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All businesses are looking for new ways to cut costs and increase their profit margin. Bookkeeping for small business especially can be a costly affair. Ever thought of outsourcing your bookkeeping service? Let’s take a look at why you should outsource your bookkeeping service.
Leverage your Time
Outsourcing your business’s bookkeeping operations frees up valuable time that can used towards focusing on your core area of expertise. Backend office functions can be a heavy distraction from the day-to-day running of operations and having your bookkeeping in-house can lead to a conflict of interests.
It will Save your Money
Bookkeeping for small business can become a financial burden. By outsourcing your bookkeeping operations, you save money on paying full-time or part-time wages and benefits to an employee. Further, you also save on lost productivity costs that come along with hiring employees onto the payroll. By outsourcing your bookkeeping, you only pay for what you need.The cost benefit analysis of outsourced accounting vs. in-house bookkeeping can save up to 40% in monthly costs.
Reduced Fraud with Improved Access to Top Systems
According to a study by the Association of Certified Fraud Examiner, the most common victims of fraud are privately owned small businesses with less than 100 employees, with an astounding median fraud amount of $147,000. This is because most small companies don’t have access to a controller or CFO who could look monitor the KPI and metrics and detect abnormal activity in the transactional and billing data. Accounting controls and external audits are responsible for 26% of the cases in the study for detecting or preventing fraud. With Outsourced accounting, small businesses can afford a CFO/controller who can look for fraud signs and implement proper fraud protection controls.
It will Raise your Accounting Standards
By outsourcing your accounting operations to a professional accounting firm, you’re effectively hiring a team of experts. Professional accountants know the tax codes and laws and will give you the accounting assistance and bookkeeping advice they are trained for. They work around the clock for your business by keeping up with the latest tax information, affording you full-time coverage for only part-time pay. Staffing options are considered and executed per task, so you will only have the most experienced and qualified individuals on your side.
Collaborative Accounting will Increase Productivity
Outsourcing your accounting operations affords you a team of people, all double-checking each other to ensure that all the right findings are being found. This also means that you can have specialized departments. With just one in-house accountant, it’s hard to hold departmental purchasing and spending individually accountable. This creates cracks for services to fall through. With a team of accountants, the manpower is right for separating all of the departments and really getting down to the nitty-gritty of each sector.
Finally, outsourcing your bookkeeping allows you to expand or cutback in the blink of an eye.Accounting firms can provide you with lists of options, giving you valuable feedback and suggestions that will raise your profits and help you achieve your goals. Outsourcing provides flexibility that in-house bookkeepers lack.
In addition to the benefits listed above, hiring a professional trained in giving bookkeeping advice and accounting assistance for small businesses can further optimize your performance. Get in touch with ATS Accounting, and equip yourself with specialized bookkeeping services.
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Tax is seen as a burden and a liability and people delay it till the very last moment. When you’re in a frenzy to fill your business and personal tax, you will make errors in your tax-filing. Don’t you? But, that’s alright. Mistakes happen. You need to take rearguard action by responding calmly to the situation by complying with the CRA guidelines. Here are some of the common tax issues faced by the people of Canada which can be fixed by resorting to these business tax solutions.
If you have filed your tax return and realize it has an error, do not file another tax return. Wait until you receive your notice of assessment before making any change. You are allowed to make changes to tax returns in any of the last 10 calendar years. Make changes online by visiting the Canada Revenue Agency's My Account page. Make changes by mail by completing Form T1-ADJ (T1 Adjustment Request), or prepare a signed letter that includes the years of the tax return to be corrected, your Social Insurance number, your address and your telephone number. Changes online typically take two weeks to be corrected, while changes by mail typically take eight weeks.
After filing your tax return, you can expect to receive a Notice of Assessment within a period of three to five weeks. If you discover that your tax return is not assessed as you filed it, you should take a close look at the change until you understand why the change was made. Speak to CRA to resolve your grievances. If you still disagree with your Notice of Assessment, you have two options at your disposal. Your first step should be to make a phone call to CRA and resolve the issue. If that doesn't work, then you may want to file a Notice of Objection. You can use Form T400A to file your objection, but it's not necessary. You can also file an objection by stating in a letter the facts, your reasons for objecting, and the change you're requesting. Address your letter to the chief of appeals at your local tax services office or taxation center. In filing your notice of assessment, it would be advisable for you to get it drafted from a tax professional who has knowledge of the Canadian tax law, CRA pronouncements and relevant case laws to make out a good case for you.
