Skip to main content Skip to search

Archives for Accounting

Why Your Profits Might Not Be Increasing As Your Business Grows

business grows

As your small business continues to grow, so do the customers and sales. You feel like all that hard work is paying off until you see your profits. You’re shocked that they do not match the growth of your business. Now, no need to worry this simply just means that you need to examine the following areas to address this issue.

Investing back into your business

It’s an intelligent move to invest a fraction of your profits back into your business to help it grow. The best growth strategies – especially fast ones, require you to spend some money. This consists of marketing materials, ads, branding, and many others. However, it’s still important to track costs and make informed decisions to get a reasonable ‘Return on Investment (ROI).

For the majority of businesses, it is recommended to allot 5% of your revenue to your marketing budget. Although if you are starting out this might not be enough; businesses that are newer usually have to spend more capital toward marketing in order to get themselves off the ground and build a loyal customer base. Many of these costs can include; buying website domains, designing a logo, and buying ad space to target your ideal demographic.

When it comes to accounting, the money spent on marketing and promotion will be counted as an expense that will impact how profitable your business appears. But they are not thought of as a “pure” expense. They’re more an asset as they provide you with an economic benefit and a clientele that will help your business grow. These costs can be thought of as a fundamental investment. Like any investment, you can be carefully tracking your ROI (or return on investment) and making adjustments when you’re not getting your money’s worth. For example, if you’re paying for an ad on Facebook and you’re not getting the clicks and traction you hoped for, it may be time for you to reconsider your strategy and assign that investment money elsewhere.

You are not tracking your fixed costs

Your fixed costs or also known as overheads are the consistent operating expenses of your business, they can be one of the major reasons why your profits might not be matching your growth. Some fixed costs can include:

  • Government Licenses or Permits
  • Utilities
  • Insurance Payments
  • Rent

A great way to know the expense of these fixed costs is to have a clear picture of the company’s financial records. This allows you to work your way through and track your profits, expenses and many more. Knowing this can allow you to come up with a budget and cut down or eliminate unnecessary fixed costs.

Team Growth

It is a great and exciting experience to bring in your employees as they are a great way to grow your business. But, keep in mind as your business grows so does the team and along with this, you are tied to more expenses. This could mean marketing materials and hiring new staff and this can have an impact on your profits hence why your profits might be the same or even less as you grow.

With a growing team it is similar to overhead costs, not only are you paying more salary every month you’re also spending money on the time and equipment it takes to train a new employee.

Here at H&T for hiring, we recommend a similar mindset as expanding overhead costs: growth for the sake of it is expensive. But bringing on new team members to match the load of your work and business size is both a great and wise investment.
If you still have a hard time setting your profit goals or how to cut down on expenses it might be a good idea to consult with H&T Accountants and/or a financial advisor. Doing so can allow you to maximize your profits.

If you are looking for more money advice or how to grow your business or even want to learn the basics of accounting and finance follow our blog and stay in touch!

Read more

Home Office Expenses For Employees

personal tax return

Are you someone who is looking to claim personal tax? Have you thought about hiring an accounting service to help you file the claim? If you said yes to both these questions then keep scrolling down because we have got you covered.

Why Should You Claim A Personal Tax Return?

Home office expenses are usually claimed on a personal tax return. The deductions help in reducing the amount of your income that you pay on the tax. This means that your overall liability on income tax also gets reduced.

What Is The Temporary Flat Rate Method? How Is It Calculated Through Accounting Services?

A temporary flat rate method helps in simplifying your claim for a home office expense. This includes the home expenses, the office supply, and the phone expenses all at the same time. So, if you are someone who is still working half the time from home, you can easily claim $2 for every day you worked from home. The period of working from home should at least be four consecutive weeks after the pandemic hit the world. As an individual, you can claim $400 at maximum for working from home under the home office expenses for employees working through COVID-19. Just keep in mind that this method of calculating the claim would only work after 2020.

Here Is How You Can Easily Do Auditing Yourself And Calculate What You Should Add To This Claim:

  • Do not calculate the area of your working space.
  • Do not keep any supporting documents with you.

Here is how your employer can calculate the claim by not doing the following:

  • They do not have to complete the form or sign up at T2200S or T2200 like employees.

Here are a few easy steps to help you find out if you are capable of filing for the claim or not:

  1. Find Out If You Are Eligible

You can easily find out whether or not you are eligible to file for the claim.

