Have you ever wondered how businesses achieve peak financial performance while maintaining their focus on growth? The answer might lie in the strategic power of outsourced accounting.
In this blog, we will delve into the importance of outsourced accounting for businesses of all sizes in Canada, shedding light on its advantages and impact.
What Does Outsourced Accounting Services Involve?
Outsourced accounting refers to the act of entrusting accounting and financial duties to an external service provider or a dedicated accounting firm.
Why opt for Outsourced Accounting Services?
Outsourced accounting allows businesses to streamline operations, reduce costs, and tap into specialized expertise while focusing their internal resources on core activities and strategic initiatives. We will explore the reasons behind the growing trend of account outsourcing and the benefits it offers to businesses.
1. Navigating Complex Financial Landscape
For businesses, staying compliant with these regulations while maximizing financial efficiency can be a daunting task. It is where outsourced accounting steps in as a strategic solution.
Whether it’s GST/HST implementation, tax reporting, or financial statement preparation, outsourced accounting professionals are well-versed in these intricacies, enabling businesses to navigate the financial landscape with ease.
2. Cost- Efficiency and Scalability
One of the primary reasons businesses opt for outsourced accounting is the significant cost savings it offers.
Furthermore, outsourced accounting offers scalability. Outsourcing allows for seamless adjustments to service levels, ensuring that financial operations remain aligned with the organization’s growth trajectory. This adaptability is crucial for businesses aiming to scale rapidly and efficiently in the competitive market.
3. Access to Expertise and Technology
Outsourced accounting firms in Canada are equipped with the latest technologies and methodologies, ensuring accurate and efficient financial operations.
4. Focus on Core Competencies
Businesses need to concentrate on their core competencies to maintain a competitive edge.
Entrepreneurs and business owners can channel their energy towards innovation, product development, and customer engagement, thereby driving growth and enhancing their market position.
5. Enhanced Data Security and Compliance
Businesses handling sensitive financial information must adhere to stringent data protection regulations.
By entrusting their financial operations to reputable outsourced accounting firms, businesses can focus on growth without compromising data security or facing compliance-related challenges.
6. Mitigating Risk
Conforming to accounting norms and tax statutes stands as a pivotal concern for businesses. Yet, these regulations are intricate and susceptible to regular modifications.
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Filing Taxes presents a range of accounting outsourcing solutions encompassing proficiency, economic advantages, cutting-edge technology, adherence to regulations, time efficiency, and tailor-made reporting. Through collaboration with our expert accountants, enhance your financial administration, alleviate operational encumbrances, and channel efforts into strategic endeavors that bolster your business triumph.
Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step toward proper management of your finances and ensure you comply with CRA reporting and payroll deductions.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
As a small business owner in Canada, it’s not uncommon for your day to go in various directions. Once your business starts to gain momentum your company must find an effective way to manage its books.
From small startups to large corporations, businesses of all sizes are increasingly turning to outsourcing their bookkeeping functions. The decision to outsource bookkeeping services comes with a multitude of benefits that can positively impact a company’s financial operations.
Outsourcing bookkeeping services has become an increasingly popular choice for businesses, regardless of their size or industry. By partnering with a reliable bookkeeping service provider, companies can unlock a multitude of benefits that significantly impact their financial operations. In this article, we will delve into the compelling reasons why businesses should consider outsourcing their bookkeeping functions.
The benefits of outsourcing bookkeeping are numerous—and you won’t miss a thing, either. You may even discover new, previously untapped resources at your disposal.
1. Streamlining And Managing Finances
The first step on the road to business expansion is making sure the road itself is smooth and solid enough to walk on by ensuring your current financial processes and books are streamlined and updated. Having a professional bookkeeper on board makes these processes efficient and easy. The outsourced bookkeeper can collate and analyze your business data to create comprehensive monthly or quarterly financial reports. Having such detailed reports helps make informed business decisions. They also come in handy when approaching potential clients or investors for business.
2. Save Time
It’s no secret that logging, analyzing, and reconciling payments and other financial records takes time out of your day. One of the benefits of a virtual bookkeeper is that you can buy your time back—at a much lower cost than your lost opportunities, too.
By outsourcing this tedious, time-consuming task, you can attend to the things that require your attention. You’ll have more free time to improve customer service, evaluate processes, and overall, improve operations.
Focused Staff – external bookkeepers can provide more focused work because they aren’t distracted by the day-to-day activity in your business.
The role of an outsourced bookkeeper is to focus on your business and only your business for a specific amount of time each month to meet your reporting deadlines and expectations around the budget for services.
3. Cost Efficient
Outsourcing bookkeeping services can significantly reduce costs for businesses. When you outsource, you eliminate the need to hire and train full-time in-house bookkeepers, which can be expensive and time-consuming. You also save on overhead costs, such as office space, equipment, and software licenses. Outsourced bookkeeping services in Toronto often operate on a more flexible fee structure, allowing you to pay for the services you need when you need them, making it a cost-efficient option.
4. Expertise and Accuracy
Professional bookkeeping firms specialize in financial record-keeping and have a team of experts with a deep understanding of accounting principles and Canadian tax regulations. Professional bookkeeping firms specialize in financial record-keeping and have a team of experts with a deep understanding of accounting principles and tax regulations.
5. Planning and Strategizing
Professional bookkeeping services in Toronto give your business access to expert guidance. Apart from generating real-time financial insights that provide clarity on the current financial situation of your business, these experts can also identify key performance indicators and growth opportunities. Based on the data collected and armed with the latest technology, they can also help predict future sales or trends. They can guide you on how to make optimal use of the resources at your disposal. In-depth knowledge regarding business and tax regulations in other states or countries makes such outsourced bookkeepers and accountants a valuable addition to your team.
6. Enhanced Security
Professional bookkeeping firms prioritize data security and confidentiality. They implement robust security measures and use encrypted systems to protect your financial information. This level of security can be challenging and costly to replicate in-house, making outsourcing a more secure option.
7. Access to Advanced Technology
Outsourced bookkeeping services in Toronto often have access to the latest accounting software and technology. This ensures that your financial records are kept up-to-date and that you benefit from the efficiency and accuracy offered by modern accounting tools.
8. Helps in Tax Seasons
Why make tax season stressful when it can be simple? Among the many other benefits of outsourcing bookkeeping, simplified tax preparation, and full compliance will take unnecessary stress off your shoulders.
Instead of scrambling to get your numbers in order, outsourcing bookkeepers will help you prepare for tax season as time goes by. Once the time comes, they’ll be able to help you file immediately, while taking advantage of potential tax deductions.
9. Scalability and Flexibility
Businesses experience fluctuations in their financial activity throughout the year. Outsourced bookkeeping services can be tailored to your specific needs and scaled up or down as required. This flexibility allows you to adapt quickly to changes in your business, whether it’s during busy seasons or periods of economic uncertainty.
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Outsourcing a bookkeeping service can make a difference in how efficiently your small business can grow. At Filing Taxes, we’re invested in helping your business grow. We offer all the benefits of outsourcing bookkeeping, and take care of the entire process for you!
Get started saving time and money in your business by signing up now! Talk to a professional bookkeeper to outsource your bookkeeping so that you can save time and focus on your business.
Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step toward proper management of your finances.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
Current liabilities are financial obligations of a business that are due within one year or within a normal operating cycle. Identifying, recording, and properly disclosing current liabilities is an important aspect of financial accounting in Canada. I will provide an overview of key principles and concepts related to current liabilities under Canadian generally accepted accounting principles (GAAP).
There are several common types of current liabilities that businesses incur:
Accounts payable refers to amounts owed by a company to its suppliers and vendors for goods or services purchased on credit. This is typically one of the largest current liability accounts. Accounts payable is considered a known current liability, as the amounts owed and payment due dates are determinable.
Accrued liabilities represent expenses that have been incurred but not yet paid as of the balance sheet date. Common examples include accrued wages, accrued interest, and accrued taxes. Accrued liabilities are also considered known current liabilities.
Unearned revenue, also called deferred revenue, refers to amounts collected in advance for products or services that have not yet been delivered or performed. This creates an obligation to provide the good or service in the future.
Notes payable are written promissory notes with terms of repayment of less than one year. This includes short-term bank loans and lines of credit.
The current portion of long-term debt refers to the portion of any long-term borrowing that is due within the next 12 months. This must be classified as a current liability.
Some common examples of accounts and transactions that would be classified as current liabilities include:
Under Canadian GAAP, there are several key principles that guide the accounting treatment and disclosure of current liabilities:
Current liabilities must be properly distinguished from long-term liabilities on the balance sheet. This helps provide useful information to financial statement users regarding liquidity and solvency.
Most current liabilities are measured at net realizable value, which is the amount of cash or cash equivalents expected to be paid to liquidate the liability.
The notes to the financial statements should provide relevant details about current liabilities, including a breakdown of major types, terms, interest rates, collateral, and other pertinent information.
A current liability is recognized on the balance sheet when it represents a present obligation caused by a past transaction, and settlement is probable to result in an outflow of resources.
By properly identifying, measuring, and disclosing current liabilities according to these principles, a company can provide accurate and decision-useful financial reporting to stakeholders.
In summary, current liabilities represent short-term financial obligations due within one year that are an important component of financial reporting. Common types of current liabilities include accounts payable, accrued expenses, unearned revenue, and notes payable. When recording current liabilities under Canadian GAAP, key principles related to classification, measurement, disclosure, and revenue recognition must be followed to ensure accurate and relevant accounting treatment. Properly identifying and managing current liabilities is vital for effective business financial management and communicating performance to stakeholders.
A critical process in financial reporting and cash management is the bank reconciliation. This is a comparison between a company's reported cash balance and the corresponding amount per bank records. The purpose of regularly reconciling cash accounts is to ensure transactional accuracy, uncover discrepancies, record adjustments, and prevent fraud.