Even if applying these methods resolve your tax troubles, you must not rest easy. Consult the professional tax consultancy services of ATS Security, an accountant advisory and have business tax solutions at the end of your fingertips.
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There exist certain groups and individuals in Canada who believe they can lawfully refuse to pay taxes or file their tax returns. Then, there are others who lack a clear understanding of the Income Tax Act and other tax laws in Canada. Remember, paying your tax is a statutory obligation and you have to know the law before arriving at a tax decision. Your tax myths might eventually cost you dear. Why expose yourself to serious financial and legal problems owing to your negligence? Be aware. Here, let’s uncover some of the biggest myths about taxin Canada and have your tax myths debunked.
The often-cited 1950 Supreme Court decision concerning the Lord Nelson Hotel in Nova Scotia dealt with the issue of whether the federal government and a provincial government could delegate authority to each other on specific issues of labour and taxation. The Court did not address the issue of imposing direct taxes or their constitutionality.
The Income Tax Act and other laws provide a range of penalties for offences such as tax evasion, failure to pay taxes, failure to disclose income, or refusing to file a tax return. These penalties can include fines, third-party claims, seizures, and criminal prosecution. On the other hand, the Voluntary Disclosures Program (VDP) provides taxpayers with the opportunity to come forward and make a voluntary disclosure before they become aware of any compliance action being initiated against them. Taxpayers availing themselves of the VDP will have to pay the taxes owing, plus interest, but may avoid penalties or prosecution.
In such cases, the CRA may not yet have acted against an individual who did not comply with their obligation to file. Also, in some cases, an individual may not be required to file a tax return because they have no taxes owing due to source deductions or because they have no taxable income. However, failing to file a tax return also means an individual may be forfeiting some benefits such the Canada Child Tax Benefit. Under the law, individuals who fail to file a return as required, or who fail to comply with a court order to file, are liable to a fine of $1,000 to $25,000 and up to 12 months imprisonment, as well as having to pay their unpaid taxes with interest.
The CRA administers and enforces tax laws as passed by the Parliament and provincial legislative assemblies. The CRA has no power to impose new taxes, remove existing taxes, raise or lower taxes, or decide how tax money will be spent once it is collected. These powers belong to the elected representatives of the Canadian people in Parliament and in provincial legislative assemblies.
These tax myths have been rejected by Canada's courts. For example, on August 31, 2000, the Ontario Superior Court of Justice issued aruling rejecting arguments that the Income Tax Act applies only to corporate entities and that all taxes are voluntary. The judge said, "I find that a 'person' as defined in s. 248(l) of the Income Tax Act includes both a natural person and an artificial person. It follows that the applicant is a 'person' and a 'taxpayer.' His obligations include the filing of annual income tax returns and the payment of any income tax owing under his returns."
Tax myths debunked? Or are you still seeking clarity? Take your time and arrive at any tax decision only after prior consultation with a tax advisor. Avail the expert tax consultancy services of ATS, improve your tax decision making and ensure you are within the law.
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Your relationship with your banker is like your boss. Your stay on good terms with him and good times lie ahead of you. You lose his trust and the downfall begins. To borrow regularly and have your loans approved you should follow the best borrowing practises and you have come to the right article.
Borrow to repose bankers confidence
The best time to borrow money is when you don’t need it. It helps sustain a good impression on the bank as your finances are intact. This is exactly when you should make your move for the next stage of borrowings. Your chances of getting your business loan approved are much higher and you will be in a better position to negotiate terms since you don’t really need the funds right then. The worst time to negotiate a new loan is a week before you absolutely need to have the funds. As business, you always require access to a ready cash flow and this is the way to ensure you have it.
Borrow what you need
Know what you need and borrow accordingly. Why? Because it’s difficult to separate the true necessities from the excesses in a business context–especially when you are focused more on the getting of the loan and not so much on the repayment. Get a clear-eyed, practical view of the uses for your loan, including a realistic method and timeline for repaying it. This will bring your needs into focus, divorced from those attractive wants.
