High Time to Stop Using Spreadsheets

High Time to Stop Using Spreadsheets

If you are someone who still inputs transactions into a spreadsheet manually, and stores receipts and bills in separate folders then, no offense, but you might as well go back to the 20th century, and remember to take your outdated practices with you. The 21st century is an era of artificial intelligence, augmented reality and cloud computing.

The concept of cloud computing has radically transformed the field of accountancy. Inspired by the server network, cloud accounting allows individuals/organizations to access an unlimited number of files and data online. Hence, the metaphor cloud represents immense connections while staying afloat.

Cloud accounting lets us control sophisticated accounting software online. As a result, businesses can save hundreds of dollars worth of time and effort. Depending on the cloud-based accounting solution, organizations can reap a number of benefits from cloud-based applications.

Easily Accessible Anywhere Anytime

No more waiting for the office to open, staying back, or running back to the office to access a crucial set of data. Cloud Accounting allows you to access your required set of data wherever you may be. You can easily view all the data from your tablet or smartphones, allowing you to resolve any query in real-time, instead of scheduling it later.

Cost Effective

The decisions that you make with your initial capital, when setting up your business, make all the difference. Similarly, when you want to grow your business by making a onetime investment in cloud accounting services, it will surely pay off in the long run.

You will be able to significantly save your cost as compared to conventional methods of accountancy. Irrespective of whether you are using tons of papers or ineffective systems to record your data, cloud accounting systems significantly reduce the cost by maintaining and updating accounts instantaneously.  

Safe and Secure

From a robbery to electrical hazards, from a fire alarm to earthquakes, you just never know what unfortunate accident might take place and sabotage months and years of hard work within a matter of seconds.

Therefore, it is crucial to adopt such systems that have encrypted connections on your server and is backed-up on a regular basis. Even in case of any uncertainty, you cannot afford to lose precious time rebuilding yourself. Moreover, sophisticated cloud accounting systems are almost impossible to hack.

Easily Integrated

Say goodbye to those organizational days in which every department had its own set of four walls around it, and coordination among each other would take days, and at times, months even. Now is the time in which every department is connected to one another via smart systems. This ensures safe and faster collaborations among various departments leading to efficient task performance by the whole organization.

Highly Accurate

If you are a spreadsheet user and you think that your chances of making errors are minimized, then think again. Transactions can easily be rewritten or deleted accidentally, and any task that requires manual labor can never have zero chances of error. Software, on the other hand, can guarantee this. Cloud computing software does most of the work for you, and the only thing that you would be required to do is set up specific accounts, assign codes, and let the software do its job.

Grows With Your Business

You don’t have to worry about going through the tedious process of selecting the right human resources to support your growing business operations. Cloud accounting entails the ability to easily grow as your business expands. For instance, if it currently has the potential for up to 100 transactions per month, and shortly afterward you are expected to require a capacity for more than 10,000 transactions, your cloud accounting software will easily be able to support your requirement in a moment.

Regardless of the size of the organization, cloud accounting systems have been an absolute necessity in the fast-paced environment businesses now operate in. Lack of accessibility to your OWN data should not even be an excuse, considering the age of technology we live in.

Indeed, changing organizational practices can be a huge challenge itself; however, the results are quite rewarding.  You might want to stick to your conventional practices for as long as possible, but think about it; all your competitors have adopted this technology to run faster and there you are walking at the same pace, do you think will you be able to stay afloat, let alone win the race?

Click on the link below to book a meeting.

- Written by: Jag Bath

How to Make Growth Your Focus

How to Make Growth Your Focus

When you start a business, you have a million things to do, and it can be hard to focus on the most important aspects. Countless decisions, risks, these all come into play, and without having a complete forecast of where you’re going and what the outcome is likely to be, it can be a risky game to play.  

Look at it from the viewpoint of a couple of decades ago, before we had the all singing, all dancing technological advances that we are treated to nowadays. Everything was done manually. From accounting to sales, production to communication, every single thing was done by hand, by one person or a team. That took time, and wherever there are humans involved in a process, there is always the risk of a mistake. These days we have automation, which has not only streamlined a lot of processes, but it has mostly taken the risk of mistakes out of the equation also.

Technology is everywhere, and for a start up business, it is a true blessing.  

Software And Automation For Your Accounting Needs

When we mention the word ‘automation’, we’re not talking about robots doing everything for you, we are talking about software packages and programs which do the math and give you the forecast. We’re talking about collecting data, analyzing numbers, and using that data to create reports, to help influence business decision making and future growth.

Nobody enjoys accounting, not when they are trying to run a business. This are often falls under the umbrella of ‘boring’. As boring as it may be, it is necessary. Without effective accounting and bookkeeping, a business will fail pretty quickly.

Thankfully, cloud software packages relating to accounting are the ideal choice. This allows a start up or small business to be able to personalize their software and apps, to take care of the accounting basics, and leaving them to get on with the business side of things. Every single number you need analyzing is done in real time, and can be accessed at any given time, to give you a perfect snapshot of how your business is doing. This allows you to turn your attention to growing your business into the large corporation you see it being in the future.

Of course, one size doesn’t fit all, and it’s important to shop around and find the right cloud accounting software package for your business’ needs. Putting in the effort now will cut down on the huge risk of mistakes in the future, and will allow you to focus on other areas. It could very well be that your area of expertise is not in accounting and bookkeeping, but that isn’t an issue when you have a quality software package analyzing the numbers for you. From there, a qualified accountant can handle the rest, leaving you free to take your business forward to success, in whatever field that may be.

So, while accounting might be mundane to you, make it a priority and you’ll see how vital it is.

Click on the link below to book a meeting.

- Written by: Jag Bath

What is a Financial Statement?

What is a Financial Statement?

As a small business, usually a start up business, it’s likely that you don’t currently have an accountant or accountancy service you use on a regular basis. The reason for this is because start-ups in particular often pile every bit of cash they have into getting the business off the ground and making it a success, until profits start to show.

Of course, this is totally understandable, but in that case it’s vital to understand a few financial documents, to ensure that you completely understand your current cash flow, and that real state of your business.

A financial statement is one of those documents, and this is basically a report on the success or otherwise of your business in that tax year. It’s almost like an annual report, and it gives you important information on what you have achieved in that year, and what sort of forecast you can expect for the coming year. 

Within the financial statement are a few other documents, such as a balance sheet, an income statement, and a cash flow statement. All of these documents give information on assets, liabilities, what they are worth in terms of net amounts, the amount of revenue your business made in that year, etc. All of this information gives you a clear and real idea of your business. The numbers do not lie. While it’s easy to assume you’re doing well, your financial statement will tell you either way.

