you plan your target goals and look out for financial tricks that would reduce your expenses. Your accountant offers insurance advice, find ways to trim costs without lessening quality, help you evaluate menu prices, and even research your business potential for expansion.
As you and your employees work hard in the day-to-day aspects of the business, your restaurant accountant can take a step back and see the forest for the trees.
Gives Tax Advice and Help in Auditing
Many restaurant owners approach an accountant when it's the tax time, and indeed, that's a service your restaurant can consider an accounting service for. Not only your accountant makes sure your restaurant is in compliance with federal and state tax laws but helps you plan throughout the year so that your deductibles go smoothly by the time the tax season approaches.
If a restaurant is audited, whether for taxes or during the bank loan process, restaurant accounting services also assure the auditor that the business’ financial documents are precise and up-to-date.
By understanding what an accounting firm does – and knowing what to look for in a restaurant accountant specifically, you can hire a great fit for your business and set your restaurant up for success!
ATS Accounting has licensed agents who work exclusively with all business owners. Our team of dedicated agents knows the specific risks restaurant owners may face and help ensure your business is protected with the right policies and coverage limits.
Ready to get started? Click here and get in touch with us today!
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.
If you are a newbie in the city or just entering the workforce, you may be overwhelmed by the feeling of filing a tax return and whether it is necessary. When it’s that time of the year again when Albertans roll up their sleeves, dig out old receipts, and financial documents from the past year and fill out their tax income forms.
For those who end up with a rebate, the process could be rewarding. Whether you end up owing the government or the government owes you, tax time can be tricky for many.
Most income tax and benefit returns are due on or before 30 April 2018.
We can help you with your tax file and accounting hues. Let us explore the different facets of accounting and tax returns before filing your taxes in Alberta, Edmonton.
You must file a personal tax if:- You owe tax.
- You are self-employed and have pension plan premiums due. Also, you are required to file if you are paying employment insurance premiums on your self-employment earnings.
- You and your partner wish to split your pension income.
- You are participating in the Home Buyer’s Plan or Lifelong Learning Plan with repayments due.
- You disposed of the capital property. If you sold your home, you must file a tax return even if you don't wish to pay capital gains tax on the sale (principal residence exemption).
- Whether you are 9 or 90, age does not influence your requirement to file a personal tax.
- Students are not exempted from filing either. If your 21-year-old child is an entrepreneur who makes over $3,500 (after expenses) running a small business, they must submit a personal tax even if they're still in school.
While filing your taxes is a yearly tradition, the government makes few amendments to tweak its tax policy. Here are a few things the Alberta government has altered for 2016:
- Increased Alberta non-refundable tax credits to counterbalance inflation
- Lower-income families with children under 18 years of age qualify to receive the Alberta child benefit as of July 2016.
- Individual income tax rates have changed for taxable income over $125,000, $150,000, $200,000, and $300,000.
- The Alberta overseas employment tax credit has been obliterated.
- The rate used to calculate dividend tax credit for non-eligible dividends has reformed.
How to File Your Taxes?
You can fill your tax form online, on paper, or by phone.
Stages of Filing a Personal Tax and Benefit Return
Stage 1- Collect all your information and relevant documents that display your income, and that support any deductions and accounting credits you plan to claim. To fill out your return, you need all your tax information slips that show your income. You should have all your slips and receipts by the end of February. Gather all the receipts or records you will need to support any deductions, credits, amounts, or expenses you will be claiming.
Stage 2- Select the software you wish to use to fill out your details or get the general income tax and benefit package.. For ex- NETFILE is a certified tax preparation software that offers you convenient and secure way to do your taxes online.
Stage 3- Make sure all your details are up to date. Changes to your personal information such as your marital status, the number of children you have, your banking information, and your address directly affect your benefits and accounting payments. If there have been any alterations in any of the aforementioned, let the Canada Revenue Agency (CRA) know as soon as possible to ensure you get the entitled paybacks and returns.
Stage 4- Report the income you have received in the year from all sources, both inside and outside Canada. Find instructions on where to report in Edmonton an amount on the back of your information records.
