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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

5 Most Important Business Tips for Ultimate Growth and Success!

5 Most Important Business Tips for Ultimate Growth and Success!

As Accountants we get to see a lot of small business leaders and small business bosses. The businesses that seem to thrive are the ones with the leaders. Here’s our compilation on the 5 most important business tips.

Running a successful business is not an easy job. It demands passion, time, attention, and most importantly planning. There might have been thousands of books written by authors about how you can become successful in business, and a few thousand about achieving success in life. #AudibleLife

You can find many articles, blogs, eBooks, and other content related to the subject, as content of this type is produced on a regular basis. Taking your business to the top is the ultimate goal of every businessperson, but not many live up to the potential.

So how can you become successful in today’s competitive business world? To begin with, it takes a lot of factors to transform a business into a success. You need to understand the market, study demographics, analyze what the consumers are demanding, and how efficiently you can price your products. And that’s just a start.

If your business is struggling in a specific area, now is the time to work and improve. Let us dive into some of the most useful business tips that you can apply today:

1. Stay Disciplined & Focused

Discipline and focus are two most important aspects for success in just about any field; however, working on distraction has become a challenging task for a majority of the disciplined people. This is something that is going to stay for a long time.

These days, in business, you need to understand the art of shutting yourself off when it matters. Though this process is by no means easy, if you are undisciplined and distracted from improving your business, you cannot reach to the top. And if you are unable to achieve these things, someone else will.

If it was easy someone else would be doing it.

2. Grow As a Leader

Once you tackle your fears and are ready to take the step of starting a business, you have already begun your journey to becoming a leader. Your entire success depends on the factor of how much you are planning to help others find their own. Businesses thrive when people work together, so if you are starting a new business, make sure that you are hiring like-minded people and work together as a team. That way, you will not only grow as a businessman but also as a leader.

A leader is not just about managing a successful business; it’s more than that. You should know the tricks to motivate others to join your team. Always believe in what you say or hear, be confident, and provide money for the services you are offering.

3. Get Competitive

Unless your business has an exclusive monopoly, you will experience a lot of competition in the market. Competition is everything, and the key to successful business growth is all about selling. You should know how to sell to excel and stay competitive in the market.

When running a business and competing with other players in the market, it’s all about having a unique selling proposition or USP. This is the factor that makes you better than your competitors. It can be anything related to your business; your product, price, location, but most importantly you.

4. Calculate Your Success

Everybody has a different concept for success. Some define success with passion, some with increasing wealth, etc. The best strategy to calculate success depends on a few key factors:

•      You should love your job
•      You should regularly achieve your target because It creates an impression that you are aware of your goals
•      You should like your product or service and reach out to the customers efficiently.

If you calculate your success by working on these three tips, you will not just become a successful businessman, but your product will also reach out to a broader group of people.

5. Know How to Get Things Done

Successful people in business understand the skills to motivate others and work towards a common goal. They have a unique personality with strong communication skills. They know how to talk and get things done. People that run a successful business are troubleshooters and problem solvers. They know the outcomes, the risks and obstacles involved in running a competitive business, and solutions to overcome problems.


All the tips mentioned above are successful for running a competitive business. You need to push yourself to the limits and remember it will all be worth it. Remember, everyone can start a business and become a entrepreneur, but not everyone can become a successful entrepreneur. There is a big difference the times are changing and new thought methodologies are now required to sustain your competitive advantage. You can’t expect to do business your grand-father’s way in hope’s of leaving a legacy for your grand-kids. Change is Constant let a Professional accountant help you navigate it!

Click on the link below to book a meeting.

- Written by: Jag Bath 

How Technology Has Modified an Accounting Firm

How Technology Has Modified an Accounting Firm

How Technology Has Modified an Accounting Firm

In recent times, technology has become an important element of the accounting and bookkeeping industry. Transformation in technology has changed the accounting profession, and it has certainly had a positive impact on many accounting firms.

The first remarkable change in accounting technology took place many years ago when firms started using software for accounting. Thus, the profession started progressing at considerable levels with significant improvements in modern technology.

These days, organizations use software for crunching complex numbers, analyzing data, and monitoring economic activity.