Building a rooftop deck for your restaurant? Expanding your pharmacy into an adjacent space? Buying more inventory for the upcoming season? Make sure you get several quotes for the work on whatever it is you’re preparing to do and then build an additional 10% to 15% on top to get a truly realistic number. Delays happen. People sometimes don’t come through. Cost overruns are part of almost every project, so be realistic about the scope and expense of whatever your growth plan entails. Allowing for unintended or unforeseen expenses is smart business.
Gain your banker’s trust
You have to build a fiduciary relationship with the bank. For the bank to lend you a substantial loan amount in times of the company’s stress, it needs to trust in you and in your ability to repay. Without trust, your banker can’t put money in your hands.
Keep good records and report properly. Bankers do not like late reporting packages, inaccurate information or reports that change without a good reason. Your banker needs to trust the information you’re giving them. Give due regard to the accuracy and reliability of your reports.
Prepare for the worst
It is always important to have sufficient cash balance in your account. Bankers want an extra cushion of equity so they can lend more flexibly in case your company has had a bad year. In such cases, bankers will rely on your track record before lending. Having sufficient in your kitty after a bad year or two you will further reinforce your financial stability and help you to be more successful in negotiating the next loan renewal.
Collateral security to the banker
Collateral does not repay a loan, but it does ease the banker’s mind. Securing a loan against valuables or your immoveable property will also serve as a reminder of the dire consequences which you may face. This will make you more cautious in dealing with your finances.
Make the Competition work to your advantage Banks are concerned about their competitors’ interest rates, collateral packages, and guarantees. Use this to your advantage by doing your homework when seeking a loan and making that clear to your banker. Knowing about your bank’s competition can also let you prepare for a needed quick search for a new lender should your banker pull out.
Still not able to get your finances on track owing to poor credit rating? Lost your banker’s trust? Not getting your business loan in Edmonton, approved? Utilize the services of ATS, and get the accounting assistance and business know-how you need to expand and reach the pinnacle of success.
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Every business corporation or enterprise wants to retain its lion share of investors. However, in periods of economic expansion, investors are on the lookout for better opportunities to exit the business. To avoid these stresses and reduce the risks associated with each new opportunity, it is critical for the shareholders to have a clear set of rules that apply to them. The agreement used for these rules is called a Unanimous Shareholder Agreement (USA).
What is a Unanimous Shareholder Agreement?
Under the Canada Business Corporations Act (CBCA), a unanimous shareholder agreement is an agreement that is among all the shareholders of a corporation and that restricts the powers of directors to manage or supervise the management of, the business and affairs of the corporation.
What is the Need for a USA?
A Unanimous Shareholders Agreement in Alberta can help settle disagreements between shareholders. Factors arise in the personal lives of shareholders that can negatively impact a corporation or leave it in a state of limbo that can hinder its success. Such situations being :
Situation 1: In the Event of the Death of a Shareholder
In the event of the death of shareholders, his or her shares may divert to a widow or children. In such an event, it important that you’re USA contains how shareholders may divest of company shares. Shareholders may not want to conduct business or give decision-making authority to family members, and the USA can cover this. It can also prevent family members of the deceased from selling shares to another party without shareholder consent.
Situation 2: When a Shareholder Leaves the Country
This is especially important, as your corporation can lose the tax advantages that comes with having a Canadian Controlled Private Corporation status. This can place a higher tax burden on your corporation, making it crucial that you have some provision for handling these shares if this does happen.
Tax Consequences of death of shareholder
The tax consequences for the estate and the surviving shareholders will vary depending on the scenario chosen. Let’s take a look at the following example.
Martin is deceased. Before his death, he owned 40 percent of Corporation A. These shares had a paid-up capital (PUC) and an adjusted cost base (ACB) of $4,000, and a fair market value of $604,000. Martin and the other shareholder, Denise, whose shares have a PUC and an ACB of $6,000, signed a shareholder agreement in 1998, under which the surviving shareholder would become the sole shareholder following the death of the other party. The purchase of the deceased shareholder’s shares is financed by a life insurance policy held by Corporation A. The capital dividend account (CDA) created when the proceeds of the life insurance policy are received is equal to the price paid for the shares. The personal tax rates are 30% on dividends and 45% on other income. The shares are not eligible for the capital gains deduction.
It is important for every budding entrepreneur to understand the tax provisions relating to the ITA, before getting into the drafting stage. ATS Accounting provides in- depth tax consulting and business start up services required for individuals and businesses to incorporate into their USA, to improve their profitability.