Why is it Important to Fully Understand Your Financial Statement?

Without the expert knowledge of an accountant, a start up business could easily fall foul of many potential pitfalls. Understanding your financial statement will give you cold, hard facts. This enables you to know when you can grow a little more, it tells you when you need to possibly pull back a little, when you can attempt to attract new business and investments, and when you can launch new products and services.  

It’s easy to see why a start up business may want to avoid spending cash on an accountant or on a professional bookkeeper, but if the cash can be found, it isn’t something you will regret. A professional is able to help you grow much faster, and will help you avoid the pitfalls which could otherwise easily coming your way. If an accountant or bookkeeper is not something you can realistically afford at the start up stage, then it’s vital that you do your own research into understanding your financial statement, and knowing what those numbers really mean for your business.  

The ability to be able to assess performance and forecast potential gains and losses is a tool, which every business should utilize to its best potential. A start up business in particular should be looking towards their financial statement very carefully indeed. It’s easy to assume you’re doing well, but it’s only when you see that success in numbers on a serious piece of paper that you can really be proud and hopeful of you future business success.  

Click on the link below to book a meeting.

- Written by: Jag Bath

Payroll for Small Business: Important Filings and CRA Deadlines

Payroll for Small Business: Important Filings and CRA Deadlines

Payroll for Small Business: Important Filings and CRA Deadlines

For small business owners, hiring that first employee is one of the most exciting milestones of entrepreneurship. However, with your first hire, comes the responsibility of setting up payroll. This is something you’ll want to get right the first time around because payroll can have a major impact on the success of your team. No matter how enthusiastic your employees may be, they expect to be compensated for their work and it’s up to you to ensure that they receive the right amount every single payday.

To help you get payroll right from the very first pay run, we’ve put together a quick guide for small business owners. From registering for a Business Number (BN), to figuring out your payroll remittance schedule, we’ll outline everything you need to know.

Cover Your Bases

Before you start signing cheques, you’ll need to start with a few payroll basics. One of the first steps you need to take is to verify compliance with the provincial labour department. Each province has its own set of rules when it comes to important payroll issues such as minimum wage, vacation laws, termination requirements, and more. You’ll want to double check all of this information to ensure that you’re following the specific employment standards for your province. 

With some research out of the way, the next step is to register your business with the CRA. Though this might seem like an intimidating process, it’s far easier than you might think. Registering your business simply requires getting a Business Number (BN), which is a nine-digit number that the CRA assigns to your business as a tax ID. This is the basis for all other program accounts like payroll, income tax, etc..

After registering for a BN, you will also need to pick the correct program accounts for your business. There are four program accounts to choose from:

  • RC for corporation income tax (if your business is incorporated)

  • RT for GST/HST (if your business collects GST/HST)

  • RM for import/export (if your business imports goods or sells goods or services abroad)

  • RP for payroll (if your business pays employees)

Some of these program accounts may or may not be applicable to your business. If you’re unsure which program account matches your business, you can always double check the CRA website, or ask your accountant.

Once you’ve confirmed your BN and correct program accounts, you’ll need to collect the following from each employee:

  • Social Insurance Numbers (SINs): Employers are legally obligated to collect and record the SIN number from their employees within three days of the hire date. If you don’t receive this information, you’ll have to notify Service Canada within six days of the employee’s hire date.

  • Federal and Provincial TD1 forms: Employers need to keep a record of each employee’s federal and provincial TD1 forms. This is necessary in order to determine the amounts that need to be withheld for source deductions.

Employee Classification

After covering your bases, the next step is to determine what kind of employee you’re going to hire. In other words, you need to know whether you’ll be bringing on an employee or an independent contractor (also known as a self-employed individual). It’s important to make this distinction because the classification of an employee has major implications on the person’s entitlement to Employment Insurance (EI) benefits. It also determines how they are treated under other legislation such as the Canada Pension Plan and the Income Tax Act.

The CRA’s Employee or Self-Employed? (RC4110) document provides a detailed overview of the difference between employees and independent contractors. In general, the CRA determines a worker’s status by looking at the following:


  • The employer sets the hours of work, not the employee

  • The employer provides the tools and equipment necessary to carry out the job

  • The employee is paid a salary

  • The employee has legal and financial obligations to the employer

  • The company is responsible for withholding and remitting all federal and provincial taxes, workers compensation, Canada Pension Plan (CPP), and Employment Insurance (EI) on the employee’s behalf

Independent Contractors

  • The contractor sets their hours

  • The contractor provides the tools and equipment necessary to carry out his or her job

  • The contractor shared a monthly or hourly fee and then invoices the employer

  • The contractor is considered an independent business in their own right

  • The contractor is responsible for paying their own federal or provincial taxes

In short, the CRA is basically looking at the intent of the relationship and the amount of control the worker has in the job. While some of these differences may seem subtle, it’s important to take the time to properly classify your employees. If you misclassify an employee as an independent contractor, you will have to contend with the following:

  • The employer must remit unpaid taxes and may be subject to interest and/or other penalties.

  • The employer will need paid CPP and EI premiums.

  • Any business expenses claimed by the “contractor” will need to be repaid (a situation that can have major financial implications for the “contractor”).

Payroll Deductions

At this point, you’ve done your homework and you’ve got everything ready to hire your first employee. Now it’s time to find out how you’ll remit (file) payroll taxes back to the Canadian government.

The T4001 Employers’ Guide - Payroll Deductions and Remittances explains that as an employer, you must calculate, deduct, and remit certain source deductions each time you run payroll. In other words, if you’re an employer, you need to send a certain amount of money to the government each time payroll is run. The math ends up looking like this:

Deductions (withholdings) based on the income of each employee include:

  • CPP contributions (5.1% up to a yearly maximum)

  • EI premiums (1,62% up to a yearly maximum)

  • Income tax (based on provincial/territorial rates)

Your share as an employer:

  • Employer CPP contributions (must match the amount deducted from each employee’s contribution)

  • Employer EI premiums (1.4x the amount deducted from each employee’s premium)

To calculate your payroll deductions, you can use the CRA’s Payroll Deductions Online Calculator. Alternatively, if you use a dedicated payroll software solution, the calculations will be done for your automatically.

Remittance Deadlines

Now that you know how much to remit, the question is when you should pay. This is known as your payroll remittance schedule and it is determined by your average monthly withholding amount (AMWA). Your AMWA is the sum of all payroll deductions you paid to the CRA in a calendar year, averaged on a monthly basis. Your AMWA also determines the remittance deadlines you’ll need to follow:

Regular Remitter

  • Remitting Frequency: Monthly.

