In today’s business world, accounting is viewed as the most imperative language of business. It is an action whose vital role is to provide quantitative information mainly in financial nature regarding economic entities that are supposed to help make an economic decision. Having accounting in favour helps business stakeholders and other associated users make a knowledgeable judgment and evaluate better decisions through financial circumstances.
Regarding cost, earnings, profit, loss, liabilities or assets, accounting provides vital information for decision making, planning and controlling processes within a business infrastructure. Accounting’s main objective is to record financial transactions and precisely identify, track, record, organise and communicate financial information.
Why Do Small Business Owners Find Accounting Useful?
If you as a business owner have poor financial management, then not to mention, it is one of the most fundamental reasons for the failure, especially in between the first year of the business. Considering the limited budget and resources of small firms, that is the reason, accounting helps and plays a crucial role in the growth and development of businesses.
Highly-skilled business owners put financial information like records of business transactions, taxes, payrolls, projections, into one place and then spit it out to make it easy to understand the whole aspects about the financial state of their business.
Having an accounting process tells them whether or not their business is making any sort of immense profit, what’s their status of actual cash flow, value of their assets and liabilities, and which activity or event involves their business for making money.
We make unprepared financial information and accounting spit it out with ease for flesch, accurate and consistent financial reports.
Why is Accounting a Crucial Step for Small Business?
Pay attention to the following 4 major points
It keeps a record of the cash flow where the cash is moving because Cash flows represent the lifeline of any business and are also the survival. If not handled responsibly, cash flows can create a hectic challenge for you and your respective business. When you run into that dilemma, you aren’t able to pay your bills timely which increases the risk of decrease in its credit score or higher interest rates. You can prevent your business cash flow situation by implementing different policies for efficient record-keeping of financial statements.
In order to understand the concepts of fixed costs, it is basically the amount set aside to cover a probable future expense and often can be used by the management in decision making regarding expansion, cost reduction and increasing credit lines. Your small business relies on cost accounting. This way your legal provision amounts are estimated, allocated and are necessary for certain company expenses and repayments in the future. Having a systematic allocation of your finances doesn’t make you end up losing money unnecessarily.
There should not be any doubt regarding accounting. Why? Because accounting always gives you a better grasp of the well-being of your business. If you’re a business owner who is excited about the new organisation and thinks can handle the business properly. Soon you’ll realize that this wasn’t your actual cup of tea and consulting the superior for guidance is vital in order to combat the fact. After the accounting has been done, you can review it by learning to read a freshly-made balance sheet, income statement, taxes, and cash flow statement so that you can come to your rescue.
As a successful business owner, the key responsibility for growing your small business is to thoroughly review your financial statements regularly so that you can establish a detailed budget where your cash flow will move. However, doing this also allows you to discover operational inefficiencies and helps you detect and avoid frauds done by customers, employees and suppliers. When you understand this phase of business finance and dealings, you are better equipped with facing audits or scrutiny and also make you assured you are in the safest place without any flaws.
Hiring a professional accountant alongside your business can help you understand your real-time cash position, for viewing various accounting reports, creating expense claims, setting budgets and sending products invoices on the go. Benefits are many only if you think it would serve.
Living and working in the modern business world, as a business owner, you always want your business to grow and succeed into the next realms. Sometimes, small businesses are often troubled by the common problems, and the part of their problem is, they are just not strategically as smart, knowledgeable, precise and effective in all domains of the businesses they think are supposed to.
They generally believe that they can solve any sort of problem that occurs in a company’s accounts, cash flows tracks, lines of credits, billing and develop better financial communication between the staff and members. But at times, it won’t happen as per their expectations. And this lack of knowledge and ineffectiveness can lead to incompetent processes, errors, and missed opportunities.
It happens, and you don’t need to stress out for those reasons. We as humans have some strong as well as the weak spot in handling responsibilities, and it is alright if we are not well-formed for those tasks.
In such critical business areas, we’ve seen many business-owners often look upon their bookkeeper for well-furnished business direction and advice, and you are not that different from them.
So basically, when we look at those difficulties that affect small businesses processes, it is necessary to admire why it makes sense to hire a professional bookkeeper in your way like H&T Accountants to optimize your opportunities of growing the business. H&T is an expert in handling and managing simple to complex bookkeeping processes and understands how to meet the needs of precious clients via providing a viable solution that troubles your business.