Stage 5- Calculate the deductions, tax credits, and benefits you can claim. This information is required so that you can claim on your return to reduce the amount of tax you have to pay. This information can also be found on your tax return or a related tax form in Edmonton. If the information is too overwhelming at this step, it is always wise to seek professional help and let our team of experts resolve your queries.
Stage 6- Send your file to the Canada Revenue Agency. With several ways to send your tax file to the CRA, you can file it online using NETFILE-certified software or through an EFILE service provider, such as a tax preparer. ATS accounting helps in preparing and e-filing your individual, corporate, and estate tax returns at the local, state, and national levels.
Stage 7- If you filed your taxes late, your records must be secured for six years from the date the tax was filed. If there are any claimed expenses, deductions or accounting credits, make sure you store all your receipts and related documents in case the CRA asks to see them.
How can I avail maximum tax returns? When do I get the refund?
You can avail maximum reimbursements in the following ways:
- Keep your transit passes
- Use your tuition credits
- Claim your student loan interest
- Claim medical expenses
- Use the dividend tax credit
- Claim utilities such as cell phone and internet expenses
- Claim your work expenses such as conveyance, uniform, costs incurred on purchasing work related items
If you file your return online and choose direct deposit, you get your refund in as little as eight business days. If you send a paper return, it generally takes eight weeks to issue your notice of assessment and any refund.
Do You Need Help with Your Taxes?
With so many steps and procedures involved, filing taxes can be quite daunting. It is one activity; a person must experience to get their hands-on with managing their finances and accounting.
Managing all your tax deadlines, including payroll, corporate, sales tax, and more, can be a big job that diverts you from other things you have to do to run your business. We take pride in staying on top of these deadlines for our clients, so you don’t have to stress about them. We prepare and file the tax returns that are required for your business. We’ll look hard for every deduction possible, discuss with you your options, and perform your tax compliance work accurately and on time.
Are you still indecisive? We have made it risk-free for you. Now you can book a consultation for counselling, controller, taxes, and accounting related queries.
Accounting is a comprehensive process that requires you to maintain a proper track record of all the financial transactions that take place in your business. This process is undertaken in order to keep a track of the profits made by the business, to decide what future financial decisions have to be made and to comply with the tax laws. Since this process of record keeping has multiple transactions, mistakes tend to happen. Some mistakes can be costly and you may even end up paying the wrong amount of tax. Therefore, to avoid such discrepancies, a financial audit is created.
Types of Financial Audit
A financial audit can be defined as the process of analyzing your bookkeeping records to verify if the information provided is valid with regards to the statutory compliance. This process is conducted by professionals and is thoroughly done to find any minute mismatch in the bookkeeping. Before you move on to understand more about the purpose of conducting a financial audit, let us understand the different types of the financial audit that exist in Canada.
1. Statutory Audit
A statutory audit is conducted for a business by an external auditor. A statutory audit is mandatory under the law for a company that earns a certain revenue. The need for a statutory audit is mainly in large firms where the ownership of the company and the financial affairs handling is separate. A statutory audit confirms if proper regulations are being followed not only for the government but also to the higher authorities within the company.
2. Operational Audit
An operational audit is also known as an internal audit. It is an initiative taken by the business itself to monitor if their financial records are proper and compliant. This audit is conducted by the employees of the company. The auditor is decided by the board of directors.
3. Public Sector Audit
Public sector audit, as the name suggests, is an audit that is specifically conducted for business and institutes that are owned by the government. This audit is conducted by the auditor general to ensure that these public companies are following a proper financial affair.
4. Forensic Audit
Forensic audits are external audits with legal implications. These audits are conducted by the legal authorities when a business is supposedly indulging malpractices. Situations that generally cause a forensic audit include money laundering, tax evasion, insurance claim fraud, accounting negligence such as entering incorrect entries, etc.
Types of Auditors
Since an audit is an in-depth analysis of your financial statements, it is essential that an expert performs the task. There are three types of auditors you will come across when performing an audit.
1. Internal Auditor
An internal auditor is an experienced accountant assigned from within the company to perform the task of analyzing the financial records internally from time to time. Internal audits help a business to ensure that their financial records are updated and error-free.
2. Independent Auditor
An independent auditor is also known as an external auditor. These are professionals who only work as auditors for different organizations. They conduct the financial audit for different clients with an unbiased opinion.