  • Remitting Period: Calendar months.

  • Remittance Due Dates: 15th day of the month following the one in which you made the deductions.

Quarterly Remitter

  • Remitting Frequency: Quarterly

  • Remitting Period: January 1 to March 31; April 1 to June 30; July 1 to September 30; October 1 to December 31.

  • Remittance Due Dates: Payments are due on or before April 15th, July 15th, October 15th, and January 15th for payroll processed in the previous quarters.

Accelerated Remitter (Threshold 1)

  • Remitting Frequency: Up to twice a month.

  • Remitting Period: 1st to 15th of the month; 16th to end of the month.

  • Remittance Due Dates: Remittances are due on the 25th day of the same month for payroll processes in the first 15 days of the month. For payroll processed after the 16th day of the month, remittances are due by the 10th day of the following month.

Accelerated Remitter (Threshold 2)

  • Remitting Frequency: Up to four times a month.

  • Remitting Period: 1st to 7th of the month; 8th to 14th of the month; 15th to 21st of the month; 22nd to the last day of the month.

  • Remittance Due Dates: Remittances are due by the third working day after the week in which the payroll was processed.

You can make your remittance payments via the following methods:

  • Online

  • Over the phone

  • By Visa Debit or Interact using the CRA’s My Payment service

  • Pre-authorized debit

  • Though a third-party provider such as a payroll company

  • At a financial institution

  • By mail with a cheque

While the above provides you with all the basics you need to set up payroll for your small business, it never hurts to consult an expert. For advice on running payroll for small business, contact the accounting professionals at Capex Chartered Professional Accountants.

Written by Katherine Pendrill. Katherine is the Content Marketing Specialist for Knit—a cloud payroll software for Canadian accountants and bookkeepers..

Why You Need Accounting Software Sooner Rather Than Later

Why You Need Accounting Software Sooner Rather Than Later

When you start a new business, it becomes your baby. You live, breathe, and think about it constantly. You love your job, you are your own boss, and of course, your business is going to survive and grow into a huge corporation.

Not always.

A start up business is a risky endeavour, but if you put into place the right software packages and cover all bases early on, your chances of becoming the next big thing are much greater as a result.

One area which many start ups put off until later is the accounting and bookkeeping arena.

Big mistake.

The sooner you implement the right software packages, the greater your chances of success and growth, and the easier it will all be. Businesses exist to make money, and whether you enjoy it or you don’t, whether it’s your passion or it’s not, if it’s not making cold, hard cash, what’s the point? Your business will instantly fail in this case.

Finding software packages which allow you to integrate your accounting and bookkeeping tasks, while also cutting down on the amount of time you need to spend tracking expenditure and profit, are an area you need to be looking at sooner rather than later. By streamlining you record keeping and billing tasks, you will save time and money in the long run. The quicker you get these software packages in place, the easier your business will be to run over time. By doing this, you are basically preparing your business for growth and expansion in the future.

These software packages also grow with your business, i.e. the more your business expands, the more information your package will hold and record, making your tax returns earlier, allowing you to track information and see how successful you are in real time and also informing your future business decisions. Software such as this allows you at any given time to see how your business is doing in reality.  

Why Cloud Software is Beneficial  

There is a reason why many businesses choose to go down the route of cloud software, including for their accounting and bookkeeping tasks. Cloud software gives you that ‘real time’ feel, e.g. you can check details at any time and know it is up to date. In addition, you can link up your main business bank accounts, using a program such as Quickbooks. This records everything for you and links everything together, without you having to do much else.

You can also access monthly or quarterly reports, to give you a snapshot of how your business is really doing. All of this is invaluable and avoids costly mistakes, while also informing you when you are in the best position to expand and take on new investments.

Of course, for a start up, all of this may seem overwhelming, but putting in the time and effort to ensure your future success is jus good business sense. The investment of time ma seem large at the start, but it will bring you benefits almost from the get go.

Click on the link below to book a meeting.

- Written by: Jag Bath

Small Business Owner? When Should You Think About Incorporating?

Small Business Owner? When Should You Think About Incorporating?

A small business often comes as a surprise, albeit a welcome one. For instance, you start helping out a friend with catering for events. One event leads to another, and before you know it, you have to buy a diary to remember all your bookings! From there, you might decide to quit your full time job and turn your catering into a small business.

Small businesses have many decisions to make, and one of them is whether or not to incorporate.  

There are a few benefits which will come your way if you choose to incorporate, which is the main reason why small businesses decide to go in this direction. The main reason, legally, is limited liability.

If you are sued by a disgruntled customer and you have not incorporated, e.g. you do not have limited liability, the customer could take you for everything you own, house and car included. On the other hand, if you have limited liability, you have a little protection and peace of mind. As you can imagine, that’s a huge relief for a small business, as a legal case such as this could end the business very easily. While limited liability won’t stop you losing anything, it will put a limit on how much you could lose.  

Tax-Related Reasons to Incorporate 

Another main reason is related to tax. Corporate tax levels are considerably lower than the rate of personal tax, and that means you could save yourself a good amount of cash every tax year.  

Anther benefit is something called tax deferral. This means you can take money out of the corporation you own, and pay much less personal tax instead. You therefore defer the remaining amount of tax until a later date. There are limits on how to do this and how much you can take out, but it’s mostly around using dividends and salary.

Of course, there are a few downsides to incorporating, just as there are upsides too. If you incorporate you will need to pay fees, and you will need to fill in a separate form for your tax, which is a T2. This is in addition to your personal return. You’ll also need to ensure that you keep records correctly, as these could be audited at any time by the tax department.  

When Should You Incorporate?

It really depends on the type of business you’re in. If your business has a high amount of liability risk, e.g. someone is quite likely to sue you, then the sooner you incorporate, the better in terms of protection. Other than that, it’s a personal choice to make, but it’s a good idea to flag this up when your small business starts to make profits which exceed the amount of cash you need to live well. This means you can start to take advantage of those tax benefits.  

For any small business, the decision on when to incorporate needs to be thought about carefully. In terms of taking advantage of the benefits however, the sooner the better.

Click on the link below to book a meeting.

- Written by: Jag Bath

Looking to Improve Your Business in 2019?

Looking to Improve Your Business in 2019?

A brand new year is upon us, and that means a fresh start. Whether you’re a believer in resolutions or not, a new calendar year is a great time to look towards areas for business growth and improvement.

To give you an idea of where you can start, let’s check out three key improvement areas you can focus on. If you already have these in place, it’s time to look at how you can further develop them too.