Effect of Technology in the Accounting Industry

Gone are the days when accountants used paper, pens, and calculators to verify ledgers and balance sheets. These days, advances in technology have changed the mindset of outdated financial processes, with remote control sessions and basic desktop software being a norm. This rapid change in technology has occurred to such extent that it has left our offices barren of a single file cabinet. #Hubdoc #ReceiptBank

Specialized Accounting Tools And Software

With a majority of word processing tools and software available in the market, technology has improved the accounting field and reduced margins of error that you would otherwise need to contend with. Even though some accounting firms still use the traditional Microsoft Excel for running ledgers and data entry, most organizations today purchase specialized software for accurate financial reports, simplified business ledgers, and data entry

This benefits the businesses and reduces the margin of error in financially secured firms that are better equipped to stay afloat.

Cloud-Based Systems

A noteworthy change in both bookkeeping and accounting practices is happening due to the introduction of cloud-based systems and software.

Cloud-based technologies allow small businesses and organizations to enter and edit financial information, and make decisions accurately. This technology is convenient for business owners and provides more access to accountants.

 A majority of accounting companies today are using cloud-based systems to streamline their processes. These systems provide firms with greater access to their data from anywhere. You just have to log in.

Mobile Accounting

With advances in technology, the usage of mobile phones has become more prevalent. There are now a number of mobile applications dedicated to accounting. These apps allow you to add receipts, send invoices, and prepare expense claims with just a few swipes on the screen.

These apps improve the connectivity between the clients and the accountants and give you access to your entire data, no matter where you are.

Demand For Strategic Training

By employing specialized software programs in the accounting firm, the need for basic accounting training has decreased. An accountant with access to a computer and accounting software can efficiently work on forecast modelling, statistical analysis and tax preparation services today without any particular training.

Accountants are no longer portrayed as number crunchers like they used to in the past, but instead, they are now considered as professionals working alongside strategic teams. These days, a majority of accountants are creating new processes, giving advice and executing future forecasts that a computer cannot do.

Effective Client Transactions

Digitizing operations and data is not just important for your organization but also for your clients. By digitizing your operations, there will no longer be a demand for on-site consultations, and both your clients and accountants can access the data remotely.

They will also be able to monitor, edit, and comment on their statements, discuss and plan out the operations through video conferencing.

Moreover, applications with customer functionality have authorized non-accounting professionals to understand what is going on with their finances more easily.

Accountants With IT Skills

As an accountant in today’s world, it is important to stay updated with the most current advances in technology to enhance your productivity.

There is a wide range of skills that an accountant should learn before applying at any reputable organization. Besides learning the common accounting practices, and communications, accountants should know how to apply these processes with IT programs.

While there are many professionals out there not capable of using modern Enterprise Resource Planning systems, all the professionals in the field should know how to integrate accounting with IT.

Click on the link below to book a meeting.

- Written by: Jag Bath

What is Working Capital?

What is Working Capital?

What is working Capital?

Capital is another word for money. All businesses in order to purchase assets and maintain their operations or to produce goods and services must have capital. In the most basic terms, ‘Capital’ is the money invested in a business to generate income. Instead of simply spending it like cash, capital is a more durable concept and it is used to generate wealth through investment. The term ‘Working Capital’ is a part of total capital used (or more technically capital employed) in the business, but it comprises of short term assets and short term liabilities only. ‘Working Capital’ is often defined as the difference between short-term assets and short-term liabilities. In simple words, working capital denotes a ready amount of fund available for carrying out the day-to-day activities of a business enterprise. Capital is the means of investments of an enterprise with long term consequences, whereas working capital is that part of capital used for short term financing like routine operations or for a term not exceeding one accounting period.

Importance of Working Capital in Your Business

Without working capital, you wouldn’t be able to stay in business. A business uses working capital in its daily operations. Any business should have adequate funds to continue its operations and it should have sufficient funds to satisfy both maturing short-term liabilities and upcoming operational expenses. Working capital is a common measure of a company's liquidity, efficiency, and overall health. It is actually a yardstick that measures whether or not the company has enough assets to turn into cash to pay upcoming expenses or debts. Because it includes cash, inventory, accounts receivable, accounts payable, the portion of debt due within one year, and other short-term accounts. A company's working capital reflects the results of a host of company activities, including inventory management, debt management, revenue collection, and payments to suppliers.