  1. Fill Out The Form

When you start filling out the form, you need to calculate the total number of days you worked from home in the year 2020 when the pandemic hit the world and then multiply the total number of days by $2. Remember that you can only go up to $400 for the claim you are seeking in return. So, the maximum number of days you worked from home can only be 200 days.

  1. Determine An Appropriate Number Of Days You Worked From Home

The best way to calculate your total number of days is by using the temporary flat rate method. Just follow the process and then attach the form to your income tax return.

  1. Claim The Deduction On Your Tax Return

In the form, you will see Line 9939, you should add the claim amount over there with your other home office expenses.

Did you find this article useful? Let us know in the comments below.

 

Read more

How Accountants can Help Your SMEs

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.

Read more

Tips on How to Improve Your Sales Tax Audit Defense

Audit Defense

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.

Read more

All clients – CTS – Coping with Financial Damages Caused by Covid-19

Dear Clients:

We would like to inform you of a couple important developments on the Government Assistance.

On the CEBA program of $40,000 interest free loan, they have started taking the applications today. You can only apply online and through the bank you have a business account with.

The wage subsidy program has been split into two, Temporary Wage Subsidy (TWS) and Canada Emergency Wage Subsidy (CEWS)

The former program gets you 10% subsidy and the later one, 75% of the wages you pay.

They have yet to start taking applications on CEWS.

Let us know soon if you need more details on these programs.

Teji Singh, Manager

H&T Accounting Service

T: 905-858-0775

F: 905-858-8645

Web: https://www.handt.ca/

Read more

Updates on Major COVID-19 Government Assistance to Small Businesses

We hope this message finds you in good health.

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.

Teji Singh, Manager

H&T Accounting Service

T: 905-858-0775

F: 905-858-8645

www.handt.ca

Read more

Tax Returns Documents (Tax Slips)

Dear Clients:

We hope you are in good health.

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.

Teji Singh, Manager

H&T Accounting Service

T: 905-858-0775

F: 905-858-8645

Website: www.hAndT.ca

Read more

Understanding CERB and CEWS

Dear Clients:

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.

Please complete the Form and send it back soon.

Teji Singh, Manager

H&T Accounting Service

T: 905-858-0775

F: 905-858-8645

Site www.hAndT.ca

Read more

New Procedure to Exchange Information or Documents (IODs)

Dear Clients:

Due to COVID-19 we have not been meeting client’s in-person since last week of March. But we have managed well using emails and phone call to exchange Information or Documents (IODs).

Even if some restrictions are being reduced by government, Social Distancing is expected to remain for a while. We are afraid we have to continue these procedures to exchange IODs.

Some clients had to provide us packages containing hundreds of documents. At our request they dropped off such packages through the slot in our office door. We want all clients to know of this procedure.

Anybody including the couriers can drop off document packages at our office in a bin placed on the office stairs. You can do that any time in office hours. The other drop off alternative is through our office door slot; this can be done at any time.

For providing us information on a few pages, you can use E-mail and that on many pages; use a service like Google Drive or Dropbox or OneDrive.

Teji Singh
TEL: 905.858.0775
FAX: 905.858.8645

Read more

Coronavirus – COVID -19

We are all going through tough times brought upon us by COVID-19.  We hope you and your family are all well.

Health departments and professionals are helping you by informing on health matters; and Finance departments and professionals, on economic matters.  We as accountants want to help you in ways we can.

Most of you own small businesses. So, we undertook to help you with 3 major economic programs set up by our governments recently.

For the employees who have lost their jobs, the usual route of Employment Insurance (EI) is already there; a new route Canada Emergency Response Benefit (CERB) is being setup.

This will give $2,000 monthly to self-employed owners and contractors.

To help employers pay wages, a program called Temporary Wage Subsidy (TWS) is being setup.  Employer can get up to 75% of their wage expenses paid by government.

To ease cashflow of businesses, Canada Emergency Business Account (CEBA) program is being setup. This will give your business an interest free loan of $40,000 and $10,000 of this amount may not be even repayable.

Eligibility Criteria and Application Forms for these programs should be ready within a week.  We are watching the developments closely and continuously.  Let us know if you need our help in applying for EI, CERB, TWS or CEBA.

We also want to let you know that we have extended our restriction on in-person meetings to April 13th. But we are open for business using email and phone during regular office hours.

Stay safe and stay well!

Teji Singh, Manager

H&T Accounting Services, Mississauga, ON

Email: handt@handt.ca

Tel: 905-858-0775

Fax: 905-858-8645

Web: www.hAndT.ca

Read more