Improve Your Presence Online

Everything is done online these days, and that means you need to have a strong presence on all major social media challenges, as well as maintaining a high quality, search engine optimized website.

Look towards website designers who can help you improve your current site, and perhaps think about setting up a blog, with regular content that is optimized to push your site to the top of the search engine rankings. The higher up you are, the more visible you are to customers, and that means your site is the one they will be clicking on. Of course, social media is also a huge player, so being present and strong in that direction will serve you well.

Create and Maintain a Team Environment

The best businesses have a team of employees all pulling in the same direction, with a high amount of morale, and belief in the business’ aims. Encourage a collaborative, team working environment within you business, and delegate new tasks on a regular basis, to keep skill sets up to date and refreshed at all times.

The more you focus on the people who work for you, the higher the rate of productivity within your business will be. Productivity brings revenue to your business, and also allows a more creative thinking mind-set, with some fantastic solutions to problems you may have had issues with to date.

Utilize The Cloud

If you’re not already using Cloud storage and Cloud software packages then it’s time to make the switch. Not only does this streamline your business activity, but it also gives you real time snap shots of how you are doing at any given moment. In terms of business growth, this is invaluable.

Moving everything to Cloud technology allows your staff to collaborate on pieces of work together in real time, and if you have a workforce which is spread over several places, e.g. if you have freelancers or digital nomads working with you, this is even more beneficial. Everyone is on the same page, and pulling in the same direction. This links back to team morale, but takes it one step further into your business workings too.

By taking a long hard look at how your business is doing currently, and implementing new technological endeavours, you can create the foundation for true business growth in the not too distant future. In addition, keeping your team of employees tight and together means that everyone is giving their all for a common aim. When that happens, there is only success on the horizon.

Click on the link below to book a meeting.

- Written by: Jag Bath

Understanding Cash Flow

Understanding Cash Flow

Running a business is hard work, and much of the time you are so focused on making ends meet, and starting to grow your business from the floor upwards, that it can take a huge up most of your time. It’s no wonder in this case that most small business owners feel quite cut off from those around them.

The thing is, if you understand what cash flow is and how to manage it, you can not only take back some of your time, but you can allow your business to grow and flourish without as much effort too.  

Of course, business success requires a little luck, but planning and understanding how everything works is a huge part of the story too. Managing your cash flow is one of those things you need to understand.

What Exactly is Cash Flow? 

Cash flow is the cash which moves into your business every month, and the money which flows out of it too. You will receive cash from sales and services, e.g. from your clients and customers, and then you will need to pay out too, for rent, supplies, salaries, tax, etc. You are in a good situation, called positive cash flow, when you have more money flowing into the business than flowing out.

Of course, on the other hand you have a negative cash flow if you have more money flowing out of your business than into it. During times when you are positive, it’s a good idea to put a little money aside, to cover you when negative times occur, which they will on occasion.

The breakeven point is when a business has the same amount of money coming in, as going out. It’s vital that you know your breakeven point, because it tells you the amount of sales or revenue you need to make in order to cover your expenses. This is the aim for survival, and anything over is a profit.

The Importance of Effective Bookkeeping

 Understand cash flow is about keeping records and ensuring that you know your breakeven point. Not only is effective and accurate bookkeeping vital for your tax and accounts, but it also keeps you ahead of the game, so you know where you are with your finances, and you can flag up any potential issues ahead of time. Being prepared is vital.

There are many ways to keep records, either the manual way, or online. An accountant will do it all for you, but this is going to cost you extra money, and that’s possibly cash you can’t afford at the very start of setting up your business. As your business grows, accountancy services are something you should invest in.  

Online bookkeeping methods and software packages will allow you to keep the accurate and appropriate records you need, while also storing the hard copies of documents which are vital or your taxes too.

By being aware of your cash flow and by keeping accurate records, you can ensure your business’ success, and growth in the future.

Click on the link below to book a meeting.

- Written by: Jag Bath


Why your business needs an online Accountant?

Why your business needs an online Accountant?

Whether you run a small business or own a large corporation in Canada, managing business matters on your own is quite a hassle. You have meetings to attend, deadlines to meet, projects to complete, and various other operational duties.

There is no doubt that business owners have many responsibilities to take care of and running a business may sometimes become hectic for you, particularly when it’s about financial operations. Although you may certainly have a bookkeeper or accountant to oversee your books, you probably can’t access your financial records anytime anywhere. 

While the internet has transformed the ways industries do their businesses, technology has also brought abrupt changes within the business sector. With the advent of internet, accountants have begun to utilize different software to maintain their company’s business records.

However, most business people in Canada review their financial records either after 6 months or even after the fiscal year end. They generally just handover the necessary files to their accountant who uses the information for tax filing purposes. This is how most businesses in Canada carry out financial affairs.

It doesn’t have to be this way; reviewing your accounting books often and evaluating the data to design strategies can take your business to remarkable heights. Several cloud-based accounting solutions not only enhance efficiency of your business but also let you access all your business data anywhere at any time.

Increase your Business Efficiency

Unlike typical accounting software, cloud-based accounting software can save your company a lot of money and time. That means you no longer have to go all the way long to your server or computer’s desktop to review your financial records.

An online accountant or cloud-based accounting software can let you maintain your data back-ups, bookkeeping records, and other essential financial data.

Most importantly, having remote access to your financial record 24/7 through the cloud ensures the ability to make well-informed decisions at the right time. However, with typical accounting software, you barely get the chance to evaluate your business data and make decisions based on it.

In addition, you will have access to real-time information with an online accountant; you can make invoices, prepare periodical financial reports, and do much more. Along with increased efficiency and enhanced collaboration, online accountants with software, like Quickbooks Online, Wave Apps, Freshbooks, and Xero, can help make your business stand out in the small business world.

Enhanced Engagement with Online Accountant

When your accountant is the one who manages all financial books and you just view records once or twice a year, you may hardly pay attention to taxes and other financial figures. Since accounting is an imperative part of business, you really have to stay up-to-date about the current financial matters of your company.  Of course, there are myriads of things linked to your financial books.

For instance, if you keep checking your accounting book records with an online accountant, you’re likely to know whether your revenues are monthly basis or your business earns profits periodically. Similarly, you’ll get to know your gross margins and can set your goals accordingly. Furthermore, you can keep an eye on your expenses and your ROI. In addition, you’ll know that how much finance you’re investing for business promotion and whether you’re receiving desired results.

It’s important to mention here that businesses are dynamic; you probably have navigated through vicissitudes in your business journey. So, remember that an online accountant coupled with cloud-based accounting system can assist you effectively.