By clearly defining bank reconciliation objectives and procedures, companies can effectively manage cash, reduce errors, monitor financial reporting integrity, and support internal controls. I will outlines the definition and purpose of bank reconciliations, walks through the reconciliation preparation process, and provides examples of associated journal entries for cash adjustment transactions.
Understanding the fundamentals of bank reconciliation facilitates accurate financial recordkeeping and decision making based on reliable cash account reporting.
A bank reconciliation is a process used to compare a company's cash balance in its accounting records to the corresponding cash balance reported by the bank. The purpose of a bank reconciliation is to:
By reconciling cash balances, companies can ensure their accounting records accurately reflect cash transactions and balances. This helps inform business decisions, meet tax obligations, prevent overdrafts, and monitor cash flow. Frequent bank reconciliations also limit opportunities for fraud by uncovering discrepancies quickly.
The key steps to prepare a basic bank reconciliation are:
Below is an example bank reconciliation for Company X:
| Description | Amount |
|---|---|
| Bank statement ending balance | $10,000 |
| Add: Deposits in transit | +$1,000 |
| Less: Outstanding checks | -$500 |
| Bank service fees | -$50 |
| Adjusted bank balance | $10,450 |
| Accounting cash balance | $10,450 |
For any reconciling items that require an adjustment to the accounting cash balance, journal entries are required. Common examples include:
Below is an example journal entry for the bank fees from the earlier reconciliation:
| Account | Debit | Credit |
|---|---|---|
| Bank Service Fees | $50 | |
| Cash | $50 |
By defining the purpose of bank reconciliations, understanding the reconciliation process, and properly recording adjustments through journal entries, companies can ensure their cash is accurately stated. This supports financial reporting, cash management, and business decisions
To prevent errors, automated reconciliation through accounting software is recommended. Frequent reconciliations also help detect and resolve discrepancies early. Reviewing reconciliation reports and all reconciliation adjustments is also important.
In summary, a bank reconciliation is a critical process to:
Completing timely bank reconciliations and associated journal entries maintains the accuracy of financial statements and cash balances. This gives stakeholders confidence in the reported balances while supporting internal financial decisions and controls.
Companies in Canada use the margin of safety and operating leverage as two crucial financial metrics to evaluate profitability and risk.
The margin of safety measures the buffer between a company's actual or budgeted sales revenue and its breakeven point. It shows how much sales can fall before losses are incurred. The margin of safety is calculated as:
Margin of Safety = (Actual or Budgeted Sales - Breakeven Sales) / Actual or Budgeted Sales
For example, if a company has actual sales of $500,000 and its breakeven point is $400,000, its margin of safety would be:
Margin of Safety = ($500,000 - $400,000) / $500,000 = 20%
This means the company's sales can decline by 20% before reaching the breakeven point where no profit is made. A higher margin of safety percentage indicates lower risk and greater ability to withstand downturns.
The margin of safety can also be expressed in dollar terms:
Margin of Safety ($) = Actual or Budgeted Sales - Breakeven Sales
For the example above, the margin of safety in dollars would be $500,000 - $400,000 = $100,000.
Having a high margin of safety protects companies during times of economic uncertainty or changes in the competitive landscape. For example, if a new competitor enters the market, the company has more room for sales declines before incurring losses.
The margin of safety depends heavily on the accuracy of sales forecasts and cost estimations. If these figures are overly optimistic, the true margin of safety will be lower than calculated. Companies should routinely reevaluate assumptions and update projections.
While margin of safety measures downside risk, operating leverage measures upside potential. Operating leverage demonstrates how much a company can increase operating income by growing sales. It is calculated as:
Operating Leverage = % Change in Operating Income / % Change in Sales
For example, if a 10% increase in sales leads to a 30% rise in operating income, the operating leverage would be 30% / 10% = 3. This means a 1% bump in sales yields a 3% increase in operating income.
A higher operating leverage ratio indicates fixed costs make up a large share of expenses. Since fixed costs remain constant as production increases, extra sales revenue trickles straight through to operating profits once fixed costs are covered.
Conversely, a lower operating leverage ratio signals a high proportion of variable product costs that rise alongside production volumes. In this case, operating income does not spike as sharply with sales growth.
While tempting, chasing high operating leverage through minimising variable costs and outsourcing can be risky. A supply chain disruption or sudden rise in expenses may swiftly eliminate profits since fixed costs remain rigid. Firms should weigh upside potential against stability.
Analyzing margin of safety and operating leverage together paints a fuller picture of a company's financial health.
For example, a company with high operating leverage but a slim margin of safety likely has high risk. Profits could grow exponentially if sales targets are met, but even a small revenue shortfall could sink earnings.
Conversely, a thick margin of safety cushions against volatility in firms with high operating leverage. Companies can afford sales missteps and still deliver profit growth as volumes improve.
When both ratios are low, firms face limited downside but also modest upside if sales stagnate. Boosting operating leverage often requires upfront fixed cost investments companies may avoid if the margin of safety seems inadequate.
In Canada, fluctuating commodity prices can quickly alter the outlook for natural resource firms in sectors like mining and oil and gas. Tracking margin of safety and operating leverage metrics helps managers adapt operations as conditions change.
Below are examples demonstrating how two fictitious Canadian companies could use margin of safety and operating leverage metrics to guide decisions:
High Tech Manufacturers Inc. is a consumer electronics company based in Ontario. The firm earns a 25% gross margin on sales of tablets and e-readers.
Last year's sales were $5 million with fixed operating costs of $1 million. Variable product and labor costs amounted to $3.75 million. Operating income was $1.25 million.
Margin of Safety
Actual Sales: $5,000,000
Breakeven Sales: $4,000,000 Margin of Safety = ($5,000,000 - $4,000,000) / $5,000,000 = 20%
The 20% margin of safety indicates High Tech can endure a moderate sales decline before losses occur.
Operating Leverage
A 10% rise in sales from $5 million to $5.5 million would lift operating income by 30% from $1.25 million to $1.625 million.
Operating Leverage = 30% / 10% = 3
The operating leverage of 3 signifies strong upside if High Tech grows tablet and e-reader volumes. But the medium 20% margin of safety also provides a buffer if sales stall.
Northern Energy Partners operates oil and gas wells in Alberta.
Last year's sales were $20 million, with fixed operating costs of $5 million. Variable lifting and transportation expenses totalled $8 million. Operating income was $7 million.
Margin of Safety
Actual Sales: $20,000,000 Breakeven Sales: $13,000,000
Margin of Safety = ($20,000,000 - $13,000,000) / $20,000,000 = 35%
The 35% margin of safety means Northern Energy can endure over a third of revenue evaporating before hitting breakeven. This cushion is vital given oil's price volatility.
Operating Leverage
If a 15% rise in oil output drove a 25% sales increase from $20 million to $25 million, operating income would jump 55% from $7 million to $10.85 million.
Operating Leverage = 55% / 25% = 2.2
The operating leverage of 2.2 indicates Northern Energy can rapidly expand profits as more wells come online. But oil production spikes require heavy upfront drilling costs, making the wide 35% margin of safety advisable.
The margin of safety and operating leverage offer vital insights into corporate risk and earnings growth potential. Assessing the ratios together provides a balanced perspective on profit drivers and stability. Routine monitoring of these metrics allows executives to adjust operations based on changing internal capabilities and external market forces.
The statement of cash flows is one of the core financial statements, along with the income statement and balance sheet, that provides important information about a company's financial health and performance. In Canada, the statement of cash flows is governed by accounting standards issued by the Accounting Standards Board (AcSB). Here is an overview of the key things to know about the purpose and use of the statement of cash flows in the Canadian context:
The statement of cash flows shows the sources and uses of a company's cash and cash equivalents during a specified period, usually quarterly or annually. It breaks down cash flows into three main categories:
The net change in cash across these three categories equals the net increase or decrease in cash for that period.
The statement of cash flows serves several important purposes:
Assessing liquidity and solvency: The statement helps determine if the company is generating enough cash from operations to pay its expenses, or if it is relying too much on outside financing. This helps assess short and long-term liquidity and solvency risks.
Evaluating financial flexibility: Analyzing trends in cash flow from operations, investments and financing shows how well the company is managing cash and its ability to respond to opportunities or adverse events.
Assessing quality of earnings: It helps determine if net income is backed by actual cash flow or non-cash accounting maneuvers. Comparing earnings and cash flow can signal potential issues.
Forecasting future cash needs: Historical cash flow patterns provide a basis for projecting future cash requirements and sources.
In summary, the statement of cash flows provides unique insights, not apparent from other statements, into the financial health, flexibility and performance of a company over time. This is vital for financial analysis and decision making by management, investors and lenders.
Certain key accounting principles govern the preparation of statement of cash flows in Canada:
Companies can choose between the direct or indirect method to present operating cash flows. Under the more commonly used indirect method, net income is adjusted for non-cash items to derive cash flow from operations. Cash flows from investing and financing are usually presented under the direct method.
In summary, the statement of cash flows is a vital report outlining the sources and uses of cash by a company over a period. It provides unique insights into liquidity, financial health, flexibility and performance - key aspects that influence investment and lending decisions. Following standard principles, companies in Canada prepare the statement of cash flows as per accounting rules laid out by the AcSB.
In managerial accounting, manufacturing overhead refers to the indirect costs incurred during production that cannot be easily traced to individual units produced. These costs include things like factory utilities, equipment depreciation, and factory supervisor salaries.
To allocate overhead costs to units produced, companies estimate the overhead costs for the year and divide that by an allocation base like direct labor hours to calculate a predetermined overhead rate. This rate is then used to apply overhead to jobs during production by multiplying the rate by the actual direct labor hours or machine hours used on each job.