3. Government Auditor
Government auditors are of two types, a general government auditor and a forensic auditor. A general government auditor performs an external audit for businesses to identify if the company is following all the tax regulations. Forensic auditor, on the other hand, performs an external audit in order to identify if the company is involved in any financial malpractice.
Purpose of Financial Audits
1. Identification of Miscalculation
A company has several transactions to record every day. Your accountant may take care of making a note of every single transaction. However, there are times when you may miss out on a receipt and end up not adding the record to your transaction list at all. When such miscalculation takes place, the business does not get a clear idea of the profit or loss it is making. With the help of a financial audit, such mistakes are caught and rectified.
2. Prevention of Fraudulent Practices
A business owner never handles their own books of accounts. Either the in-house team of accountants manages it, or an accounting agency to whom the process of accounting has been outsourced. Since the owner does not record every transaction that takes place in the business, there are chances that the owner may get fooled by the person handling the accounts. In the end, if a fraud is committed, the business owner will be penalized. To avoid such situations from happening, internal financial audits are conducted at least once a year.
3. Realization of Company’s Worth
There is a huge difference between a financial audit and general bookkeeping. In bookkeeping, you record the monetary transactions that take place in your business. A financial audit, on the other hand, does the complete analysis of your existing records. Regular recording of transactions does not give you significant information about your business. A financial audit gives you details of how your business is performing, and the report generated works as a good credit rating for your prospective investors.
4. Compliance of Taxes
A financial audit is done with the idea to catch discrepancies that were not noticed the first time. One major discrepancy that businesses can end up making is not complying with the tax rules unknowingly. You may miss out on something forgetfully, but the CRA won’t consider it to be a small mistake. So having a financial audit helps you to double check if you have filed your taxes properly. Sometimes, it also helps you to claim some tax deductions you may have not noticed before.
Financial audits do the job of rectifying some serious mistakes. Not conducting an audit could be the reason why you will end up being flagged by the CRA for the wrong reasons. So do not wait for a notice from the CRA for an audit and take the assistance of an experienced accountant for error-free bookkeeping process.
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:
Tax filing season becomes stressful for everyone. Once you file your tax returns, you breathe easy and feel relaxed. But sometimes the relaxation doesn’t last for long when you receive a notice of an audit from the Canada Revenue Agency (CRA). Often business owners go in a panic mode as an audit is not something they want to go through. But an audit is not something to be scared of as it is just a simple process that includes some basic procedures that tax accountants in Edmonton can take care of.
Tax audits conducted by the CRA are generally of three main types. These audit types include:
Audits In-OfficeWhen you receive an audit notice, you will be informed about the type of audit. In an in-office tax audit, you will be asked to visit the local CRA office. This type of audit is conducted by the CRA when they want you to be present to justify your tax documents in detail. When you are called for an in-office audit, make sure you carry all the tax filing documents along with you.
Audits by MailAudits of local and small businesses are a minor task for the CRA and hence a majority of them are conducted through the mail. In a mail audit, you receive a notice about the audit along with a list of documents needed by the CRA to justify the returns filed by you. You can simply mail the documents needed by the CRA and the matter can get resolved.
Field AuditsField audits take place at your business premises. In such an audit, you first receive a notice and then a CRA officer visits your premises for a detailed investigation of your financial documents. Such audits generally take place for businesses that have too many suspicious transactions.
After an Audit is CompletedAfter the audit process is completed, the next step that takes place is the place where the CRA gives a decision based on your documents. This decision-making process includes:
After the CRA scrutinizes your tax returns, the agency verifies that your documents are complete and as per the regulations. Once your documents are verified, you need to sign the report and the returns can be filed.
If there are certain details that were missing initially in your report, the CRA will ask you to make the necessary changes and alterations in your returns and file them.
If in case the CRA found a major discrepancy but you do not agree with the CRA, you can file an appeal for reconsideration.
Though an official audit is a process initiated on discrepancy suspicions, it is not necessary that there will be major issues to worry about. Sometimes an audit can also take place for minor mistakes. So next time you get an audit notice, do not worry and simply take the assistance of trusted tax accountants in Edmonton.