Compiling and filing your small business’s past transactions, cash flow, accounts receivable, accounts payable, taxes, and payrolls can be a challenge if you haven’t kept your books updated diligently throughout the year. It can seem like an overwhelming job, and the situation may get even more stressful when things are moving against you.
With our acknowledged bookkeepers, we precisely counter checks every available information and data we got to map business performance and guard against any possible misuse so that it helps you provide valuable insight on how your business is performing. Our years of accounting practices help detect fraud in a short time, which keeps fraud cases in companies controlled and minimized. In that sense, transparency serves massive benefits to make you stay on top of your accounts and make you improve cash flows and file your taxes, payrolls more smoothly and accurately.
Provisions Data for Accounting:
Provided crucial data by the Bookkeepers are an amount set aside to cover a probable future expense and often can be used by the management in decision making regarding expansion, cost reduction and increasing credit lines. Often provision amounts need to be estimated and are necessary because certain company expenses and payments are allocated/reserved from profit for a specific purpose for the particular year, making the company’s financial statements more accurate. It is not savings, but a probable amount set aside to be spent either way.
Take it for household expenses, where you have to set aside funds for unscheduled repairs. We don’t even know what exactly these repairs will be for, nor the precise costs associated with them, but we do know that repairs will be needed at some point and money will need to be saved for serving that purpose.
Uncontrollable company’s finances:
You often find it difficult to understand how startups and small businesses work to take their business to the next level? There should be no doubt, they do face many challenges on a daily basis, and accounting-related tasks are some of the most important they struggle with the most. They take the necessary steps to figure out the issues, and most of the time that could be due to the result of not having a clear idea of their company’s finances.
Why? Because when you don’t know what your current financial situation is, it’s hard to acknowledge whether to take more risks, hire additional employees, or buy further equipment or not. It’s a clear sign of business insecurities and much more. When your books records are up to date, you may have a better idea of your company’s real financial situation in the present and more effectively predict the future one.
Taking a Break:
Now, this is important because as a small business owner, your work schedule would be 24 hours a day, 7 days a week and 365 days a year. But working so much without taking a break can cause poor business decisions, interactions, responsibilities, remuneration, and limited growth. Seriously life is all about balancing what is important and therefore, you need to have resources you can turn to help manage the various aspects of your business, so you don’t have to do it all yourself.
Outsourcing a knowledgeable Bookkeepers outside a company is best in terms of business to responsibly perform certain duties that traditionally were performed in-house by the company’s employees and staff. Hiring the professional one just basically frees up your valuable time, so you can keep track of those tasks you do best like running and building your business.
Bookkeeping is a legal requirement that must be met by any small/large organization to help boost reputation, track bank balances, money owed and due dates. Hiring a Bookkeeping is a must and don’t think maybe you hire one for a short term. You may not know what situation may prevail afterwards. So, it’s better to inspect things before proceeding because outsourcing your bookkeeping will be your worthwhile investment in your business that can lead to massive future business growth for the long term.
Many a time, we have seen small business owners who recently started their business only hire Accountants when under the pressures of notices received from the government. They will never seek these dedicated services, specifically if the government did not require them to file any returns. No government insists businesses have their returns prepared by certified accountants. However, the returns prepared by accountants have more credibility and are less vulnerable to audits.
In the meantime, if you ask an accountant casually whether or not you should work with someone to track records and prepare their returns professionally, their answer most probably will be “yes”. Merely to help you manage your business better, increase the revenues and decrease the costs of your business, enhance your profits, improve the cash flow, manage invoices, expenses, and taxes and finally, develop a budget that stays on course.
The certified accountants are hired on most certainly areas to help and guide you generate a feature-rich solution to manage core accounting, effective marketing and financial operations and also to help you identify and remove the roadblocks from losing the track.
These are not for the sake of their own benefit as it doesn’t make any sense, but for the nitty-gritty requirements of the business based on trust and revenue. Most successful business owners will tell you an accountant is an absolute must to hire. Whether someone believes it or not, many small businesses, in fact, say they see more leveraging success with an accountant or an advisor because they help out at various stages during the growth of your business. Not in just handling your payroll and tax returns, but a lot more.
So when should you consider hiring an accountant for your small business? The answer is it actually depends upon you because hiring an accountant is determined by the stages of your company’s and its growth. Now that doesn’t mean you need to employ them full-time or on a temporary basis. Sometimes having their presence and giving just a couple of hours to your business will be enough, which ultimately could save a lot of time, money, efforts and headaches. Waiting so long to ask for help is a waste of your time and your business. Therefore, never be without an accountant.