How Working Capital is Calculated

Thus, ‘working capital’ is the difference amount between short-term assets and short-term liabilities. To understand this clearly we must have an idea on what are the ‘short term assets’ and ‘short term liabilities. Assets are a company's resources— a useful or valuable things that the company or person owns and which give some economic benefit to a business. Examples of assets (both long term and short term) include cash, accounts receivable, inventory, prepaid insurance, investments, land, buildings, plant and equipment, and goodwill, etc.

Current assets are short term assets only either in the form of cash or a cash equivalent which can be liquidated immediately or within an accounting period. Examples of current assets are cash in hand and bank, debtors, bills receivable, short-term investments, etc.

Liabilities (both long term and short term) are the obligations or what a business owes to the outsiders. It results from purchasing of goods on credit, bank loan, payable accounts like salary payable, taxes due, etc. Current liabilities are short-term liabilities only of a business which are expected to be settled within 12 months or within an accounting period or a normal operating cycle. Examples of current liabilities are bank overdraft, creditors, bills payable, short term loan, etc.

Working capital is calculated by subtracting current liabilities from current assets. Working capital is the easiest of all the balance sheet calculations to calculate. Here's the formula you'll need:

Working capital = Current assets - Current liabilities

It's that simple. If current assets are greater than current liabilities, the company has a positive working capital, meaning it has extra cash on hand to fund growth projects. It also means the company has a nice safety net in place.

Say, from a company's balance sheet we find that a company has $1000 in the bank, $500 as cash in hand, $5000 as inventory and & $500 receivable from customers. Then its total of current asset is $7000. Now similarly, its balance sheet shows that the company owes $2000 to its suppliers, and it has short term loan amounting $1500. So the total current liability of the company is $3500. Therefore, the Working Capital of the company is $ (7000-- 3500) or $3500.

Why Working Capital Management Matters

If we divide the current assets of a company by its current liabilities, we get a figure which is called ‘Current Ratio’ (or working capital ratio). This ratio attempts to measure the ability of a firm to meet its current obligations. It can be used to make a rough estimate of a company’s financial health. Normally, a ratio much higher than 2 (i.e., current assets double the current liabilities) is a sign that you’re not properly using your funds – either you are carrying too much inventory or not capitalizing on extra cash by investing in growing your business. On the other hand, a Current Ratio below 1 suggests that the company may not be able to meet its obligations in the short run. Each business or industry might have its own ideal current ratio depending upon its practice. Acceptable current ratios vary from industry to industry and are generally considered between 1.5 and 3 for healthy businesses.

Hope this Blog post will help you to understand the importance of working capital and guide you to manage it effectively in your business. However, if you are overburdened with other responsibilities, or need some real professional assistance, we can help demystify and help navigate constant change.

We help our clients looking to get working capital loans to help finance their future growth. Have a question on your growth needs? let’s have a quick chat!

Click on the link below to book a meeting.

Written by: Jag Bath

Best way to buy an investment property?

Best way to buy an investment property?

Best way to buy a investment property?

After spending many sleepless nights and countless hours into a business the small business entrepreneur would ideally have extra cash saved in the corporation. This cash sitting in the corporate bank account is usually better optimized by investing than keeping in the bank. While meeting your financial advisor the business owner might invest in securities such as bonds, mutual funds and other securities. Others might opt to invest in buying real estate. This blog is for those individuals looking to buy a investment property in the most tax efficient way. Real estate deals add many layers of complexity as different decisions result in adverse tax and legal situations.

Personally Purchasing investment property:
If you purchase a investment property personally that means your name goes on the land deed. You will have to keep track of all the profit and loss that results from this rental property and report it on schedule 776 on your personal T1 tax return. This rental income gets included to calculate your ‘taxable income’ and the respective taxes will need to be submitted to the CRA. Please note that the initial funds used to purchase the investment property are funds that have been already taxed on the personal level.