Tax planning is one process that you prepare for from the very beginning of a financial year. The preparation starts from the time when you save the very first receipt of the transaction that takes place in your business. Saving every receipt and other business financial statements is necessary when paying your taxes. However, the common question on the minds of many is that for how long you keep your business tax returns records. Let us find that out through this article.
What Business Returns to Keep?For the taxation process of a business, the Canadian Revenue Agency (CRA) has defined the need for the following document:
There are situations where you might have to hold on to your business tax returns for longer. One such situation is the tax objection appeal. A tax objection appeal is filed by a person when they think that the CRA was unjust with the documented facts and applied a wrong tax law on them. In case you have filed for such an appeal, it is recommended that you hold onto your business tax returns until the appeal and the matter which is raised is cleared.
Another important aspect to keep in mind is that disposing your business tax returns before six years is not a decision to take on your own. As per the CRA, if you wish to dispose your records before six years, you need to get a permission of the tax service director. Also, if you dispose them before six years without a permission, then you can be prosecuted by the CRA. So if you need more clarity on how to go about the process, get in touch with our tax experts.
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.
As a small business owner, you are passionate about running your business and concentrating on the tasks you love doing. But there are certain business functions that you may need an expert to help you out. Business bookkeeping is one such function that needs a professional help. This is because inaccurate bookkeeping or calculative mistakes could lead to huge losses. Just imagine, you end up paying less tax because you missed some financial transaction. Once the Canadian Revenue Agency (CRA) identifies this, they will charge you a penalty. Hence, bookkeepers are hired to lighten the load on small business owners and prevent them from making costly mistakes.
Having an experienced and qualified bookkeeper on hand to manage the paperwork involved in running your small business allows you to free up your time and focus on revenue-generating activities. Not only can bookkeepers do your paperwork a lot faster and more accurately, but they are also up-to-date with all of the latest laws and regulations. Small businesses owners should consider hiring a bookkeeper for the following tasks as well.
Manage Financial DataA bookkeeper records all the financial transaa ctions in your accounting system. An updated balance sheet will help you know the financial position of your company. At the same time, it helps you to take a future course of action. For instance, if you notice that there’s a dip in the profit figure compared to the last year’s profit figure during the same time of the year, then you make amends to your marketing strategies or try to reduce costs to improve the current year’s revenue. Also, managing your financial data helps you in other processes like filing tax returns, increasing the payment of your employees, etc.
Manage Cash FlowSmall businesses are in a transition phase that needs more attention in running the business than accounting inflow and outflow of cash. A bookkeeper in Edmonton manages all of the cash flow data and ensures that the company does not face a liquidity crisis. As and when the payments are due, the accountant will raise an invoice. Accordingly, they will get in touch with the vendors and clear the expenses before the due date. Some responsibilities of a bookkeeper in Edmonton include:
Offer Payroll AssistanceSome bookkeepers offer payroll assistance to small business owners. They reduce the time spent on administration through developing and implementing a computerized payroll system that will facilitate timely payments and help in preparation of tax returns.
Offer Financial Consultancy
There is nothing more important than getting your money’s worth. Bookkeepers also provide financial advice that helps you take right financial decisions. Since bookkeepers have up to date knowledge about the law, they can translate financial regulations and assist you in legal decisions as well.
When you know where your money is going, you can freely focus on the other things where your expertise is needed more. Consult an experienced bookkeeper in Edmonton who can be trusted to undertake your small business bookkeeping.
Accounting is one of the things that everyone needs to survive in life, but its one that is often overlooked. Luckily for those who don’t have the gift of math skills, there are numerous accounting firms they can hire to help them with their business accounting needs. While it is true that accounting plays a significant role in the world of business, very few people recognize its importance in our regular daily lives. What is accounting good for?
Reconciliation of Charges
Each month, your bills come to your doorstep reminding you to pay off what you owe the lender company. Whether it is paying for the goods or paying for services that they provide, it is essential to be sure that you are only paying them for what is right. It is part of basic accounting to know whether or not you’ve been charged too much or not. When was the last time you checked your bank account or perhaps even the electric bill? Did you notice any difference in the cost of what you’ve been charged with?