However, the actual overhead costs incurred during the year rarely equal the amount that was applied to jobs using the predetermined rate. This results in either an underapplication or overapplication of overhead at year-end.
If at the end of the year, the balance in the manufacturing overhead account is a debit, it means overhead has been underapplied. This indicates either:
In contrast, if the balance in manufacturing overhead at year-end is a credit, overhead has been overapplied. This means:
Essentially, underapplied overhead means the costs charged to production were too low, while overapplied overhead means costs charged to production were too high.
While small differences between applied and actual overhead may not significantly impact the income statement, larger discrepancies can distort product costs and lead to poor pricing and production decisions.
For example, if overhead is significantly underapplied, it means unit costs are understated in inventory. As that inventory is then sold, it shifts the underapplied costs to cost of goods sold and reduces gross profit margin for those periods.
Conversely, overapplied overhead shifts too much overhead cost into inventory, overstating inventory balances. Then as goods are sold, it shifts excessive overhead to cost of goods sold, overstating those expenses and understating margin.
To avoid distortions, companies make adjusting entries at year-end to eliminate any underapplied or overapplied overhead balances.
When overhead expense has been underapplied, companies debit Cost of Goods Sold and credit Manufacturing Overhead for the amount of underapplied overhead.
For example, if a company applied $248,000 of overhead to production based on estimates, but actually incurred $250,000 of overhead costs, the entry would be:
Cost of Goods Sold $2,000 Manufacturing Overhead $2,000
This shifts the balance of underapplied overhead to cost of goods sold in the period it was incurred, matching expenses with revenues.
Some companies may do a more complicated 3-part allocation, splitting the underapplied amount between Work in Process inventory, Finished Goods inventory, and Cost of Goods Sold. This approach allocates underapplied overhead into the ending balance of inventory accounts according to how much was sitting in each at year-end.
For overapplied overhead, companies credit Cost of Goods Sold and debit Manufacturing Overhead to eliminate the overapplied amount.
If a company applied $250,000 of overhead to production but only incurred $248,000 of actual overhead, the entry would be:
Manufacturing Overhead $2,000
Cost of Goods Sold $2,000
This reduces the current period's cost of goods sold to represent actual overhead incurred.
As with underapplied overhead, some firms may do a 3-part allocation between Work in Process, Finished Goods, and Cost of Goods Sold.
Canadian managerial accounting practices closely follow those in the United States in terms of overhead application and disposition. This includes:
However, while US GAAP allows companies to shift under/overapplied overhead to just cost of goods sold, IFRS accounting rules followed in Canada require the 3-part allocation in most cases. This splits variances between work-in-process, finished goods, and cost of goods sold.
So for multinational companies operating in both countries, overhead accounting may differ slightly. But the core concepts and rationale remain the largely same. Getting actual overhead costs recognized appropriately is critical for accurate financial reporting.
Properly accounting for manufacturing overhead is crucial for product costing. By identifying and disposing of underapplied or overapplied balances companies get a more accurate picture of true production costs each period. This enhances short and long-term decision making across the organization.
Labor is a major cost component for many businesses. Understanding and analyzing labor variances - the difference between actual labor costs incurred and standard or budgeted labor costs - provides important insights into operational performance and efficiency.
This article will focus on the key aspects of labor variance analysis in the Canadian context:
There are several potential reasons why actual labor costs may differ from what was budgeted:
There are two key types of direct labor variances:
The labor rate variance measures the difference between the actual wage rate paid to workers and the standard wage rate used to build labor budgets.
The formula is:
(Actual Hours Worked x Actual Wage Rate) - (Actual Hours Worked x Standard Wage Rate)
If the actual rate paid is higher than budgeted, the variance is unfavorable. If it is lower, the variance is favorable.
The labor efficiency variance captures the difference between actual hours worked and the standard hours allowed to complete a certain number of units produced.
The formula is:
(Standard Wage Rate x Actual Hours Worked) - (Standard Wage Rate x Standard Hours Allowed)
If actual hours exceed the standard, the variance is unfavorable. If actual hours are less than standard, it is favorable.
In some cases, businesses may also calculate:
Unfavorable labor variances directly increase cost of goods sold and reduce gross profit margins. If significant and persistent, this can lead to lower net income.
Variances can also signal issues of concern - such as poor worker productivity or rising market wage rates - that if unaddressed can negatively impact long-term profitability.
Conversely, favorable variances directly reduce COGS and help boost profitability. Management should investigate the root causes - such as efficient worker performance or production volumes exceeding targets - and try to replicate and sustain such outcomes.
A few unique aspects business should consider when evaluating direct labor variances in Canada:
Routinely analyzing direct labor variances versus standards provides vital insights into operational efficiency, cost control, and workforce productivity. While some universal variance fundamentals apply across countries, businesses in Canada need to carefully apply benchmarks and evaluations based on province-specific and industry-specific labor cost dynamics.
The federal Goods and Services Tax (GST) is a 5% tax applied on most goods and services in Canada. To help offset the cost of the GST for low and modest income individuals and families, the government provides the GST tax credit.
In Fall 2022, the federal government announced a one-time doubling of the GST tax credit for 6 months to help Canadians deal with high inflation. Here is what you need to know about getting this increased GST credit.
You may be eligible for the increased GST credit if you meet the following criteria:
If you already receive the regular GST credit, you will automatically get the increased amount. You do not need to apply separately.
If you do not currently get the GST credit but believe you are eligible, you need to file a tax return and apply to the Canada Revenue Agency (CRA).
For existing Canadian residents:
Simply file your annual tax return. Even if you had no income to report, filing a return is necessary for the CRA to determine your eligibility.
For new residents to Canada:
As a new resident, you must take additional steps to apply:
It may take a few months for your application to be processed before payments begin. Apply early to receive credits sooner.
The increased GST credit will double your payment for 6 months. The maximum annual amounts for 2022-2023 are:
So the doubled credit for 6 months could provide up to:
These amounts are based on your specific net family income and family situation. Payments are made quarterly, in January, April, July and October.
While aimed at supporting individuals and families, the increased GST credit can also impact businesses in several ways:
With extra disposable income from the larger GST credit, more consumers may choose to spend on goods and services. This can boost revenue for businesses.
However, the impact may be limited, as those eligible for the credit are generally low and modest income households. Much of the additional funds may go towards covering essential living costs.
As a value-added tax, the GST is applied at every stage of production and distribution. While businesses can claim input tax credits to recover the GST they pay on inputs, tracking and reporting GST adds administrative complexity.
With a changing tax credit amount to calculate, the doubled GST credit could slightly increase compliance costs and paperwork for businesses. However, the impact is small, as systems and processes for calculating GST credits are already in place.
Consumers receiving the boosted tax credit may be sensitive to rising prices driven by inflation. This can put pressure on businesses to keep prices low and competitive.
Businesses with narrow profit margins may find it difficult to absorb continued cost increases without raising prices. On the other hand, those feeling inflationary pressure may have less discretionary income to spend, despite the extra tax credit funds.
Small businesses may be the most challenged by the changing tax credit, as they have less staff and capability to adapt. Adding to inflationary pressures and economic uncertainty, extra GST paperwork could increase operating costs for small business owners.
To alleviate administrative burdens, small suppliers and businesses with less than $30,000 in annual taxable supplies can use the Quick Method for calculating GST/HST. This simplifies filing requirements.
The increased 6-month GST tax credit offers timely relief to consumers struggling with rising costs. Individuals and families who meet income requirements will automatically receive bigger quarterly payments.
For businesses, the doubled credit may stimulate a modest increase in consumer spending. However, administrative hassles will be minimal and the competitive pressure to restrain prices may prove more impactful.
Careful tracking of sales taxes and input costs remains vital for managing the GST obligations businesses take on. Developing strategies to boost productivity, cut expenses and streamline operations can help offset economic challenges - with or without changes in tax credits.
Here are a few compelling reasons to dump Quickbooks in favour of professional outsourced accounting services for your business.
Let’s face it: in the business world, accounting has a reputation for being a dull subject. If you're a small business owner, you’d rather discuss your products and services than your accounting debits and credits unless you work in accounting.
As a small business owner, you’ve undoubtedly kept a close eye on expenses, knowing that it’s your responsibility to keep costs low. You might have even done your own bookkeeping in QuickBooks or glanced over your bookkeeper’s shoulder to keep an eye on the books.
Why, if it’s such a dull activity? Because astute business owners recognize that accurate and timely accounting is not just a necessary evil, but also a necessity for their company’s survival.
Most entrepreneurs, however, learn that their time is better spent on other things as their business grows. It is a better use of time to concentrate on growing the primary business rather than handling day-to-day bookkeeping. Outsourcing accounting services makes a lot of sense in this situation.
When a business owner can no longer be involved in every aspect of the firm, it requires more than just bookkeeping and basic accounting software, which are maintained by whoever has the time. A growing company not only requires, but also deserves, a formal accounting department.
When Is It Time to Move from Bookkeeping to Accountant Services Outsourcing?
In the growth phases of a company’s development, a bookkeeper or bookkeeping software will not be able to deliver what a business owner truly requires: management accounting.
When a bookkeeper is no longer sufficient and managerial accounting is necessary, a small business or nonprofit organization has reached a point in its life cycle where accounting becomes a more exciting topic of discussion.
We’ve noticed that unsatisfied business owners who have a “getting better” perspective see accounting outsourcing as a way to quickly graduate to managerial accounting. They see outsourcing as a competitive advantage that allows them to be the best in class without having to commit significant time or money upfront.
Still not convinced? Here are a few compelling reasons to dump Quickbooks in favor of professional outsourced accounting services.
KEEP YOUR FOCUS ON YOUR PRIMARY BUSINESS.