Corporation purchasing investment property :
If you purchase the property through your corporation it’s the company’s name that goes on the land deed. Any rental income is added to the corporation tax return and the respective taxes are reported on the T2 tax return. Please note rental income is considered passive income and does not qualify for the CCPC small business deduction hence this is taxed at a higher rate than the 14% corporate tax rate for active income.

Bank Mortgages:
Purchasing a property under your personal name generally allows for more mortgage options in the market. Assuming you have a good credit score and have the necessary down payment and the required salary to meet the stress test you can walk on in any of the A list banks and walk out with a mortgage note payable.

A corporation that has not met the 2 years in business will have a tough time getting a mortgage. This is because the banks view the recently incorporated business to be risky and the banks usually avoid lending to corporations for investment properties.

Tax Decisions:
The tax decision really comes down to pre tax dollars vs after tax dollars. Generally keeping the money in the corporation is a better strategy than to take the money out to invest. If your holding or operating company has loads of cash and let’s assume the company earns $500k net profit a year and pays the corporate tax rate of 14% [2018 rates] this would leave after corporate tax income in total cash of $430k. Since this money is left in the corporation and not paid out to shareholders this money is considered to be pre-tax money.

If you want to purchase the property personally you would have to take the $430k out by way of salary and dividend and the personal tax bill can go as high as 54% so your tax bill would be $232k in this case. The total personal taxes are so high that it would make a lot of sense to use the corporation to invest pre-tax dollars ($430k) rather than the after tax dollars personally of $232k.

Personal residence exemption:
Generally, when buying your own home it makes sense to buy it personally. This is because of the Personal residence exemption which states that the gain on any profit from the sale of the real estate property is free of any capital gains tax. This tax exemption is in place to allow Canadians to utilize their mobility rights.

If you buy a property for the purposes of renting it out and the property has not been declared as a primary residence than that property will be subject to the capital gains tax on the sale of the property. Although such a rental property will be taxed for capital gains the tax doesn’t kick in until the property is sold.

Corporations in Canada do not get the primary principal residence exemption so if you are planning on buying a second property perhaps a cottage? It might be better to buy it personally.

A discussion with your lawyer before buying any real estate property is very important. Apart from the tax decisions there are some legal decisions that also need to be made. If a tenant sues they are suing the extra funds in the corporation as well. If a corporation buys a rental property and adds shareholders or plans to add shareholders than the initial rental property is also being sold part of that deal. You are essentially selling a portion of the rental property to the new shareholders.

If you are planning on buying the property personally than you can lower your liability by moving the deed name to your spouse with a hopefully lower liability than you. This will help to mitigate any potential law suits.

What’s my best option?
As you can gauge from the above there isn’t a cookie cut solution. The tax/legal solution depends on your income, corporate structure and future vision. Please reach out to your lawyer/accountant to consult on the best investment solution for you.

Let’s setup a quick call if you have questions: Click on the link below to book a meeting.

-Written by Jag Bath


Top 3 questions we get asked. Literally everyday!


Top 3 questions we get asked. Literally everyday!

If you have a business can’t you expense everything?
This is a common misunderstanding amongst new business owners. There are many benefits of having your own business and having the ability to “expense” business expenses helps to reduce your taxes. This is because the tax act allows for business owners to be taxed on Net Income which is the net of Revenue minus Expenses. You have to be careful here because not all your expenses can be expensed such as personal clothing, Gym memberships and LCBO liquor. Generally, your accountant will provide guidance and restrict the personal expenses so you don’t get burned when it comes time for CRA Audits.

Is my data safe in the cloud?
Your data is actually safer in the cloud than on a PC. On the cloud your data is stored behind servers which are protected by companies like Quickbooks who spend millions of dollars to ensure the security upkeep. Now compare this to your $29.99 antivirus program on your PC. The cloud also has the benefits and ability to safe guard your financial data as no one can walk away with it. With a PC desktop based if someone has the backup of your data they now have complete historical access to customers, pricing and other things. So short answer is yes the cloud is much safer in the long run and also cheaper when accounting for the risks of having a desktop based.