Geographical Barriers

These days, many business men prefer to have meetings virtually; with an online accountant and cloud-based accounting software you can share the details of your financial records with your delegates or partnering companies. This not only enhances collaboration with your team, but also provides you with ultimate solutions.

Furthermore, you can let an online accountant use your financial information through cloud system so that they can provide you with effective strategies.

Final Thoughts   

Like other businesses, you might have been struggling to achieve your goals and objectives promptly and effectively. However, make sure to integrate a cloud-based accountant into your business to help it grow and stand out in the corporate world.

Click on the link below to book a meeting.

- Written by: Jag Bath

How Do I Pay Myself a Salary?

How Do I Pay Myself a Salary?

There’s no better sound than that *churrr* sound the ATM makes. Dollar Dollar Bill Ya’ll but more seriously let’s kick this blog off.

So you have set up a small business corporation in Canada and are still not sure whether you should pay yourself a ‘salary’ or ‘dividend’- or you want to pay yourself both. This is one of the questions that come to the mind of every business owner.

While the right decision for you somehow depends on your business circumstances, you need to have clear insight with respect to both payment methods.

However, if you have chosen to pay yourself a salary, let’s explore what details the method entails.

Paying yourself a Salary

When it comes to determining a salary as your payment method, you must know how you’re actually paying yourself. First of all, you will need to register for a payroll account with CRA the Canada Revenue Agency. For that, you need to contact the concerned CRA department and ask them to set up a payroll account.

Your account will have the same business number as your corporation, but it will also include the RP number as opposed to the RC, which is usually present at the end of your BN. When you pay yourself a salary from your business, a deduction will be made from your corporate net income. Nevertheless, you will have to pay the tax on the received salary and declare it on your personal tax return.

Besides that, you will also be making payments to the Canada Pension Plan (CPP). To give you a clearer understanding, we are sharing the common methods that explain how you can pay yourself salary throughout the year.

Declaring the Bonus at the End of the Year

With the fiscal year end approaching, most business owners in Canada seek to make important decisions in order to reduce their annual taxes, and you’re probably one of them. With that being said, the most appropriate method to reduce your yearly business taxes is paying out bonuses.

Being in the corporate world, you probably know that every business owner whose corporation earns more than $500,000 is subject to pay tax at a higher rate 28%+. However, those who earn $500,000 or less are taxed at the rate of 14%.

In order to avoid a higher tax payment, declare a bonus to reduce your company’s profit to not more than $500,000. Since you have declared the bonus by the end of fiscal year, it will come under a tax deduction, even if you don’t pay it.

However, on receiving a year-end bonus, you will have to pay personal tax at your marginal tax rate.

Periodic Remittances

Sometimes, your corporation’s cash flow can be tight and you can’t afford to take a year-end bonus. In such cases, you can pay remittances on a periodic or quarterly basis; this will also allow you to manage your cash flow effectively.

Furthermore, paying yourself a salary on a periodic basis ensures that you receive personal income throughout the year and not as a lump sum amount only at the year end.

What about Monthly Remittances?

Of course, not every business situation is alike; your business profits can also be predictable. This means that you can set payroll remittance to be paid to you every month by scheduling it through CRA payroll calculator.

Furthermore, getting paid each month makes your T4 (a salary slip issued by CRA) manageable and easy to calculate at the year end.

Payroll Software

If you’re not sure whether to take a year-end bonus, monthly salary, or personal quarterly or periodically income, you can use some amazing payroll applications. These apps calculate your remittances and make the required payments. #Wagepoint #KnitPeople

Once it’s done, the amount is transferred to your payroll account automatically. There is no denying that you can’t trust every application and you can’t decide which of them is right to use, either. Therefore, you will need to do your research before registering for your remittance on any application.

Why you should decide to pay yourself a Salary as a Business Owner

So, if you decide to pay yourself a salary through your corporation, the biggest benefit is that you will get a personal income. Secondly, as you will be paying a certain amount of your income to the CPP, you will receive several benefits from the Canada Pension Plan after your retirement.

Furthermore, by paying yourself a year-end bonus, you can defer your corporation’s tax payments. This way, you will be able to minimize your corporate taxes by the bonus amount. Furthermore, the method also allows you to split your income by paying remittance to related employees, such as your children or spouse.

Also, when you select a salary method, you will be able to contribute into TFSAs or RRSPs, which serve as an investment for retirement.

The Bottom Line

Despite the level of complexity associated with each payment method, choosing to pay yourself a salary is the most practical. Since we have provided all the basic information related to the method, we hope you won’t find it difficult to select a ‘salary’ as your income method. Ultimately, the Salary will be taxed based on how much your gross income you take out. If you don’t want to pay more payroll taxes simply leave the money in the corporation.

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- Written by: Jag Bath

The Strategy behind Management Fees and Its Tax Implications

The Strategy behind Management Fees and Its Tax Implications

Generally, management fees are required by wealth managers to manage assets for their clients. These assets can include stocks, bonds and other valuable items that generate value for investors. Since wealth managers or investment advisor cherry pick the best stocks or valuables for their investors, they charge a certain fee for their services. i.e. “management fee”.

In the recent past, Canadian corporations have started using this concept in acquiring tax benefits. As a result, management fee has come under scrutiny by Canadian Revenue Agency to mitigate any risk of tax fraud on their end. Hence, it is vital to gain a detailed understanding of this fee to avoid an audit by the CRA.

How corporations have used this concept in the past

Establishing Subsidiaries

Consider a service provider that is based out of Ontario. The organization has recently discovered the potential of building a client base in Alberta. The firm decides to open a branch office in Alberta, to facilitate its clients in the central region. It decides to keep a few sales officers at the new location while managing operations from Ontario.

At the end of the reporting period, the service provider realizes huge tax losses in Ontario. The firm charges a management fee to its subsidiary in Alberta to minimize this tax loss. This helps the parent company to reduce its tax losses while keeping all documents available for audit. This is one of the many ways in which corporations are using the concept of management for their own benefits.


Some shareholders establish a management company of their own to avoid or defer their taxes. Consider a shareholder who is allowed to take income from their company in the form of salaries or dividends. To avoid their income tax, shareholders can establish their own management company. This management company will charge the parent firm for contracts they receive from it.

During financial reporting to auditors, shareholders can charge additional expenses to the parent firm to minimize their tax losses.

Realized Income Benefits

In most of the Canadian provinces, professionals other than accountants and lawyers are not allowed to realize their income with their client firm. Professionals who cannot realize their income with their partner organizations pay as much as 3 times the taxes paid by those that can.