Let’s have a glance at some of the worth-considering pick how Accountants help every SMEs on their way:
Growing the Smarter way:
We certainly hope your business is growing and behaving well and having a consultant with certified Accountants makes you sure that leverage is on your way in every aspect. Meeting your Accountant on a regular basis can help you avoid growing your business smartly, affordably and in legal order.
Complex payroll issues.
Payroll or calculating the employees payments is a complicated and a mind-boggling error-prone process and is better to leave that in the hands of Accountants. These challenging compliance issues can sometimes sink even the most profitable businesses around the world. It’s better to have a touch of accountant hands to be that shoulder for you when required in order to handle existing and futuristic complex payroll processing issues.
Write your business plan:
Seems to be legit and one of the necessary one. If you want to move beyond a one-person model, organizing the strategy and tactics for the business expansion and set objectives for growth is vital to make your business look legit, professional and polished. Not to mention, it is one of the legal and ethical practices to CPA transparency, reporting, and taxation for the taxpayers.
Opting you with appropriate licenses:
If you are wondering whether your business requires consent in order to operate legally, then obtaining the proper business licenses and permits is a critical step in starting a one. A Certified accountant can help you untangle all of the complexities to make your business an official legal entity and also make sure you start your business with the proper foundation without fear of being hit with a fine or close down.
Strongly know your business blind spots:
In spite of the fact that small business owners know their businesses a way better than anyone else, but still sometimes due to workload pressures and responsibilities it’s hard to see what’s going behind the scenes. By hiring an accountant, no one can hide from their sight as they in return help you take a look at the big picture of your business, making it prone to striving for growth.
There is still a lot more to learn about what a certified Accountant can do. To find more on how we can help you, look at the listing of our trending Services. We are H&T Accountants located in Mississauga and Brampton, Ontario, servicing these and surrounding areas of the Greater Toronto Area (GTA) such as Milton, Oakville, Georgetown, Etobicoke, and Vaughan. Any business type it can be – whether it is a smaller, medium or a larger one – we can prepare any legal reports you need to file with government departments and CPA’s regarding income tax, harmonized sales tax, workplace safety insurance, and complex payroll. Last but not least, we are here only to be the right hand to support and enhance the management and profits of your business.
Typical individuals think that creating and maintaining business processes sounds easy and those professional business owners only need to target a well-defined market where potential customers can take relevant products and services from them and after all make an enormous profit. What some people don’t know is that there are numerous tasks and responsibilities that today’s business owners face, especially if we talk about sales tax.
Deciding to include audit defense with your filing is a great choice for today’s business owners! Now, before, moving further, let’s put a glance on what Audit defense really is and how you can be benefited to help if your state taxing authority or the IRS audits your tax return.
Audit defense also called Tax audit representation is a service in which a legal tax professional stands in on behalf of a taxpayer throughout an IRS or state income tax audit.
They guarantee that a certified tax professional helps you understand legal information of the IRS and also help you draft response letters, so you can deal with the audit effectively and efficiently.
In those nutshells, individuals undergoing an audit need to transfer their legal business personal records, including the businesses you own, receipts for rental houses, and various other forms that you need to fill out your taxes throughout the audit process.
This is the possibility that can help them ensure the safety of their businesses by strengthening their sales tax audit defense in order to eliminate charges against you and your business. If you ever get caught in those audit issues, be prepared to resolve your tax issue with a professional tax auditor.
Tips on how to improve your sales tax audit defense.
Tracking sales transactions:
Monitoring the incoming and ongoing sales transactions within the business strongly ensure the tracking of items and other services that are indulged under the taxes. This also acts as an advantage for businesses owners especially the workers who steal items.
Preparation of sales documents:
Preparation of documentation about their sales is mandatory for accurate sales tax in order to avoid certain issues in terms of their business. This is crucial even if some of the items and services offered are exempt from the law.
Creation of a solid sales statement:
In an intense case, if the required documentations are not enough for the scrutiny auditor, as they are designed to ask relevant legal questions, then make sure to be confident to provide good rationalising behind the items and services that have been taxed and exempt from the law.
The time required for an audit varies based on several factors, including the type of audit, the complexity of the problem, the availability of the necessary information, if possible one can hire a professional in creating a solid plan and making decisions for your sales tax.
These authorities can consult your legal documentation and help you deal with the things that are necessarily required and also help you learn more about sales tax to improve your plans for the future.