What kind of Support should I expect from my accountant?
It’s easy to make a sale but it’s harder to provide robust support. Client’s almost always leave a business because of customer service and lack of support. Most people are so focused on the ‘next sale’ that they lose vision of the bigger picture. It’s important to adopt technologies like screen sharing which allows our team to effectively troubleshoot and resolve any issues clients have. The after support is so critical to the success of your business that we consider sales as #2 and support as #1. Our clients become our sales agents because of the awesome support they receive.

Business owners usually rush to hire an Accountant on the basis of them having Accounting and Tax experience. Although having Accounting and Tax experience is critical for a good accountant a great accountant would also have real life business experience. It’s important to decide on a Accountant that has business experience so that they can share those insightful business knowledge with you. Ask yourself this: Wouldn’t you rather have a strategic finance partner than a number cruncher? 

Click on the link below to book a meeting.

- Written by: Jag Bath


How do I take out $800,000+ from the sale of a business tax free?

How do I take out $800,000+ from the sale of a business tax free?

The question on tax free income is always a recurring question we get in everyday practice. This is one of the most exciting Tax techniques used to provide a shareholder of a corporation access to Personal tax free money. The key here is personal tax savings! So let’s get into this.

Let’s say that John Smith has ran his small business with average revenues of $480,000 a year and he pays himself $100,000 a year. He’s now thinking of exiting the business to retire and enjoy other things in his life. There’s a buyer named Andrew in the market who is willing to pay $1,000,000 for John’s corporation. If John sells the shares of his small corporation to Andrew he will have been deemed to have a Capital Gain on the sale of his shares. Assuming John built the company from scratch and the adjusted cost base was $0 the total gain would be the $1,000,000.

Capital gain is basically the government’s way of taxing income which comes from the sale of assets or shares. In this case John has sold his shares and he will be taxed under the Capital gain tax. The great thing about the Capital gain tax is that it’s 50% tax free so that means that of the $1,000,000 only $500,000 of that cash will be taxable for the capital gain tax and let’s assume that $200,000 will be the capital gain tax amount. Once this tax has been paid by the corporation the rest of the money sitting in the corporation would be $800,000.

Maneuvering the left over money in the corporation to John is a tricky task. One of the best ways to take the money out tax free would be to use the Capital Dividend Account or referred to as the CDA account. This account allows a shareholder to not be double taxed when the funds are transferred to the shareholder personally.

Your accountant will calculate the CDA account for you which is a quite involved exercise. Next this calculation will be confirmed by the CRA for the CDA account. This part particularly takes a long time as the CRA are very slow at confirming balances which is usually 6-8 months time. Once the CRA confirms the total CDA balance, your Accountant would file a form referred to as the T2054 declaring the dividend being paid to be a capital dividend. This step is critical to get right as the penalties are punitive.

Penalties for getting the above wrong is highly punitive in nature. If you over reach on the CDA the CRA will assess 60% of the excessive amount declared to be the penalty. So if you miscalculated by $100,000 than the total penalty will be $60,000. As you can imagine trying this at home is not recommended and you should always reach out to your Trusted Tax advisor to discuss this strategy.

The exciting piece of this entire strategy is that John gets to take the $800,000 of money tax free to his personal bank account by only having to pay the $200,000 in corporate taxes he completely bypasses the personal tax. Now, John can invest his $800,000 in different securities that give him a return of 8 to 10% resulting in a net taxable income of $80,000 to $100,000 which matches the initial money he was taking out of the business in the first place minus all the work involved. 

Remember the goal isn’t how much money you make in your business it’s how much you keep from the tax man. Legally of course!

Click on the link below to book a meeting.

- Written by: Jag Bath

3 Tips for Succeeding with an E-Commerce Business


3 Tips for Succeeding with an E-Commerce Business

Most business owners will tell you that just starting out is the most exhilarating and stressful time of owning a business. The excitement and anticipation run high, but the funds run low. How can you make ends meet and ensure success for your new business? Our e-commerce tips will help.

1. Rely on E-Commerce to Boost Your Business
You may have heard that e-commerce can boost businesses, but you might not know exactly what e-commerce is. According to BigCommerce, “Essentially, e-commerce (or electronic commerce) is the buying and selling of goods (or services) on the internet. From mobile shopping to online payment encryption and beyond, e-commerce encompasses a wide variety of data, systems, and tools for both online buyers and sellers.” Because e-commerce is one of the fastest-growing aspects of retail today, business owners turn to it as a solution for growing their business. In fact, many find that they are more successful online than they are in a brick-and-mortar store because they can reach so many more customers.