The role of the accountant is to make sure that the bank balances, as well as the flow of money in the company, are reconciled. The cost of how much you spend in a month as well as the amount of income that comes in. Keeping the household expenses together is much like maintaining the costs incurred in the business. Perhaps the only difference is that the extra income in the household goes to savings while the excess is business is considered profit.
What happens when you spend more than what you earn? Doing the math is simple. When you do spend more than what you make, you end up with debt. Sadly, when debt is not paid, it earns interest, and the debt you owe only goes higher. Overspending can sometimes be uncontrollable in the household, especially those with kids. However, overspending today is not going to help save for tomorrow.
Accountants emphasize the need to only spend within your means. Proper budgeting is also part of basic accounting. Knowing where to put your money and determining how much needs to be set aside for the bills should be what every household should learn. To prevent debt, it is best to learn to budget.
Planning for the Future
At a time when the economy seems unstable, it is common for people to worry about their future. The desire to have enough funds to send the kids through college, to buy that dream home and to have enough money to go on vacation will always be there. The first step is careful planning for your finances. The ultimate goal of everyone is to have a financially healthy future. The only way to do it is to ask an accountant on how it can be done.
Accountants will not only help you manage your finances, but they could give you advice on making investments that could bring financial stability in the future. Savings, investments, debt control are among the other things that can help financially plan for your future.
Accounting is a part of daily life. And unless you want to have financial problems in the future, it is best to learn the basics of it from only the best.
Have you been advised that you’d be better off incorporating your business? When you started your small business, you have always imagined it to be a big one. Through the years of operation, it has grown its consumers in number and its profit higher. Is it time to incorporate your business? What does it mean to have a corporation compared to sole proprietorship of the business?
Business progress always brings about good news. It means that more customers are happy and satisfied with the product or services that you provide. But as the business expands, it is essential to consider some changes to put it in a better position. If incorporation is one of its options, it is best to learn more about it and how it could be good for the business.
Incorporation means making the business a corporate entity. It is now a separate entity from its owners. When incorporated, the business is no longer under sole proprietorship nor is it owned by a partnership. And because incorporating a company is a big step, here are some of the advantages that you can expect to enjoy.
Advantages of Business Incorporation
Limitation in Liability
Running a business comes with a list of responsibilities, and sole proprietorship primarily gives most of it to you. The liability of the business is your responsibility. But when you decide to incorporate it, you are running the business as a corporation, with limited liability on your shoulders. When the business is incorporated, you automatically become one of its shareholders. The best part of it all is that you are not liable to pay off any debt as a shareholder. Nobody can sue you for non-payment of debt as the business is considered a separate entity from you.
Better health services for employees
A business that is incorporated can offer its employees with private healthcare services and deduct a part of its payment on behalf of the employees. More importantly, as a corporation, the business can offer more benefits to the employees and make it tax-free too. The extra health care services for employees will surely give them more reason to stay and work with the company – to help it grow and become more stable for the future to come.
Business operations can entail a lot of costs. From the salary of employees to the overhead expenses including the electricity and water services. And as the business grows, the value of operations also increases. When you remain to be a sole proprietor, all the stress of raising the money is on your shoulders. But as a corporation, there is a likelihood of an increase in capital coming from its shareholders. The shares will help finance the business, not to mention as a more straightforward way to raise the share capital that you need for business.
Is incorporation of business the best option for you? It depends on the nature of your business and the industry that you are in. Each situation is different. To make the best decision, consult with a reliable accounting firm. They can help you get a complete understanding of the nature of your business and the value that it comes with.
How much is the market value of your business? This does not depend on how much you value your business. Instead, it is about determining how much your business is worth if you were to sell it. Business valuation is one of the most effective ways to assess business worth. If you were to decide to sell it or merge it with another business, it is best to know how much it is valued for. Accounting services in Edmonton will be able to help you determine the best price for your business.
Methods for Business Valuation
This method looks into the possible cash flow that your business will have in the future based on the cash flow that it has at the moment. A steady business cash flow means higher profit in the future. Not only does it help determine the number of people who see value in the products or services that you offer, but it translates this so-called "value" to actual sales. Cash flow will also help determine how much your business will be worth in the future. Once potential buyers of your business have the idea of the actual cash flow that the company has, they can calculate the real-time value of the business. The accuracy of such a method of valuation depends on two factors: the actual cash flow value and the estimated value in the future.