Most businesses and non-profits do not have accounting as a core competency.
According to most business management experts, any function that diverts workers and resources away from making money and is not related to your company’s core expertise should be outsourced. As a result, outsourcing accounting frees up management time to focus on areas of the business that promote sales, service, and, ultimately, profit.
ELIMINATION OF IN-HOUSE BURDENS
Using other people’s resources (OPR) instead of employing, training, and managing extra accounting employees can save a company time and money.
As a new manager, you’re already dealing with a lot of human resources issues. Hiring and keeping staff is a lot more difficult than many people expect, especially if they’ve never done it before, with all the financial hassles that come with it, especially when it comes to taxes.
Business owners that are focused on strategic growth do not want to add to their workload by managing an accounting department. As a business owner, your first responsibility should be to focus on the people who make money, rather than on accounting.
While outsourcing accounting is frequently the next step for growing organizations, it can also benefit fully funded start-ups. This is because these start-ups need a scalable accounting platform right away and are frequently required to provide corporate operating plans to their stakeholders ahead of time.
ON-DEMAND EXPERTS
One of the most significant advantages of outsourcing accounting is access to accounting and business technology expertise. As accountants, we have been educated on how to apply best accounting practices and create systems and tools that connect financial data across the organization.
Outsourced accounting specialists, like us, strive to stay current with new technology that can benefit your business. We devote time and resources to ongoing research, training, and technological advancements, all while keeping your business in mind.
COMPLIANCE VS. RELIANCE
Outsourced accounting services enable reliance by providing financial knowledge you can trust to make smart financial decisions. Bookkeepers often focus on tax and audit compliance, whereas outsourced accounting services enable reliance by providing financial knowledge you can trust to make smart financial decisions. Compliance guarantees that all required duties are accomplished. Reliance provides you with actionable financial insight that allows you to make data-driven decisions.
One of the most important decisions a business owner will make is pricing. This decision is made every time a proposal is sent out the door, and it may make or kill a company.
If your accounting is entirely focused on compliance, you won’t have visibility into profitability by customer, job, or marketing budget. If you don’t know who your most profitable clients are, how do you know where to focus your sales force or where to direct your marketing dollars? You’ll need a full-service accounting firm that can ensure both compliance and reliability.
PEACE OF MIND
Accounting is best left to a team of accounting experts who can ensure that a company’s financial data is accurate and of high quality. This peace of mind frees management to focus on sales, client relationships, and building the company’s value rather than accounting.
INCREASED OPERATIONAL EFFICIENCY
Outsourced accounting can help your company or nonprofit improve operational efficiency. To begin, the outsourced accounting team will design and implement a financial system that combines automation and integration to improve financial reporting.
Second, automation allows you to spend less time working and more time working on your business by speeding up operations. Time and expense tracking, as well as labour cost allocation, can all be automated, making life easier for your employees and helping you measure profitability more accurately.
Additionally, automating the billing and collection process saves time and money on invoicing while also enhancing cash flow through faster collection.
FINANCIAL INTELLIGENCE
With more accurate knowledge, it is always easier to make better decisions. A business owner who keeps a close eye on the finances of their organization is better prepared to drive it forward by answering questions such as:
This degree of skill is difficult to get with a regular bookkeeper. A business owner needs outsourcing accountant services to properly answer these questions and make strategic decisions that affect profitability.
Wrap Up
At Filing Taxes, we specialize in a type of outsourced accounting service that our clients love, and we believe you will as well. We supply you with everything an onsite team of specialists would, and we’re just as invested in your success as you are, but we don’t take up office space.
We act as your accounting department, as well as financial counsellors, and offer other services too. Not only will this save you time and money—and keep you on the right side of the tax office—but it will also give you an advantage over your competitors.
We help high-potential entrepreneurs in creative industries be successful without the stress and yawns of traditional financial management. We are the strategic voice for growth and the daily doers of the stuff you don’t want to do. Soup to nuts—we've got you covered, all for a fixed monthly fee. all backed by many years of experience working for firms just like yours. Filing Taxes is a reliable accounting service provider to small and medium-sized businesses with clients from all over Canada. Feel free to contact us through our website filingtaxes.ca or reach out at 416-479-8532. Schedule your tax preparation appointment with us and take the first step towards proper management of your finances. Our professional personal tax accountants will make sure to get you the maximum tax refund on your personal tax return.
Disclaimer:
The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
Every business owner knows that tax laws come with a new twist with the passing of each year. It can be a real challenge to make profitable financial decisions if you are unfamiliar with the new tax law and do not understand how it works. The truth is, hiring a CPA accounting firm in Toronto is always a good idea if you desire to take your business to greater heights. Not only are these Toronto accountants familiar with new tax laws, but they are also capable of offering financial advice, developing budgets, and helping you set financial goals that will benefit your business in the long run. But there are certain things that you need to consider when choosing Toronto bookkeepers. Here are some of them.
1. Qualification
You need to find out the degrees and professional certification or training that the accountant has before you make your hiring decision. You need to know that not all Toronto accountants perform the kind of services you may need in the future. Some financial services require licensing and if your CPA does not have a license, you will need to hire another professional soon. Instead of exposing your financial records to different CPAs, why not choose one that has the qualification that you will require both now and in the future.
2. Fees
Bookkeeping service Toronto rates vary from one firm to another. Some firms charge by the minute and others charge by the hour. There are accounting firms that require a retainer for advisory services and there are still others that charge a specific amount for each financial task they perform. For example, they could charge a set rate for preparing a profit and loss statement, filing a personal income tax form, and compiling a statement of net worth. Before hiring, make sure you are clear on how they set their charges and how much they charge. If you are not comfortable with their rate, it is advisable to look elsewhere.
3. Audit Support
The last thing you need is to hire Toronto bookkeepers that will not be there to represent your interest when the Canada Revenue Agency(CRA) shows up. Facing an audit is no easy task but having your accountant by your side can make the whole process less stressful. Some accounting firms go as far as offering their own offices for audit purposes with an accountant there to help you face the CRA. Whatever the case, you need to ensure that the accounting firm you choose has your back and will be there for you in times like this.
4. Availability
You need to choose an accounting firm that sees your business as important and makes it their priority. If the CPA you choose is too busy and does not have time for you, your business will suffer. Find out if your accountant is just a phone call away or if you will need to schedule an appointment to meet in their office and talk. When making inquiries about the services that the accounting firm offers, pay attention to how quickly they send you a response. If they are in the habit of delaying, things will likely not improve when you eventually hire them.
5. Your Business Needs
Does the accounting firm have any experience working with a business like yours? It is imperative that the Toronto accountants you choose to work with understand the type of business you do as well as what your business needs. Whether the accounting firm is handling only your taxes or more, a lot of things can go wrong, if they do not have a proper understanding of your business or have not worked with a business of your size.
Conclusion
A CPA accounting firm can expose you to other business opportunities when you choose well. Make sure that you ask questions and be satisfied with the answers you get before making your choice.
There are significant advantages for clients who decide to outsource their accounting tasks. To begin with, cost-efficiency, and ending with flexibility in terms of contracts or scaling the number of functions.
We help high-potential entrepreneurs in creative industries be successful without the stress and yawns of traditional financial management. We are the strategic voice for growth and the daily doer of the stuff you don’t want to do. Soup to nuts - we got you covered, all for a fixed monthly fee. All backed by many years of experience working for firms just like yours. Filing Taxes is a reliable accounting service provider to small and medium-sized businesses with clients from all over Canada. Feel free to contact us through our website filingtaxes.ca or reach out at 416-479-8532. Schedule your tax preparation appointment with us and take the first step towards proper management of your finances. Our professional personal tax accountants will make sure to get you the maximum tax refund on your personal tax return.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
Normally, if you do not file a tax return and are required to, or if you make false statements in completing your tax return, or if you leave out important information so that you under-report your income, the Income Tax Act imposes penalties. In circumstances of willful fraud or tax evasion, you may be criminally prosecuted.
Filing your taxes late and not filing your taxes at all can have severe consequences. There are many probable consequences related to unfiled tax returns. CRA will assume you are evading the payment of taxes. Financial affairs and personal situations can be surprisingly sensitive to the lack of current tax filing history.
Here are some issues that you or your company may experience as a result of not having filed your tax returns:
1. Obtaining Credit
Financial institutions and many organizations that provide financial assistance almost always insist on the notice of assessment of corporate or personal tax returns to validate income for debt repayment ability or qualification for program payments. If this independent proof of income is unavailable, you may not receive the financing you require at reasonable rates and terms. Spinoffs of this debacle include a negative impact on credit ratings, delays for receiving benefits, grief to executors and estate beneficiaries, landlord problems, and not surprisingly, really mad spouses.
2. Noncompliance Affects Other Areas
CPP benefits, old age security payments, spouse transfers and tax elections, student loans, GST/HST, and child tax benefits will be reduced or not available. Personal tax returns of either spouse or common-law partners have to be filed as family income is an important determinant of many calculations and entitlements.
3. You Are Presumed Guilty
CRA assumes guilt until taxpayers prove themselves innocent. That is the law. Significant costs usually result if CRA takes action – warranted or not. Taxpayers need to stay ahead of CRA and take advantage of the self-assessing tax system – complete with valid tax planning opportunities.
4. CRA Will Proceed Against You
Once CRA discovers unfiled tax returns and is not satisfied with communication outcomes they often have to get attention by issuing notional (estimated) assessments (tax bills). These assessments are valid tax debts until you file the correct tax returns. These estimated assessments are usually 2 to 3 times what CRA suspects your income to be and will include penalties and interest. The collections department will act on these notional assessments.