One strategy to help these unincorporated professionals gain tax credit is to establish a management company that is dedicated to managing their operations. If a real estate agent is providing property management services to an organization and they make huge profits in a fiscal year, They can form a management company that can reduce their tax loss. Income that is realized with a corporation is taxed at the rate of 15% while the one that is not is taxed at 45%.

Whether You Should Take The Management Fee or Not?

Charging a management fee to your client has multiple benefits. Reduction in tax loss is one of the primary examples why businesses in Canada have been utilizing it for many years. However, the government is devising strategies to differentiate management fee from ‘tax advantage.’ Corporations and Individuals who use management fee to gain tax breaks should do a considerable amount of homework before putting it on their profit and loss accounts.

One of the significant implications of using management fee is that CRA can treat it as past salary. As a result, it will not only treat it as taxable income but also enforce penalties on the amount earned.

Tax Experts generally suggest that if you want to use management fee for the service that you provide to your clients, you need to put appropriate documents in place. These could include:

1.     The legal agreement between you and your employer with the terms and conditions specified in the contract.

2.     Prepare invoice on a monthly basis for the services that you provide to the organization.

3.     Each invoice that is generated by the management company should have a proof of financial transaction in the designated bank account.

Concluding Thoughts

If you want to use a management fee to charge for your service to your clients, you should make sure that you document it accurately. Otherwise, CRA may charge you with tax arrears and penalties that will offset all your financial gains.

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- Written by: Jag Bath

A Big Savings Question 

A Big Savings Question 

Should you place your savings in a TFSA, and RRSP, or should you go for both?

It’s a question you need to know the answer to, in order to get the most out of your hard-earned cash. If you go down the wrong route, you could be missing out on great interest rates and security for your money.

In days gone by, all of this was easy. You chose a standard account for your savings, and you were paid a small amount of interest. You could also withdraw cash from your account whenever you wanted. If you didn’t want this route, you could put your cash in a retirement plan, called a RRSP. It was a choice that didn’t require agonizing over.

These days however, things have changed. Since the 1st of January 2009, the Government implemented the TFSA. This is a Tax Free Savings Account, which allows you to earn money through income from investments, without paying tax on it. This is a huge saving.

How Does it Work?

Basically, any money you pay into an RRSP in that particular year will lower your personal amount of taxable income. So that means that by utilizing RRSPs, you’re paying a lower level of tax. If you are someone who receives a regular salary from work, e.g. a regular employees, you will usually find yourself with a refund on your tax at the end of the tax year.

As with anything related to tax, there are many ‘if this’ and ‘maybe thats’, which can make understanding it all quite difficult. There are also rules on how much you can pay into your RRSP within a year, and when you can take cash out. It’s a good idea to really read into RRSPs before deciding whether or not they are for you.

On the other hand, we have TFSAs. These are the polar opposite of what we have just talked about. With a TFSA you do not have any tax refund from the Government, but you are allowed to withdraw cash at any time, tax-free. This is also an easier option in terms of rules, as there aren’t as many restrictions on how much you can withdraw and how much you can pay in. This is a more flexible option.

So, which should you go with? It’s a totally personal choice, and it depends entirely on your circumstances. Both of these options are designed to help you achieve your savings desires and goals. How you go about that is a decision, which only you can make. If you are an employee of a company, contributing some cash to an RRSP is a good idea, because you are likely to receive a refund on your tax, and it could be a large lump sum in some cases. If you prefer a more flexible savings product, the TFSA is the best choice for you.  

Read into detail about both, ask for advice and think carefully. Your savings are designed to grow, but they could also help in terms of lower tax amounts paid over time.

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- Written by: Jag Bath

Bookkeeping Automation And SaaS Businesses

Bookkeeping Automation And SaaS Businesses

There are not many businesses who can hold their hands up and say they enjoy bookkeeping.  SaaS businesses can find this a difficult and time consuming process, and as a result, there are many pitfalls which can become a business unknowingly. These types of pitfalls can end up being expensive, both in money and time.

A good way to streamline your bookkeeping endeavors and save yourself both time, and the risk of mistakes, is to ensure that your booking is automated. That sounds complicated, but when you break it down, you’ll see how easy it can be.

Research And Choose Apps For Cloud Accounting

Cloud accounting is beneficial in many different ways, and there are several high quality apps on the market which makes the process much easier overall. Cloud accounting allows you to access your financial information at any time, and you can easily complete many different tasks in half the time as a result.  

If you are keen to implement bookkeeping automation, cloud accounting, and choosing the right app, is a vital step. Look for apps which have something called an ‘open API’. This will allow the app to utilize third party services, to enhance your accounting. 

Research And Choose Apps For Subscription Billing

The very nature of SaaS companies is that they are going to have several profitable transactions which recur over the space of the month. This can be hard to keep track of, but an app which utilizes subscription billing, working well with your cloud accounting app, will take the hard work out of it all.

The idea is that the two apps work side by side, and this handles the tax side of things also. When a client is billed, the two apps will kick in together, and an invoice for the sale will be sent from the app handling subscription billing, over to the app handling the general cloud accounting. Nothing gets missed in the middle as a result. This will also apply the correct amount of tax on the sale, depending on where the client is based.  

Research And Choose Apps For Managing Expenses

A third app you need to obtain is one which will record receipts and invoices pertaining to expenses. Again, this needs to work seamlessly with your cloud accounting app, to ensure everything pushed from one to the other. As a result, you have less paper, rendering you finally paperless, and everything will update itself, via the apps working together, without you having to input and calculate various figures.

Automated bookkeeping is about all areas of your accounting services running together and updating accordingly. This creates a more streamlined, easier to use service for any business, but for a SaaS business especially.

Of course, it’s important to ensure you choose the right apps, and to utilize advice from regular bookkeeping companies, to help you establish your tech bookkeeping system. Setting everything up from scratch can take time, and there can be mistakes made. By taking advice and choosing apps carefully, you minimize these risks and ensure you have an automated and successful process in place. 

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- Written by: Jag Bath

The Big Question - When Are my Taxes Due?

The Big Question - When Are my Taxes Due?

For any business, there is one question that needs to be asked, and the advice adhered to - when are my taxes due? 

In Canada especially, tax deadlines can be confusing. There are personal tax issues, and there are corporate tax issues. You also need to identify the type of business you are:

•   Corporation

•   Employee

•   Self-employed person or sole proprietor

Understanding which group you fall into will give you a faster answer to your question. 

If you are a corporation, and you are a CCPC, which stands for Canadian Controlled Private Corporation), then you need to adhere to the following tax information:  

•   Your taxes will be due three months after the tax year ends

•   But, filing your taxes is but six months after the tax year ends

Confusing? Yes! 