In recent weeks, we brought to your attention about five Government Assistance Programs.
EI & CERB seems to be working well by now. Most of the eligible employers have started receiving these funds. CERB now allows you to earn some additional income to complement your $500 benefit.
The CEBA & TWS also seem working well. Most of the eligible employers have started receiving these funds.
Employers can start applying for 75% Canada Emergency Wage Subsidy (CEWS) starting today. Some of you may recall the employees you laid off earlier. If you now give them less hours than you gave in Pre-COVID time, the subsidy may work out to 100% of what you pay. Corporate owners on payroll may qualify.
Also coming on board is a new program, Canada Emergency Commercial Rent Assistance (CECRA). This will help tenants pay 75% of their rent for 3 months. The key eligibility criterion is that your revenue must have declined at least 70% from the Pre-COVID-19 levels. And those levels should be less than $50,000 per month. Government covers for the 50% of the rent; landlord takes 25% less and you pay 25% of your rent.
Should you need our help to follow up on any of these programs, please do contact us.
When we start our own business, we do most things ourselves because of the new likeness and excitement which urges us to handle things on our own, even the things we don’t like, including the bookkeeping, and is not a task that comes easy. This is because you would not only have to deal with getting someone who can perform the tasks that you need to be done like keeping your accounting books well-maintained in an accurate manner because you think you have a grasp of the basics of businesses.
Here are 3 most common bookkeeping mistakes small and new businesses often make, along with our handy suggestions about how to avoid them for long-term business growth.
Putting off Bookkeeping Process:
Sounds fun, but it’s not! If you’ve decided to handle those looming and deadlines tasks, then better be prepared for the consequences. Sooner or later, there will be an overwhelming sort of tasks which you need to update. The things can go even worse when you won’t have a clear idea of what’s happening in your business. And soon HST and tax deadlines are looming, and you aren’t ready.
The best thing you can do is put some effort to update your financial information in your dairy and check that you understand what your figures are actually telling you without doing minimum fuss and duplication.
Mixing both business & personal spending:
Thinking of mixing both business & personal spending is actually not a good idea to consider. It’s easy to lose track of what you have done so far as it creates a mess and confusion towards you, and soon you can find yourself out of nowhere.
In just a few days you will begin to struggle to remember all your relevant bank or credit card statements which were necessary for your business, and wasting a lot of time is another task which will frustrate you from inside.
Our recommendation is to go for a separate business credit or debit card so that you will always have a clear view, record and track of your business-related spending. Another benefit which you will get is it helps to avoid tax return mistakes.
Intricate Cash Flow:
Not collecting your receipts and purchase invoices might lose you a clear view of tracking your business cash flow. Not correctly coding all your income and expenditure creates unuseful reports for you and your business which will devastate business in the long run.
Well, it is advised to always keep an extensive record for your business receipts from the biggest to even the smallest expenses as it will help to reduce your HST and tax bills. But it may come handy during scrutiny as HMRC could ask to scan your receipts reports.
For business proprietors and partners and their spouses we do have some time before filing their returns.
For others we are running short of time; deadline to file this year is June 1st.
For many of such clients, we have already filed the returns. But some clients have yet to provide us their documents (tax slips). We do have your T4s and T5s if we prepared these slips for you. But you need to provide us other slips you may have.
Tax Planning takes time but can save a lot of taxes, many times hundreds of dollars and sometimes thousands. If you bring your documents close to the deadline, we will not have enough time to do proper planning.
To save you maximum taxes we request that you provide us your documents soon. Send these electronically or drop these through our office door slot at any time of your convenience. Alternatively send these in the mail. These days we do not meet our client’s in-person for reasons known to you.
A large Employer subsidy program CEWS has just started. It will give you 75% of the wages that you pay your employees.
People who have taken CERB will not qualify for CEWS. You may like to pull yourself out of CERB and go on CEWS. Those who got CERB without being eligible, should also do so.
There are many Assistance Programs to help businesses cope up with Covid-19 damages. Only some of the programs may apply to your business. We are helping our clients to maximize their benefits. We do so by matching program eligibility criteria with your business situation.
A key parameter in matching is your Current Operation (CO) Level. For example, your CO level may be about 80% of the Regular Operation (RO) level. This represents an almost fully open business. At 20% level you will be almost fully closed. A partly open situation may be at 50% CO level. We would like to know your approximate CO level.
We would also like to know your Revenue in January, February, March and April. We have now prepared the attached Form to get your answers.