5. Noncompliance Affects Others
Unfiled tax returns will affect spouses or common-law partners, business partners, and customers. CRA likes group audits and may assume that there are likely others in family or business groups who are noncompliant. More importantly, if asset ownership or bank accounts are co-mingled or taxpayers have provided funds (not loans) to non-arms length-related parties; CRA is quite active in pursuing third parties for one’s tax debt.
6. Severe, Debilitating Costs
The cost of tax owing increases relentlessly with the application of negligence penalties, late filing penalties, interest on unpaid installments, interest on unpaid taxes, and interest on penalties. Assuming penalties and interest are applied in the usual CRA practice, you can expect your tax debt applicable to each year in arrears to double every eight years. Late filing penalties and gross negligence penalties are ‘hard’ penalties and quite difficult to dispute if the facts are not in the taxpayer’s favor.
7. Transferring Assets
It bears repeating – transferring assets to non-arm’s-length parties (spouses, family, and partners) will create jeopardy for the people who have received assets from you for what CRA will assume are for purposes of tax payment avoidance. In other words, CRA collections will demand information from you (which you must provide) that will inform them of assets that you have hidden or transferred. There exists legislation regarding fraudulent conveyances.
To collect taxes owed and avoid the time and expense of prosecuting people, CRA has set up the Voluntary Disclosures Program (VDP). The Program allows people to disclose any information that is not accurate, not complete, or that was not reported on previous tax returns, without having to pay a penalty or face prosecution. However, the individual will still be responsible for paying the tax owing plus interest. In some cases, CRA may grant partial relief of the interest owing.
Not long. The CRA has many systems in place to find out who isn’t paying their taxes. The technological advancements allowed the CRA to improve its search process, so it’s difficult to avoid paying your taxes for multiple years in a row.
The CRA set up the Voluntary Disclosure Program to enable people who are behind in reporting their taxes to come clean and repay what they owe without paying any penalties. But if the CRA finds out that you haven’t been paying your taxes and tracks you down before you contact them, you will have to pay penalties and interest on what you owe.
Tax evasion happens when an individual or business does not respect the country’s tax laws. If an individual or business does not file their tax returns as they should, by not declaring their income accurately and completely, or by claiming fraudulent expenses on their tax return, they commit tax evasion.
The amount of income tax you pay is correlated with how much money you make in a year. You can reduce the amount of tax you have to pay by claiming certain expenses and tax credits.
Income tax is generally subtracted from your pay by your employer and sent to the CRA. However, you may also have to determine how much you owe and forward the amount to the CRA.
Every year, you should file a tax return to report how much you made, make sure that you’ve paid all the income tax you were supposed to, and access tax credits and benefits.
After the CRA analyzes your tax return, you will get a notice of assessment that will let you know whether you paid too much or too little income tax and whether you are eligible to get some money back through credits and benefits.
You should file your individual tax return by April 30. Keep in mind that, if you’re paying your taxes by mail, your letter should be postmarked before April 30 to avoid penalties.
If you or your spouse are self-employed, you can file your income tax and benefit return by June 15.
If you’re a small business owner, you should file your income tax return by June 15, but you should pay off your balance owing for the previous tax year by April 30.
Corporations should file their income tax returns up to six months after the end of the tax year, so this date will vary according to the corporation’s fiscal period.
If you haven’t filed your taxes in a while, get started today to avoid these potential consequences. For advice and assistance with tax planning, a CRA tax dispute, or other tax issues, get in touch with Filing Taxes today to see how we can help. Experts at Filing Taxes will be happy to assist business owners in this pursuit. To speak with an experienced accountant, contact Filing Taxes either at 416-479-8532 or [email protected]. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
When an employee gets paid, deductions are taken at the source and remitted to the government. This includes CPP contributions that entitle them to the Canada Pension Plan in their senior years, income tax, and Employment Insurance (EI).
But self-employed workers don’t automatically pay into Employment Insurance the way that employees do. This means that self-employed individuals can’t take advantage of EI benefits. Not unless they opt in to the program so that they can access EI’s special benefits for self-employed people, targeted at workers who take time off for:
If you operate your own business and want to have access to these benefits, you can choose to make EI contributions. To do this, you will have to contribute the employee portion of EI premiums. You don’t, however, have to pay the employer’s portion (1.4 times the employee contribution) since you are self-employed.
Currently, employees pay EI premiums of 1.58% on insurable earnings up to $56,300 annually. This equals a maximum annual premium of $889.54. But remember, your premiums will not be deducted at the source like it is for your employees. Instead, you’ll have to remit payment by April 30.
If this is something that interests you as a self-employed person, all you have to do is register online with the Canada Employment Insurance Commission through your My Service Canada Account. If you register between January 1 and April 30 in any given year, your premiums will be based on your previous year’s earnings.
If, however, you apply after April 30, your premiums will be based on your current year earnings and become payable the following April 30. And no matter when you register, you will have to wait a full 12 months before you can access the special benefits.
If you choose to cancel your registration, you can do so within 60 days of registering without paying premiums. You can also cancel your registration after 60 days if you haven’t received any special benefits. But the moment you receive benefits, you are obligated to pay premiums for the remainder of your self-employment.
As a self-employed individual, you have to register online with the Canada Employment Insurance Commission to participate in the EI program, through your My Service Canada Account. Once you receive confirmation that your registration was successful and completed by April 30th the premiums will be based on the previous year’s income tax return, but if completed afterward your EI premiums will be calculated based on your income tax return for that year. You have to wait 12 months from the date of your confirmed registration before applying for EI special benefits.
If you want to know more about this program and find out whether it’s the right choice for you, contact the Filing Taxes team of professional accountants today at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.
Disclaimer
The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
As we now live in a social media-driven world, blogging and vlogging (video blogs) activities have been on the rise. These activities have become so profitable that many individuals have been pursuing them on a full-time basis and earning significant income to support their lifestyles.
Since blogging is sometimes treated like a paid hobby that can be pursued along with a traditional job, unlike other professions requiring certain man-hours, many bloggers ignore the fact that income made from blogging is also subject to taxes.
Being a blogger or influencer can be a rewarding career with plenty of perks, but when it comes to taxes, these tastemakers experience the same complexity as self-employed workers: tax filing is a little more complicated than for those who are regularly employed by a company.
The Canada Revenue Agency (CRA) considers blogging which results in payment/income as a business activity. Income earned from blogging is therefore treated as self-employment income with the individual as a sole proprietor. If you make money from your blog, you should consult a tax professional and consider filing Form T2125: Statement of Business or Professional Activities to report any income made from blogging activities on your personal tax return.
Since blogging is considered a business, it will incur regular operating expenses for which the taxpayer can claim certain qualifying tax deductions and credits. It is also acceptable that in the initial years the blogging business may not result in a net profit thus allowing bloggers to claim any losses on their tax returns. However, bloggers should be aware that claiming losses every year could make the CRA suspicious and result in an audit. To claim these losses, there needs to be a reasonable expectation that the business will eventually turn a profit.
Yes. If you’re earning any income from your blog, it qualifies as self-employed income under CRA Guidelines. This applies whether you’re operating as a formal business entity (like a sole proprietorship, corporation, or LLC) or just doing informal business and collecting some revenue.
The tax package that you will use is T1. This is the package to use if you are reporting income as an individual. T2 is for corporate taxes.
The tax form that you have to fill out for your blogging income is the T2125 Statement of Business or Professional Activities.
Note that T2125 is only for your blogging income. You still need to file your T4s for your regular corporate job income, T5 for your investment income, T5008 for your securities transactions (to calculate your taxable capital gains and allowable capital losses), etc. If you have multiple side-hustles, for example, if you are an actress and a blogger at the same time, then you may have to file multiple T2125 forms.
You should include income that you received through cash and electronic fund transfers (ETFs). However, you must also include items like near cash. The most used example is gift cards. If someone pays you with a gift card, then that is considered income and you need to declare it on your T2125.
Instead of paying cash, many companies have also been paying bloggers goods (e.g., free t-shirts, free cakes, makeup, etc.) in exchange for a blog post, for example. If that’s the case with you, you need to declare the fair market value of the goods in your income as well.
Blogging is a relatively new profession, but it's covered by the same tax laws that apply to many other occupations. You may be able to take advantage of certain deductions to reduce your tax bill.
Here is a brief overview of the various tax deductions that bloggers can claim for their blogging business. If you are considering monetizing your blog, you should consider getting professional tax advice to avoid any tax issues.
These are just some of the common blogging-related expenses. It is best to consult your tax professional regarding the taxation of your blogging business activities. As a safe practice, it is good to maintain all receipts, invoices, and bills related to your blogging expenses since you never know when an expense may qualify for a deduction.
You need to break down all the expenses and categorize them into appropriate buckets (e.g., supplies, business-use-of-home expenses, etc.). Lump-sum expenses could easily trigger an audit from the CRA.
The regular filing deadline is April 30th. However, if you are a blogger, you qualify as a sole proprietor. This is true even if you have a regular 9-5 job. As such, your deadline for filing your tax return is June 15th.
Your spouse’s filing deadline is also impacted. Your spouse can file his/her tax return with the same deadline, i.e., June 15th.
I hope you find the above tax tips for bloggers useful in helping you navigate your tax season. If you have any questions, please don’t hesitate to contact Filing Taxes either at 416-479-8532 or [email protected]. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
Accountants bring order to one of the trickiest, most stressful parts of your business: finances. With a professional accountant, you can save your company money, stay compliant with governing agencies, and budget for the future. The financial performance of your company is primarily dependent on the informed decision-making of your external accountant. Therefore, you need to hire a reliable & trustworthy accountant.
As a business owner, you will be able to breathe easy knowing that your business’ finances are in skilled hands. However, before you can relax, you have to find the right accounting professional for the job. While some prefer to hire in-house, others choose to hire an accounting firm or service to handle their business’ finances. It doesn’t matter what path you take; you still need to ask the right questions.