Remember, corporations can choose the date their tax year ends, but by the time the taxes due date arrives (three months after the end of the year), it could very well be that your records aren’t up to date and completed yet. This can make knowing how much tax you owe difficult. You have two answers to this - you can either work hard to ensure everything is up to date by that time, or you can simply estimate what you think you’re going to owe, pay the CRA by the deadline date, and then submit an amendment to rectify the numbers once your records are up to date.

If you are either a self-employed person or a sole proprietor: 

•   Filing of your taxes is due on the 15th of June, for the previous year

•   Payment of your taxes is due on the 30th of April 

The same situation as above may arise, but the same solutions apply.

A regular employee’s tax filings and owed tax are both due on 30th of April, and the employer generally deals with this side of things.  

Miscellaneous Tax Dates to Bear in Mind

There are a few other tax filing and owed dates which don’t really fit into specific situations, but may be pertinent to you:

 •  Corporations to complete HST Annual Filing by the 31st of March

•   Self-employed individuals to complete HST Annual Filing by the 30th of April

•   Self-employed or corporate HST Quarterly Filing to be complete by the final day of the month, after the quarter was filed

•   Self-employed or corporate HST Monthly Filing to be completed on the last day of the month, following the filing of the month’s figures

•   T4 and T5 payroll slips (Payroll Filings) – 28th of February, for the year before

The above information should make knowing when your taxes are due much clearer. Of course, if you have any issues or you’re not sure about any aspect of your business, you should talk to a registered and experienced accountant. Simply guessing is not a good idea, and could lead to an expensive mistake, which costs time and money in penalty payments. Every business is different, and whilst dates should be adhered to at all times, there are anomalies which crop up from time to time.

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- Written by: Jag Bath

Tax Time is Almost Upon Us - Should You File Your Own Taxes?

Tax Time is Almost Upon Us - Should You File Your Own Taxes?

Whenever the time arrives, when we’re all thinking about filing our taxes and making sure everything is submitted on time, there are many questions that crop up. You might be thinking about filing your own taxes this year, and in that case, here are some things you may want to know in advance.

There are many online calculators and different methods of help which can allow you to file your own taxes. Of course, this shouldn’t replace the idea of having an accountant to help you throughout the year, but by submitting and filing your own taxes online, you are giving yourself a large amount of control over your accounting tasks and money management for your business.

You might be wondering why we’re talking about self-filing of taxes, when it is a job which an accountant has traditionally done. Surely this is a negative thing for the world of accounting? No! There are many reasons why self-filing online is actually a good thing.

For instance, filing your own taxes online isn’t difficult, and it really is just about giving information, and submitting it in the right place on the form. It’s very self-explanatory and won’t take very long to complete. You will use your T4 slips from employment salaries you have received, and your T3 or T5 slips for any income you have received from investment, as well as slips for RRSP cash paid and contributed, and anything else you need to claim.

The information you need to enter is contained very clearly on these slips, and by doing this yourself, you have control over your filing. If you do this yourself, you know exactly what you’re doing, when you’ve done it, and how much tax you need to pay. It is a peace of mind thing, and one in which can give you a greater overview of your tax situation.   

How is This a Good Thing For Accountants? 

Don’t worry, you’re not putting your friendly accountant out of a job, you’re actually helping them. At the end of the tax year, accountants are wrapped up with work, mostly filing tax returns which could be done by the business themselves. This is easy work, something which you can easily do without highly skilled knowledge, e.g. the skills of an accountant. This frees them up to concentrate on the more complex work, which is also in demand at the end of the tax year.

As a result, accountants can also give their clients much more in-depth and specialized advice, because they’re not bogged down with inputting information into tax return forms. Of course, you can always ask your accountant for quick advice if need be, but this is certainly a task you can do yourself, without much hassle.

The only thing you need to bear in mind when submitting your own tax return is to ensure that everything is in order for when the time comes. This will make everything easier, and reduce stress. If you plan well throughout the year and keep your records in order, this should be a simple task. 

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- Written by: Jag Bath

Thinking About Paying a Salary to Yourself?

Thinking About Paying a Salary to Yourself?

If you want to take money out of a business, specifically a corporation, you might be wondering whether it is a better choice to utilize dividends, or to pay a salary. It’s important to look carefully at what is best for your company, and then learn about how to go about paying yourself a salary, if that is the route you choose to go down.

Why would you want to pay yourself a salary? If you simply take cash out of your corporation, this isn’t classified by the CRA as either a dividend or a salary. It is considered to be something called a shareholder loan. This means you are supposed to pay the cash back, because you are literally borrowing money.  

How to Pay Yourself a Salary

If you are opting to pay yourself a salary, you will need to issue a T-slip by the end of February every year. This tells the CRA that a salary has been taken. You should do the same if you want to withdraw a dividend. The types of slips vary for each payment, e.g. a T4 is for a salary, and a T5 is for a dividend.

The work doesn’t stop there. You also need to record the remittance on the payroll system. This ensures the correct amount of tax to be taken from the salary. This will usually be CPP and income tax.

There are a few ways you can declare that a salary has been paid:  

•   Bonus at the end of the year - when you do your year-end taxes, you’ll declare that you have given yourself a bonus as a lump sum. Use a payroll calculator (there are many online) to work out how much of a remittance you need to pay, and how it will affect your personal tax return.

•   Remittances at periodic times - If your business would struggle to make lump sum payments, you can make remittances throughout the year, e.g. quarterly. This ensures you are paying yourself at regular times and manages your companies finances.

•   A regular monthly remittance - This is very similar to regular payments to employees and you will need to use a monthly payroll system, with an online calculator to help you in terms of how much tax to pay. This will automatically be deducted every month, and your year-end taxes will be much clearer as a result.

If you’re not sure which option is best for you, or how to really work it out to your own benefit, it’s a good idea to talk to an experienced and registered accountant to get the best advice. We all have different circumstances, and an accountant will be able to advise you the best.

You should also make sure you are using high quality payroll software, which will automatically work out how much remittance on tax you need to make and transfer the amount without you having to lift a finger. Remember to shop around for the best package to suit your needs.

Click on the link below to book a meeting.

- Written by: Jag Bath

Why You Should Use a Cloud Accounting Company  

Why You Should Use a Cloud Accounting Company  

If you’re looking for a new firm to help with your accounting needs, you’re sure to be struggling with the initial decision. Everyone has a sales pitch, so how are you supposed to narrow down what you need?

Remember, it’s vital to take the time to think this through carefully. This is a working relationship which is going to last for a good amount of time, and you need to make sure that the company you end up choosing can work within your methods too.