There are several other reasons to rely on e-commerce, according to The Balance:

●      A website and online store establish your presence and improve your company image.
●      You can sell 24 hours a day, seven days a week, 365 days a year; you never close, and your customers             can always buy.
●      You can provide better customer support by creating videos, sharing frequently asked questions (FAQs),          offering product spec sheets, and making it simple for customers to contact you using a contact form.
●      You will have low start-up costs if you are starting from scratch online; you won’t have to purchase or                 lease a building, buy or rent vehicles, or hire excess staff.
●      You take advantage of the fact that the internet was built for business; customers are one click away                 from your online store, and you can accept orders and payments directly.
●      You have the flexibility of living and working from anywhere when you sell online. Simply set up your                 home office with any special equipment you might need, and you’re ready to go.

2. Put Your Business Online in the Right (Inexpensive) Way
The trick to relying on e-commerce is creating a website that appeals to customers and delivers a seamless shopping experience. Thankfully, there is a plethora of online website builders and services that help small business owners build their websites, even if you don’t have any web design know-how or experience.

Many small business owners who are just starting out choose a free website builder and then hire a website designer when they can afford it. These designers and developers have the experience needed to migrate your original content to your new site and to make the transition without affecting your existing customers.

3. Use Information Available Online to Boost Your Business
Today, customers rely on online reviews to make purchase decisions more than ever before. In fact, 84 percent of people now trust online reviews as much as they trust their friends, and 91 percent of people regularly or occasionally read online reviews. Because online reviews matter, you need to give your customers a way to leave reviews for your products and services. Consider emailing customers after they make a purchase to entice them to write a review, give you a star-based rating, or complete a customer satisfaction survey.

You also can create social media profiles for your business to give customers another avenue for finding you, and writing and reading reviews. Also, link to your social profiles from your website to make it easy for customers to start following you, and so they can share news and reviews about you with their followers. In fact, social media marketing is one of the best ways to increase sales and drive more traffic to your site.

You also can decide which products to sell and ensure you meet more customers’ needs by using information available online. For example, read reviews on Amazon or your competitors’ sites. Uncover what people like and dislike about the products, services, and companies and what they would improve. The more insights you can gather online, the better positioned you will be to meet needs and grow your business.

To succeed in business, you should rely on e-commerce. Put your business online by creating a website, online store, and social media profiles. Then, use other information available online to make sure you have found your niche market and are meeting customers’ needs.

Written by - Larry Mager

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Financial Spring Cleaning: How to Get Control Over Your Money


Financial Spring Cleaning: How to Get Control Over Your Money

For many Canadians, financial planning remains a stressful and elusive task. It’s not just about creating a budget and sticking to it; it’s also a matter of seeing into the future, in a way, to ensure you and your family are on the right track. That can be difficult to do when there’s never enough money to add to a savings account or when unexpected expenses drain what you have.

Fortunately, there are several simple things you can do to give your finances an overhaul. It’s important to keep up with spending for the entire family, not just for the sake of your checkbook, but for your own mental health. Money is a top cause of stress for Canadians and it doesn’t seem to matter how good or bad the economy is, because there are always bills to pay. That stress can leave you feeling depressed, anxious, or unable to function at the level you need to, and it can even lead to substance abuse in some cases. For more info about the link between mental health and addiction, read on here.

Keep reading for some tips on how to get control over your finances this year.

Look at your spending
The first step in taking control over your finances is to look at your spending carefully. Sit down with your spouse or partner and go over your bank statements for the past two months. Look at where your money goes, and don’t forget to factor in cash transactions. Outside of utility bills, rent or mortgage, and necessities like gasoline and groceries, what did you spend the most on? Remember that sometimes seasonal factors are at play too, such as having to buy school clothes for the kids.