Just like other professions (like law and medicine for example), all accountants are not equal. Some have spent their careers doing tax and audit, while others have focussed on business performance. Accounting is a vast industry with various specializations. Not every accountant can perform every duty. That’s why you should focus on specialty areas as part of what you ask before hiring an accountant.
Some accountants focus on tax preparations, while others handle essential business reports. First, figure out what your accounting needs are, and then seek an accountant with a track record of tackling those particular tasks. Make sure your small business accountant offers what you need.
Depending on what they do, accountants require specific certificates from governing agencies. For example, accountants need a certified public accountant credential to write an audit report about their company’s finances. If a prospect can’t show you the credentials, it’s a red flag that your accountant may not be the right choice for you.
When you hire for any position, you need to look for relevant experience. In this case, you should investigate if the accountant has experience working with small businesses.
Some accountants have only worked with corporations. They may not realize that small businesses can do accounting differently.
Business needs are different depending on your industry. If your chosen accountant has specific experience in your industry, it is usually helpful. An accountant with experience in your industry:
More experience is always a good thing, especially if an accountant has worked with comparably sized businesses in your industry. Be sure to ask for references from similar clients.
Chances are, you’re probably already using accounting software. The accountant you hire should already be familiar with the tools your business uses. If not, is he or she willing to learn them?
To save time and reduce the risk of errors, most of today’s modern accountants also use tools like payroll software. The software can automate tedious tasks, streamline reporting, and in many cases, enable employees to access pay stubs and tax information. But it can also cause headaches if your systems don’t mesh. Make sure all your back-office software is compatible with theirs before making a choice.
Make the accountant or accounting firm sell you on the fact that they’re good at what they do. A qualified accounting professional will help a small business expand over time. Strong financial management is one of the many steppingstones to business growth, and an honest accountant will be able to tell you how he or she plans to make that happen.
When you interview a prospective accountant, it’s important to understand how they might treat risky circumstances.
If your small business is brand new, it’s likely to have a lot more expenses than income. Is your candidate comfortable with that? How much debt might she suggest you take on to get your company on a firm footing? It’s important that your small business accountant has a spirit of entrepreneurship and is willing to weather the challenges of a younger company.
Another consideration is how risky or conservative candidates are when it comes to everyday decisions like small business tax deductions. Point out a few deductions your company could claim: Do they tend to be reckless, overly conservative, or somewhere in between?
You may not find an accountant who’s exactly as risk-averse as you, but it’s important that you’re both in the same ballpark. That way, there aren’t major disagreements down the road.
Who at the firm will take care of your tax work? Is it the main accountant, or will they be passing you off to a junior colleague? You should know who's looking after your books.
Preparing your return is an important job, but what if you need help outside of tax season? Can you consult your accountant? Will they give you advice on how to grow your business? Will they keep an eye on your books for financial problems? Can they warn you when your cash flow is getting tight?
Finally, ask yourself how you feel after meeting an accountant. This person is handling some of your most important financial work, so you need someone you trust and have a good gut feeling about.
Accounting services are generally priced in two different models. Hourly and fixed fee.
In the hourly model, the firm can be rewarded for being inefficient.
In the fixed fee model, you need to ensure that they don’t cut corners. You need to invest time in creating a clear scope of work and ensure that your entire scope is included in the fixed fee quoted.
In the fixed fee model, out of scope items are usually priced on a project basis
How often will you speak with your accountant? Can you reach out by phone or email any time you have a question, or do you need to book an appointment first? Do you need to pay every time you speak with them?
There are significant advantages for clients who decide to outsource their accounting tasks. To begin with, cost-efficiency, and ending with flexibility in terms of contracts or scaling the number of functions.
We help high-potential entrepreneurs in creative industries be successful without the stress and yawns of traditional financial management. We are the strategic voice for growth and the daily doer of the stuff you don’t want to do. Soup to nuts - we got you covered, all for a fixed monthly fee. All backed by many years of experience working for firms just like yours. Filing Taxes is a reliable accounting service provider to small and medium-sized businesses with clients from all over Canada. Feel free to contact us through our website filingtaxes.ca or reach out at 416-479-8532. Schedule your tax preparation appointment with us and take the first step towards proper management of your finances. Our professional personal tax accountants will make sure to get you the maximum tax refund on your personal tax return.
Disclaimer:
The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
A question all businesses face when they are looking to purchase new business equipment – should we lease or buy in terms of taxation? What’s the best plan of action, when it’s time to upgrade equipment?
Leasing your business equipment in Canada safeguards your capital, cuts red tape, allows for quick and easy upgrades — and offers significant savings at tax time.
Leases and loans are treated very differently by the CRA (Canada Revenue Agency). Two of the most significant differences are found in monthly payment deductions and how you claim Input Tax Credits. Some businesses will benefit from larger, short-term tax rebates and some will benefit more from smaller rebates over a longer period. Either way, leasing can help bring down your tax bill.
If you own the asset, you will deduct capital cost allowance (CCA) or depreciation for tax purposes. This is the percentage of the asset cost you deduct from taxable income each year. The maximum percentage of the asset cost that is allowed to be deducted through CCA is dependent on the type or class of asset that was purchased. If bank financing is used to finance the purchase, only the portion of the payments relating to interest is tax-deductible. If you lease the asset, regardless of whether it is classified as an operating lease or capital lease for accounting purposes, the lease payments (principal and interest) are tax-deductible, as Canada Revenue Agency does not differentiate between an operating lease or capital lease.
If you own the asset, depending on the asset class for tax purposes, the first few years (other than the first year with the half-year rule), may provide a larger tax deduction than later years, as the cost base decreases over time while the lease payments remain consistent.
Two leasing-specific deductions that deliver valuable tax savings for your business.
When you make an equipment purchase (with bank financing or as a cash sale) you pay the full amount of Sales Tax (GST/HST/PST) due on that purchase at the time of the sale. Your business will then claim one large ITC on the purchase in that tax year. No further ITCs can be claimed on the purchase in subsequent tax years – even if your business is still paying down the loan. Note that if your bankrolls the Sales Tax into the loan amount, this benefit is usually eliminated.
If you lease the same piece of equipment, you do not pay the Sales Tax upfront, but instead, pay a small amount on each monthly lease payment. This means that each year you continue to hold the lease you can claim an ITC on the Sales Tax portion of the lease cost. It can also mean paying less tax overall if you upgrade or trade-in equipment before the end of the lease, as you will only have paid taxes on the equipment for the time you used it.
If you take out a bank loan for equipment purchase, you will be able to claim a deduction for the interest portion of your loan payment.
If the equipment is leased, CRA lets you deduct your entire lease payments for the year on your year-end tax documents.
The reasoning behind this comes down to how the CRA views the two types of financing. Leases (even Lease to Own agreements) are considered operating expenses, while bank loans are viewed as capital expenses. So, when you lease your equipment, you can deduct the total lease cost as an operating expense. Only the interest on a bank loan is viewed that way — not the portion of your payment that goes toward the principal.
A somewhat common exception occurs with passenger vehicles. Be aware that passenger vehicles are taxed differently than other businesses equipment. You can still deduct part of your lease payment, but the deductible depends on the percentage of business use versus personal use. For example, you have a truck with your business logo on the side, but it happens to be your personal evening & weekend vehicle as well. CRA will let you write off a portion of your payments, but not the whole, as it will be considered split usage and you can’t write off personal leases.
Don’t overlook the small stuff for tax savings. All leases for business equipment can potentially offer deductions. Leased computers, security cameras, printers, and even cell phones all qualify. As with passenger vehicles, only deduct the business use portion of the costs. For example, if you use your cell phone for business about 70% of the time and personal calls about 30% of the time, you can claim 70% of the lease cost on your business taxes. This can become a grey area for small business owners who work out of their homes. If you have a separate building for your business, CRA will assume all equipment in that space is used exclusively for business purposes. However, that same equipment used at home may be flagged if it is claimed as 100% a business expense. Talk to your accountant and work out together what percentage is reasonable to claim in your circumstances.
As with all financial matters, it’s important to talk to your accountant throughout the year. Planning and goal setting can go a long way toward good financial health for your business and a smaller bill at tax time.
Lease commitments: Deciding whether to lease or finance new equipment purchases should be done in cooperation with your banking institution. Depending on potential financing covenants (restrictions), the addition of lease obligations can have significant implications for any pre-existing financing requirements. While an operating lease will not show on your balance sheet as a liability, there is still a "commitment" to make payments over the lease term. This commitment to payments is an important factor to most lenders and should be discussed before making any decisions.
Interest rates: Interest rates are a function of risk assumed by the lender. The more security a lender takes reduces their risk and, as a result, should reduce the reward and interest rate charged. If less security is required, the risk to the lender increases and so too does the required return and interest rate charged.
Timing of acquisition: The purchase of a piece of equipment allows for the full amount of CCA to be deducted from taxable income in the year of purchase, regardless of the timing during the year. For operating and capital leases, only the lease payments paid during the year are deductible for tax purposes. This fact will impact the decision on whether the lease or purchase option provides the lowest overall cost. The example above assumes that the acquisition and leases were made at the start of the year.
Financing your equipment can have a significant impact on your bottom line. As with most tax issues, there are many variables and not all businesses are the same. Be sure to consult an expert accountant to find out how these benefits can be used in your business’s unique situation.
Find how leasing can help grow your business! Give us a call or fill out our form. Filing Taxes is an accounting firm operated by professional Accountants in Toronto & Mississauga who specialize in helping individuals and corporations reduce taxes and tax planning. Feel free to contact us through our website filingtaxes.ca or reach out at 416-479-8532. Schedule your tax preparation appointment with us and take the first step towards proper management of your finances. Our professional personal tax accountants will make sure to get you the maximum tax refund on your personal tax return.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
Virtual accounting can easily sort out the financial foundation of your business in a hassle-free manner. virtual accounting stands out as the best way to save time. Opting for virtual accounting services is an excellent way to have good control over your finances. You maintain your accounting books perfectly when you have virtual accounting beside you as you don’t have to sacrifice your resources and time.