A good option is a firm which uses cloud accounting. Let’s explore why this is a positive option, as opposed to the regular accounting company route. Before we get there however, what exactly is this type of firm?

Free personal tax filing 2018

Free personal tax filing 2018

It's that time of the year again and here we are another year staring at our T4 slips and asking that question….Where did all the money go? It's important to have your taxes filed on time and every year because there are some tax breaks that you can qualify for and receive rebates. These rebates won't make it to your mailbox if you don’t do your annual tax filing.

The perfect website to use to file your personal simple income tax returns is www.SimpleTax.ca. It's a friendly, fast and efficient way of having your personal taxes filed this year. Paying someone to do a simple tax return can be money used to invest in your RRSP or TFSA account. #SaveTheChange

In case you owe money to the CRA outstanding tax owing amounts can rack up penalties and interest. In case your curious the penalty is 5% of your 2018 owing amount plus 1% for every month that it's late for a maximum of 12 months. So a pro tax tip is to file your tax return even if you can't pay the total amount so you can avoid the late filing penalty.

If you choose to skip out on your taxes for multiple years you get yourself into deep waters where the penalties get really expensive. The penalty will be lesser of the 10% of the amount you did not file and or 50% of the difference between the understated tax and or related to the amount you failed to report.

False statements on your tax returns is serious and if it carries it's own set of tax troubles. However, the Canada revenue agency understands that mistakes happen and if you catch this mistake before the CRA than you can get away with just a simple slap on the hand! The program is called the voluntary disclosures program.

Key things to remember when filing your personal tax return this year.

  1. Did you report all your T4, T4E, T5 and other tax slips received in the mail?

  2. Remember that Presto and TTC passes are tax deductible not your regular trips. (i.e. the actual cards).

  3. Did you pay any rent for the year? That's tax deductible

  4. Did you take care of your parents and or child? That's also tax deductible.

  5. If you had any tuition or professional fees paid you should claim those expenses.

  6. One of the expenses rarely claimed is medical bills (i.e. prescriptions).

  7. Did you sell your primary residence in? This is a new requirement and needs to be declared

  8. Do you own any foreign property? Please ensure to claim this on the form T1135.

Please use the following resources:
Interest & Penalties


Tax Software to use:

Click on the link below to book a meeting.

- Written by: Jag Bath

New Business? Here’s How to Drum up Leads And Move Towards Success 

New Business? Here’s How to Drum up Leads And Move Towards Success 

No matter how old your business is, you should always be on the lookout for new customers. Of course, for a new business this matters even more. You can’t begin making a profit until your customer base reaches a certain break-even level.

Happily, there are many unique ways you can do just that, but it’s important to remember that quick money isn’t the aim here, it’s to develop leads which will remain with your business, and also bring cash your way.

Analyze Your Metrics

It’s important to be able to analyze your business metrics properly. These help you to track your business and understand how well it is doing, as well as identify areas where you could tweak things for better results. The technological world has made this much easier to do, with metrics related to social media, performance, etc.

Never Underestimate The Power of Your Website 

A website is a vital part of your business marketing technique, and without it, you’ll lose ground to your competitors. No matter how big or small your business, an up to date, well functioning, attractive, and relevant website is vitally important.  

Your website is a way to give information to your existing customers, attract new customers, contact and be contacted by customers, and also gives you a way to sell your items to far more people than you would be able to otherwise.

Blogs Are Still Very Relevant

If you thought blogging was something which would disappear into the ether, you’d be wrong. Blogs are still vitally important to any business, and provide a way to communicate directly with your current and prospective customers. You can give information, ask for ideas, and connect with these people, and when it is all linked seamlessly to your website, you should be looking at greater sales.

Email Marketing is a Big Thing

Emails have taken over from regular mail, and that’s great news because it’s far easier to fire off a bunch of emails to clients than it is to write to them individually. This allows you to be able to give information very easily, e.g. new offers, discounts, promotions, and this can easily lead to a sale. Linking everything to your social media accounts means you can also collect more customers to email over time, and this should bring more sales to your business.

Social Media

This is the very key towards business success, and provided you harness its power in the right way, you’re looking at far more leads than you probably could ever realize. Make sure you utilize all the big hitters, such as Facebook, Instagram, and Twitter, linking everything back to your website. A blog also links everything together easily.

A word of warning however, avoid anything controversial when posting on social media. There is a difference between catching attention for the right reasons, and for the wrong ones.  

These are just some of the easiest ways you can generate leads for your business, whether new or old.

 Click on the link below to book a meeting.

- Written by: Jag Bath

Should You Register For GST/HST?

Should You Register For GST/HST?

Should You Register For GST/HST?

Anything related to business and taxes can be confusing, especially if your business is relatively new. Lately there has been a lot of noise about GST/HST, and many people are confused about whether they should register for it or not. Most people will tell you that they’re going to wait for registration until their sales reach a set amount. The reason they are saying this is because they really don't know the answer to the question.

It’s a grey area, but it’s one that you need to think about carefully.

So, Should you be Registering for GST/HST 

Basically, if you don’t register, you will end up billing your customers more, because you’ll need to add on the GST/HST percentage pertaining to that particular province. This GST/HST amount will then be sent to the Government. Of course, that means you can also claim back the GST/HST amount you pay on any purchases from those who have registered. This is called an ‘input tax credit’, and you will deduct this from your tax return at the end of the tax year.

How Does a Business Register For GST/HST?

You can do this online quite easily, using the Business Registration Online facility. Once this is done, you will receive a GST/HST individual number and you will use this unique number when filing your returns at the end of the year. Strictly speaking, you don’t have to register for GST/HST until you start to earn an excess of $30,000 revenue per year. If you want to register before you’re at this level, you can do so.

Why would you do this before you reach the set amount? There are a few advantages:

●      You’re likely to spend more than you earn in the first few months of opening your business. You can claim back the GST/HST you spend, which could then mean extra cash in the bank.

●      Being registered and charging for GST/HST looks more credible and professional to your customers. 

It’s important to weigh up the pros and cons before you decide to register for GST/HST early or not. This is entirely optional before you reach the $30,000 revenue point, but you should also be aware that the level at which this is charged depends on the province the business or service is based in and where the service is performed. This can vary the amount, so it’s a good idea to find out the cost of GST/HST in your province.

 There are also some businesses which are exempt from registered for GST/HST, so checking things out with an accountant beforehand will give you the up to date, relevant information you need. This is the only way to find out the correct details for your particular type of business. We know that every business is unique in many ways, and in order to be 100% sure, professional advice is the way forward for you.  

 Click on the link below to book a meeting.

- Written by: Jag Bath