The easiest and perhaps the simplest in all the methods of business valuation is looking into the hard assets the company has gained over its years of operation. You are looking into the resale value of machinery, equipment, and other devices that help keep the business operational. Although such type of valuation only seems into a part of what the company is worth. The real value of the company should also include its market value and its liabilities. Good accounting services will help you get the exact value of the company.
Comparison in the Industry
Another one of the most common processes focuses on how other businesses of the same nature is worth. The accountant will look into other companies that have been sold recently. Companies from the same industry are evaluated to compare how much they are worth considering the status of the company as a player in the industry. Industry conferences that are conducted annually can give business owners the idea of how much their business costs.
Most accounting services in Edmonton use these strategies to determine the value of a company. Knowing how each one looks into the value of your business will give you an idea of how you can conduct your business valuation better.
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.
Only businesses with a well-managed payroll system can genuinely find success. Whether it is a small-scale business that’s just starting up or a middle-sized one that’s thriving despite the competition, every business owner must see the value of having a well-maintained payroll system to help them solve for anything else concerning the business. When a method to pay off the employees of the company (whether there’s only one or less than ten), it takes your mind off worrying whether you did it right or not.
There are four types of payroll systems that you can choose to adapt for your business. The choice of whether you go for this or that is a matter of personal preference. However, expert accountants usually base their decision depending on a variety of factors including the size of the business and the number of its employees. Now, which of these systems should be your choice?
Payroll System Managed Internally
When you have less than ten employees, it would be best to have the payroll system managed internally. With the limited number of employees, you can easily keep track of the payments made including the deductions as well as the amount of the other social security benefits. The goal is to keep discrepancies to a minimum to none at all. When the payroll is managed internally, you don’t have to worry much about now knowing if everyone has been paid. You may hire an accountant to do it for you privately as a resource.
Payroll System Managed Professionally
This is the system when the bookkeeper or a certified public accountant is hired to look after the company’s payroll system. Not only do these professionals help you manage the system but they also look after the financial status of the company. They can ensure that all transactions involved in the business including bank withdrawals and deposits are managed well. This system is perfect for medium-scale to big companies.
An External Payroll Agency Manages the · Payroll System
This is the type of system when the company does not have hold of its payroll system. Instead, it is entirely managed by an external payroll system. The payroll company handles all the responsibilities that come with it including salary deposits and other deductions for the month. One of the best things about this type of payroll system is that it is handled with complete objectivity with very little to no discrepancies at all.
This is perhaps the most popular form of payroll system wherein the complete payroll list is input in a software. You only need to manage it from a portal. It is convenient because there is no need to solve anything. You have to make sure that everything is in the software and it will take care of the solving for you.
If you wish to learn more about how each system works and how it can benefit you, it is best to talk with a qualified accountant. Their professional opinion will help you make the right choice.
Are you looking at applying for a bank loan? When the start-up business becomes a struggle, it does not mean you should stop. Sometimes, you need to be creative in getting the money you need to keep the company running. Applying for a bank loan is one of the most common ways to get the business going. But how do you manage to get a loan approved for your business?
Taking on a loan from the bank is not easy. In fact, it comes with a lot of responsibilities that you need to be prepared for. The bank doesn’t easily give away their loans, even to those people who already have their start-up business up. The bank will be looking for ways you can grow the money to ensure that they get paid.
So how do you get loan approval from the bank? Here are six tips you can try:
Tip 1: Prepare a Business Plan for the Bank and Yourself
A business plan contains your concept of business as well as the focus points that you are working around in. The strategy of the business plan is to reassure that bank that you know where your business is heading. Not only does it highlight the operational program for the company but it also includes the executive strategy that affects every other decision you make for the business. Be as detailed as you can be. The bank will appreciate it and will lend you the money you need.
Tip 2: Make a Financial Plan Ready for Submission Too
The bank will ask you for a financial plan to ensure that you know what you’re going to do with the money. The details of the financial plan should be precise. When they give you the money that you need, how are you going to use it? How is it going to make the business plan work? The operational costs, administrative expenses as well as the revenue model should all be in that financial plan you are to prepare.