Most of the Canadian businesses that are engaged with virtual accountants are taking advantage of their efficiency, flexibility, and cost-effectiveness. If you are self-employed or run a small business in Canada and cannot manage your accounting & bookkeeping tasks yourself; you need a virtual accountant who can save you from hiring an expensive on-site accountant.
Virtual accountants are more adaptable and easier to work with. Virtual accounting can save money while providing greater flexibility and convenience. If you’re considering partnering with a virtual accounting team, you probably want to know what benefits you’ll get for your money. Let’s dig a little deeper into the biggest benefits of virtual bookkeeping.
Virtual accountants use cloud accounting tools where your bank statements are synchronized with cloud applications. Cloud Accounting applications allow both virtual accountants and their clients to collaborate on their accounting records without being present in the same city, town, or State. Your financial decisions are more accurate as they are based on the updated financial figures. At Filing Taxes, we prefer to use QuickBooks Online (QBO) which is a powerful cloud accounting solution.
When you choose virtual accounting solutions, all your documents will be available online. This will lessen the offline work, and the paperwork will also be less. Your employees can access the documents from anywhere and anytime whenever they require them. Apart from that, it will also allow them to manage their work efficiently and effectively. The data you need is always at your fingertips when you need it – You’ll enjoy real-time, accurate financial reporting.
Providing your accounting-related work to a third-party or virtual accountant will enable your staff members to concentrate on other pressing matters. They don’t have to take care of the extensive data and analyze it because the virtual accountant will take care of it. You will also get the chance to save time and energy and do something productive that will benefit your business greatly. As you operate in a competitive business environment, you need to focus on expanding your business for that your mind must mind should not be stuck in monotonous bookkeeping tasks. Once you outsource the bookkeeping and accounting services to a virtual accountant, you get more time to focus on other important functional areas of the business.
Businesses are always looking for cost-cutting solutions, and virtual accounting services can be one of the best options for them. Virtual accounting services provide the flexibility to work with accounting professionals outside your geographical area, making it easier to find the right fit for your needs and your budget. hiring an in-house bookkeeper puts a huge dent in your finances, as you have to invest in infrastructure facilities to accommodate an employee in the firm. On the contrary, when you outsource accounting services remotely, you only have to pay for the services rendered. you only have to pay a lump sum payment for the services that you have used.
Businesses are always looking for cost-cutting solutions, and virtual bookkeeping services can be one of the best options for them.
When you opt for virtual accounting services, your business will benefit in many ways, such as technology, time, labor, space, cost, accessibility, etc. This will increase the company’s profitability as the employees will concentrate more on the main job, instead of doing other tedious work. This way, your company will grow, and you will surely reach all your business goals in time.
Virtual accountants will help you reduce your overhead costs. They can analyze your expense accounts, perform the budget variance analysis, prepare a trend analysis of your operational expenses, and identify key areas where you can apply cost reduction policies and increase profits.
Since sensitive client financial information is often stored in the cloud rather than in traditional filing cabinets, or servers located in a physical office, information is more secure. Access to cloud storage systems is heavily encrypted and backed up across multiple locations.
A virtual accounting department helps you leverage technology to make the most of your bookkeeping software. – Instant, 24/7 access to your financial data from a secure Internet connection is just the start of the advantages virtual accounting offers when it comes to technology.
Accounting is one of the most innovative and technology-oriented industries. From artificial intelligence to blockchain – all the latest technologies have been adopted by the accounting industry. With the help of the latest bookkeeping software, the level of bookkeeping services can be elevated a lot. when you hire a virtual bookkeeper, you will get the latest technical support without spending extra.
Your in-house bookkeeper is going to work on standard working hours only, and for overtime, you have to pay them more. But, it’s not the case with virtual bookkeeping services; if your virtual company agrees to complete work on a certain date, they will do so. It doesn’t matter to you how many extra work hours they put in – you will get your work done on time. Virtual accountants adapt to your schedule and give you greater flexibility.
If you want to grow your business, you have to set a strong financial foundation, and undoubtedly, virtual bookkeeping is the way for it. From time flexibility to professional services, you can gain numerous benefits from virtual bookkeeping services. Clients that consider hiring virtual accounting firms that use secure software have been more successful at growing their business, increasing revenue while reducing the cost for these services. So, don’t think much and opt for virtual bookkeeping for your better future.
The time to move your back-office functions to an experienced team of virtual experts might be now. Filing Taxes is an accounting firm that has its own physical offices, but we also provide accounting & bookkeeping services on a virtual platform. Feel free to contact us through our website filingtaxes.ca or reach out at 416-479-8532. Schedule your tax preparation appointment with us and take the first step towards proper management of your finances. Our professional personal tax accountants will make sure to get you the maximum tax refund on your personal tax return.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
If you are planning on incorporating your business in Mississauga or anywhere in Canada, one of the most important decisions that will take you in the right direction is to find the right professional accountant.
An accountant is well equipped with all the latest rules and regulations. Hence, he is in a better position to assess your individual and family tax situation and give you personalized tax advice and appropriate corporate structure. Once your accountant is aware of your tax situation, he or she can work out the exemplary business structure ultimately mitigating your tax burden. He will consider various factors for tax planning like income splitting with your family, who will hold the business control, and how much control every member should retain.
An accountant after thoroughly assessing your situation can advise you whether incorporation as a holding company will help you shield your profits. He or she can explain other options like setting up a family trust to help your corporation achieve more profits. If you need to know something you can contact an accounting firm to get the help needed.
The four main objectives of structuring a family trust when used in conjunction with a corporation are:
When a corporation introduces a family trust, the value of the business must be evaluated by a valuator. This value is accredited to the founder’s utilizing special shares (usually an estate freeze). This authorizes the beneficiaries of the trust to benefit from the future growth of the corporation.
Establishing a family trust is a far more complicated and detailed process than it looks like in the above paragraph. Before further pursuing a family trust in conjunction with a corporation, take on board a professional accountant in Mississauga to have an expert’s eye on the whole process and get some valuable advice.
A minute book is a collection of important documents that prove the status of your business as a legitimate corporation. The typical components of a minute book are:
Your books can be maintained by a bookkeeping expert and it is good to give them the books.
It is mandatory to update your minute book after every annual meeting, or else you could face some significant penalties. Hiring an experienced accountant is one of the best investments you can make to avoid any unnecessary fines and penalties. He or she can professionally maintain your minute book and ensure everything is organized and updated and protect you from tax authorities. If you need further details about the minute book read my article “Incorporation Services in Mississauga”.
There are several factors to consider when deciding to incorporate your business. If you are still uncertain about incorporating your small business, our experienced and professional team at Filing Taxes is here to set you on the right path considering your personal business situation. Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.
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Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting firms and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
This is actually a common question, and it’s really important that you do it right. How do you do this, depends on various factors with your pre-existing business, as well as your new holding company.
You can surely transfer an existing business to a newly incorporated holding company on a tax-free basis by implementing a Section 85 Rollover.
There are few reasons that compel people to convert their pre-existing business to a new holding company. One of the primary reasons is that the business has grown. This alone can be a significant reason to switch the business to a new holding company.
There are a number of things to consider when looking at switching your pre-existing business to a new holding company. Below are the commonly asked questions from our clients when they reach out considering what is involved in making the transition to an incorporated company.
Can I use the same business name?
Yes, you can use the same business name as you are currently using, you just need to add a legal ending to the business name from these six options:
It is good to know in advance from an accountant about this kind of stuff so in the future you don't have to face problems or difficulties.
What other information is required to Incorporate?
Can a new person be added to the incorporation?
Yes, you can. If you wish to add someone as a director to the incorporation who was initially not part of your pre-existing business, now is the perfect time to add them. A crucial time for your company, so to get the knowledge from an accounting firm that what you are going to face.
In which categories of incorporation, we offer our services?
What changes are required after completing the incorporation?
We are here to assist you to make the process of converting a pre-existing business to a new holding company a seamless and, easy process where we move with you step by step through the incorporation process. We need more information about your business and its existing setup to guide you in more detail. If you need any further information and you are still uncertain about incorporating your small business, our experienced and professional team at Filing taxes is here to set you on the right path considering your personal business situation. Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.
Disclaimer:
The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting firms and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
If you are a member of a trade union or professional organization, you can deduct certain types of union contributions or professional membership dues from your income tax applications.
The amount of union fees you can claim is listed in box 44 of your T4 tickets or receipts and includes any GST/HST you have paid. You can claim these amounts as a tax deduction on line 21200 in your tax return.
If you are the primary beneficiary of the union contributions and your company pays them on your behalf, you are not entitled to a tax deduction, and you may have to pay taxes on this benefit.
There are different types of trade union and professional membership dues that you can deduct when filing taxes. You can claim your work-related contributions that you have paid or paid on your behalf and that have been included as part of your income during the year.
The CRA allows you to charge the following types of fees on your tax return:
It is important not to apply for the trade union tax deduction more than once. Your employer can show a trade union tax deduction on your T4 tax document, and you can also receive a tax document from the professional association or organization to which the contributions relate.
Make sure the amounts match and request them only once. The dual application of union taxes can result in a revaluation notice and possible fines and interest due. If you are still unsure about the process, you can get in touch with an accounting expert so he can tell you everything.
You should also keep in mind that if you are going to hire an accountant for your work, you should ask him/her for the bookkeeping tasks because mostly accountants handle these things and that is why they are called an accounting firm.
