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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.
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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.
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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.
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Have you recently updated your business cost sheet? Whether it is a list associated with production, administration or the distribution of a product, every company must have its cost sheet. The more important part of having a cost sheet is keeping it updated as often as possible. The sheet is in itself a reminder of how you should calculate the cost of the product to determine the margin of profit that you gain when each one is sold. Also, it will help ensure that you can set up prices of other products that you decide to sell in the future.
Did you know that the cost sheet should be prepared even before you begin business operations? If this is how important it is to keep track of the flow of money in the business, it is also best that you know what should be in it. When you prepare the sheet, make sure that you include all the details necessary. Not only will it be helpful today, but it will serve as your guide to adequately prepare cost sheets in the future whenever you decide to add more products to the list you already have.
· First, your cost sheet must contain a list of all the products that your business is selling. Alongside these items should be a list of how much they cost when you procured them. On the column beside it, make sure to list down the price rate that you are selling it for. Whether it is a product or a service that you are offering, it is essential to put them on a list. Once you get a list of the total cost of the item, add the percentage of profit to help you arrive at the expense of each item or service.
· Second, be sure to include the source of the items that you are selling. If it comes with a shipping fee, then make sure to cover all the expenses incurred to get the item to you. All these should be shouldered by the cost of the item to make sure that you don’t lose money on your investment. The goal of every business is to earn; thus, you have to make sure that you include all expenses and have put them on a list.
· Third, the cost sheet must also include the details of the supplier as well as the details on the partner shipment company. These details will help you during the evaluation of the services and products you have been provided with. When it seems as if the relationship with these providers are no longer as productive as they used to be, it is best to rethink if keeping the relationship with them is still right for your business. When you decide to reconsider, the cost sheet will help you during the evaluation.
Preparing the cost sheet may be something that’s easy to overlook. However, it is the document that can be extremely beneficial for your business in the future. When its preparation becomes a challenge, it is best to ask a professional accountant to help you. They can prepare the cost sheet as well as explain the implications of the potential increase in cost and decrease in sales. All you need is a certified accountant to get the job done right.