Tip 3: Only Apply for a Loan that you can Afford
The best way to not be approved for a loan is to apply for too much money. You should only apply for the amount that you can pay. Remember to always look at things from the perspective of the lender. The bank will look into your business plan, your financial plan as well as the application you submitted. From there, they will decide whether it is feasible for you to pay off the loan within the period they prescribe.
When it comes to getting a bank loan, you need to be more careful of your perspective. In managing your accounts as well as your application, it is best to consult with a trusted accounting firm in Edmonton. They will help sort things out for you.
When you started your business, you had to shell out a right amount of money to get everything in place. But that is not where the spending ends. Business operations don’s come for free. In fact, the cost of running a business can be quite overwhelming when you’re just starting out. The expenses usually cover the marketing, salary, overhead expenses, manufacturing, and the list goes on and on. Although each business comes with its own set of costs, there are everyday expenses that remain true for all.
Efficiency in the payment of these expenses is the key to genuinely gaining profit for the business. In fact, when you pay these bills on time, you are also able to reduce the amount of tax that you spend. Here is a list of the most common expenditures that a business owner must anticipate and prepare for.
a) Rent – most businesses set up in a tangible place, although selling online has become a popular option these days. Whether it is at home or a commercial space, you need to think of paying the rent and how much it will cost you monthly. Whether it is a leased property or a mortgaged one, you will need to consider the rent payment every month to ensure that it doesn’t pile up and become too big for you to pay off.
b) Administrative Costs – aside from the location cost that comes monthly, there are also other expenses that need to be considered like the cost of administrative personnel and utilities. The cost of the electricity, the phone, the internet as well as the salary of the people who help run the business while in the office should all be added to the overall costs. Whether you have a small or big business, these overhead expenses need to be considered in the monthly accounting.
c) Payroll and Benefits of Employees – these make a huge part of the business expense monthly. Apart from the usual payroll system that the company needs to follow to get the employees paid, there are also several types of benefits that every employee must get while working under you. All these could be overwhelmingly large, but they have to be paid to get the business going.
Every business aims to earn a profit and maximize it to help the company grow. Giving substantial attention to the management and payment of these expenses should help increase profit. Consult with a taxation and accounting expert to make sure that you are on the right track in handling your costs.
The primary goal of every business owner is to succeed. And to succeed in business means to be able to establish a steady flow of cash in their account. When they spend money to pay for the overhead expenses including the salary and benefits of their employees, they also expect money to come in to consider as profit. The risk of running a business will always be there. You can never tell when you will need immediate cash. Without immediate payment meant losses for the company.
The money you borrow from financial institutions or lenders could help you at the moment of need, but the interest they come with means expenses at your end. Is it possible to avoid such cashless moments? There are a number of things that can be used to keep yourself from being in that position when you don’t have a choice but to borrow money and pay for the interest. The first step is prevention. Work closely with a trusted accounting firm in Edmonton, and you don’t have to worry about finances. You know your business is in good hands.
Apart from that, here are three business decision mistakes you must avoid to keep your business thriving:
- Going for an extended credit period could mean more losses for the business. The length of time you want to go for to cover your loan payment may seem like you’re paying the creditors less each month. However, what most business owners fail to realize is that the interest rate they are paying for I much higher considering the length of time they took the loan for. If applying for credit to cover expenses could not be prevented, at the very least, make sure to pay it off at the shortest time possible.
- Putting off the updating of the books is one of the worst things that a business owner could do. Reputable accountants in Edmonton would always suggest that the books be updated with every transaction. The risk of forgetting to put in the books the expenses as well as the payments received will still be there. These mistakes may seem simple, but they could alter the books altogether. Recording all transactions when they happen should always be the goal.
- Paying off debt too early than the scheduled payment is not going to help at all. The interest that you’ll be paying for that credit is the same. Paying too first means not having the power to use the money and grow it in business. If your goal is to reach success, then you should be working hard to avoid obtaining debt at all.
When it comes to achieving a steady cash flow, business owners can’t help but take risks and sometimes commit mistakes in the process. The more important thing is always to try to avoid the mistakes to keep the business afloat.