By the close of February, each employer must issue employees with earned income tickets from the previous fiscal year. The amount of union contributions eligible for tax deduction is shown on the T4 slip in box 44. You can apply for a tax deduction on line 21200 of your tax return, and if your employer is a registered GST/HST, you may be able to request a reimbursement of part of the union contributions.
You cannot claim a tax deduction for start-up expenses, licenses, special estimates, or fees unrelated to the company's operating costs. As an affiliate of a pension fund, you can no longer apply for a tax deduction for the payment of membership dues.
Prior to 2018, an employee who had previously paid taxes could be deducted as unpaid expenses for company employees if the total amount of contributions plus some various deferred expenses reached a certain level. The employee then deducted the contributions if he was able to write down the deductions.
On the occasion that an employee requests a deduction for professional membership or union contributions, some additional considerations arise. In general, although a particular job title need not be a condition of an employee's position for that member of staff to claim a deduction for related professional contributions, the CRA requires that there be some link between the employment and the association professional in question.
In some cases, the employer is willing to pay the cost of the employee's professional contributions as part of an employee benefit package. In this instance, the employer's payment of these contributions is not shown on the employee's T4 as a taxable benefit; the employee cannot claim a deduction for those costs. However, if the worker suffers a taxable advantage, he can, on line 212 of the return, request the deduction of any taxes or allowable taxes paid.
If you are required to pay professional membership dues as a condition of employment and your employer pays or reimburses them to you, you cannot claim a tax deduction on your earned income. Depending on who your primary recipient is, there may be a tax advantage for you. For example, if you are the primary beneficiary and your employer pays your contributions, you will have a tax benefit due.
The amount of the taxable benefit is indicated on the T4 slip in box 14 (employee income) or in code 40 (in the Additional Information section) of the T4 slip.
Whether you make an appointment with one of our experienced tax professionals or choose one of our online tax registration products, you can rely on us to help you determine if you can claim tax deductions.
Well, the first thing is don’t panic. There could be various reasons why a person wouldn’t have paid their taxes. You could owe a significant amount of money and not be able to afford to repay, business hardship, life threatening illness, paying taxes might have slipped out of mind due to any reason, you may not have filed your taxes at all. In any circumstance, if you owe a tax debt to the Canada Revenue Agency (CRA), this problem won’t just disappear.
Millions of Canadians file their tax returns late – and if you are one of them just get started with your tax filing. The longer you wait to come clean, the harder the CRA will hit you with penalties and interest payments, and the likelihood of the CRA seeing your avoidance as tax evasion increases. The CRA may not have contacted you yet, but it doesn’t mean it will never.
Late filing charges and penalties begin as soon as you miss the tax deadline (typically April 30 each year, for most Canadians) there is an automatic late filing penalty of 5 percent of tax owing. For each month you do not file, you are charged another one percent.
In case you did pay your taxes but less than the tax amount you actually owe, the CRA will charge the interest amount daily on the amount owing. These interests and penalties add up faster, which is why the only escape to harsh catch by CRA on late filing is to resolve your tax situation sooner than later. This is a very difficult issue to face so it is best to contact an accountant in advance.
If you have failed to file your income tax returns, GST/HST returns, or corporate T2 returns for several years, there is a remedy for it, even when many years have transpired. If the CRA has not contacted you regarding your late filings, you may be eligible for the Voluntary Disclosure Program. It is a tax amnesty program, which will allow CRA to waive some or all of the penalties and some of the interest levied. We can help you determine your eligibility for this program and submit your application.
It should be noted that this program may be utilized by a taxpayer only once in their lifetime (barring any other exceptional circumstances). This option does not apply to everyone and it does not reduce the overall amount that you owe. You are bound to show proof that you were unable to file or pay your taxes on time to apply for this program.
You may also be eligible to arrange a payment plan with CRA. However, to negotiate a payment plan with CRA, you have to provide many details about your financial situation, including your income, your debts, your expenses, and your assets. Using this information, the CRA will decide whether to offer you a payment plan and if yes, how much you will need to pay each month.
It is important to consider that CRA will not ever accept less than you owed to it. It will want its money first and prioritize it over your other financial obligations. For example, the CRA may instruct you to only pay the minimum balance on your credit card to apply additional money to your tax debt. This will shoot up your costs, as credit card interest rates are typically quite high.
Before you take any steps to deal with back taxes, it is important the services of a financial professional who understands Canadian income tax. With years of experience in corporate and personal tax law, Filing Taxes is your premier partner for all your tax needs in becoming up to date with your tax filing obligations and mitigating penalties through amnesty applications. Feel free to reach out to Filing Taxes at 416-479-8532. Schedule your tax preparation appointment with us and take the first step towards proper management of your finances. Our professional personal tax accountants will make sure to get you the maximum tax refund on your personal tax return.
As a business owner, you do it all. Do-it-yourself bookkeeping and accounting can help you through the early days of getting your business off the ground. But it takes away your time you could have spent on other revenue-focused duties.
Canadian business market has quite a diversity when it comes to small and medium entities. This is why we believe businesses of any size and stage benefit from expert accounting firms. Sourcing for an accountant for your business is a make-or-break process. You want an accountant who can help save you money and avoid potential issues with the CRA but can also provide useful insights for your business.
It can be frustrating as you sieve through the candidates to ensure that you get only the best. Business owners usually have trouble understanding exactly what an accountant or accounting firm can do for them. They are perceived to be as number crunchers instead a good accountant communicates what the numbers mean to owners.
To make things a bit easier for you, here are seven important questions you should ask any accountant or accounting firm you are thinking about hiring. So, shop around, interview accountants in Oakville to determine which one is the best fit for you and your business.
You want an accountant who has seen it all in the field. Hence experience is a crucial indicator of someone’s potential when sourcing for an accountant. Also you can go to an accounting firm. Ask about the experience with your type of business. Not all business types are handled the same from an accounting and tax perspective and having an accounting firm that understands your field is of great help. Accountants who work with the same industry and client types can do better in keeping on related news, laws, and trends.
Accountants bill their services differently. Accountants usually charge for the length of time the job takes. You should inquire about the fee structure before considering the services of an accountant or accounting firm in Oakville. Some accountants charge by the hour; others bill a flat rate. Ask how they charge their clients and the billing alternatives at your disposal. If you define your scope of work, it will help determine an appropriate fee structure that is conscious of your business needs.
Confidentiality is vital in this business as accountants are privy to sensitive financial information. This question assures whether the work styles of an accountant are compatible and establishes rapport. Considerations such as whether the accountant is focusing on cloud-based technologies, prefer face-to-face communication or support virtual work may all factor into your view.
Accountants will often outsource work to a third party. This does not raise a question on their quality of service, but you want to be sure they are forthright about who is doing the work. You do not want to honor a meeting in the future only to meet a stranger. In case you need to speak to someone about your finances, it will be difficult to communicate if you are not sure about whom you need to contact. It should be known to the accountant that you prefer familiarity as a basis for engaging their services.
Every interview you embark on should be geared towards growing your business. This question probes how the accountant perceives their role in your business. Visionary accountants can introduce accounting practices that steer your business to greater heights. A proactive accountant can help you grow your business. You only need to pay attention to the articulation of their thoughts on your business and the opportunities you are likely to capture from the market.
You do not pay to work with a snob. Ensure you can reach your accountant when you need to and will not be charged a ridiculous rate for a short conversation or out-of-hours advice. Do they cater only to appointments well in advance or do they respond to quick emails or other electronic modes of communication or even urgent texts? Also, enquire about their procedures to deal with any complaints.
Every tax season, businesses end up at odds trying to keep up with tax return requirements. Tax season becomes stressful as a result of not being able to timely plan and prepare in advance. That is why it is best to ask your accountant questions regarding their flexibility and ability to avoid last-minute rushes.
An accounting firm will help you gather tax-related documentation throughout the year in readiness for the tax season. Professional accountants keep a vigilant eye on changes in tax laws and procedures and proactively plan for them. They also do bookkeeping work almost everywhere.
The takeaway!
Remember, the right accountant is not just a number cruncher, they are one of the most important collaborators in your business. Whether you have worked with a professional for years or it is your first meeting, make sure you know what questions to ask your accountant. Nothing beats an honest conversation with a potential accountant before hiring. Your business needs a competent yet trustworthy accountant with the capacity to handle your financial matters with the utmost professionalism.
If you are looking for an International Tax Accountant in Oakville, Hamilton, Toronto, Mississauga or anywhere in Canada, then feel free to reach out to Filing Taxes at 416-479-8532. Schedule your tax preparation appointment with us and take the first step towards proper management of your finances. Our professional personal tax accountants will make sure to get you the maximum tax refund on your personal tax return.
Disclaimer:
The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
Every turn of the century is opening doors for rapid technological advancement, increasing dependency on technology to accomplish targets of our life. This drastic technological development is compelling everyone, from individuals to large entities, to look for technological evolution in every aspect. The tax world is no exception to it, where there has been an increasing shift in the usage of tax software over accountants.
In this phase of transition both the options of using either tax software or the traditional way of in-person interaction are working in parallel. Considering your personal preference and situation, you can determine whether to move on traditionally or adapt to the new wave of software application. Read on to look for the pros and cons for both options and compare both sides of the spectrum.
If you do not want to spend money on an accountant, tax software is a viable alternative. If you have a more complicated tax situation, you may want to hire a professional accountant because most probably he will also complete the bookkeeping tasks. The question of doing your own taxes using software or hiring an accountant will always exist and the answer to it will vary in different situations. Both are viable options. If you need any advice on tax-saving strategies from an expert tax accountant in Toronto, Mississauga, Oakville, and Hamilton feel free to reach out to Filing Taxes at 416-479-8532? Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from an accountant and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
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