Cut back
If you see a chance to cut back on your monthly spending, talk it over with your family members. Many families choose to get rid of cable in favor of a less expensive streaming service, or to get rid of a landline phone since they already have cell phones. You don’t have to be brutal with your cuts; if it’s something you enjoy, think twice before getting rid of it or simply cut back. For instance, if you subscribe to a streaming video service and receive DVDs in the mail as well, consider using only one of those.

Set a budget
Creating a budget can be tricky, but it’s important to sit down with your family and talk about spending and how to save. Your household budget should begin with a look at your necessary spending. Once those numbers are added up, look at what’s left and lay out the best ways to use it. You might decide to allot a certain amount for clothing or to start saving for a vacation or a new car. Whatever you decide, make sure you communicate it to the entire family so that everyone is on the same page. Doing this will help give you peace of mind as far as knowing what to expect each week and will help relieve some stress at the same time.

Look at your credit card use
Many of us rely on credit cards to get through the month, but if you can’t afford to pay more than the minimum balance, you’re only digging yourself deeper into debt every time you use it. Come up with a solid plan on paying off your cards and resolve to resist the temptation to open up new accounts when they are offered at retail stores.

Getting your finances in order is rarely an easy thing to do, but it’s absolutely necessary if you feel your family is overspending. Come up with a plan before making any big decisions, and talk to your loved ones about the best ways to stay on the right track.

-Article by Larry

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How to Protect Yourself & Your Wallet As You Venture Out On Your Own


How to Protect Yourself & Your Wallet As You Venture Out On Your Own

Whether you’re just submitting applications to college or finally stepping out into the world, gaining personal and financial responsibility is vital if you want success in life. Unfortunately, many young people are instead finding themselves burdened by finances due to irresponsible use of earnings. However, there are several ways you can secure your future by saving, implementing smart money management techniques and protecting yourself from life’s uncertainties. 

Acquire Self-Control
When it comes to your money, a little self-control goes a long way. Instant gratification seems fun but cumulatively can cause trouble for you in the future. Not taking care of your bills and other necessities can also cause great arrears which can lower your credit and put you at high risk for increased debt. 

According to, consumers are more willing to spend a considerable amount of money when using a credit card over handing over cash. By doing so, you aren’t actually saving any money at all. In fact, you can get into serious debt if you aren’t paying back those costs on time. When that debt accrues and isn’t paid back, this can put you at risk for garnished wages, bill collectors going after you, and even being sued. 

 Instead, stick to a budget, like the 50-20-30 rule which allows you to see exactly how and where your budget should be allocated. This rule builds a customized financial plan on a unique level since we all have various wants and needs with differentiating incomes.

Shake Off Leeches
Just because you need to save doesn’t mean you can’t go out and have fun. However, it’s important to become aware of money leeches, entities or people that drain your financial resources. A money leech ties itself to you and tries to stick around, but it’s up to you to no longer feed it. 

As a young adult, you will come face-to-face with various forms of temptations; some not so harmful, while others may be dangerous. However, not giving bad habits the time of day will help you to gain control of your own life. According to the National Institute on Drug Abuse, substance and alcohol abuse has risen for college-age students, due to peer pressure. An addiction or unhealthy habit can send you into a downward spiral with financial hardships, so become aware of how such practices can also send you into debt. 

Gaining the confidence to just say no to money leeches will give you the confidence to say no to other activities or things that don’t serve you. Save yourself headache (and money) in the long run by learning what constitutes a necessity versus an option.  

Financial Planning
With the right tools, anyone is capable of setting themselves up for a great future, financially. However, not everyone learns the proper way to manage money. Unfortunately, schools don’t teach financial management and money-saving skills are rarely taught at home, which is why so many young people today are accruing more debt than they can handle. However, it’s never too late to learn how to become a financially independent adult, which can keep you from living paycheck-to-paycheck and also puts you in the position to help others.

 One way of acquiring knowledge about money management is to utilize devices, apps and websites which not only teaches you to budget wisely, but helps you to see where your money is going and has long-lasting effects on how you view money and ways it’s distributed. You may even find speaking with a financial counselor to be useful. Financial counselors are there to help you avoid investment and tax mistakes as well as provide you with a deeper knowledge of how finances work. However, finding one that has your best interest in mind is of the utmost importance. 

While money is a valuable asset, your life is even more precious. Secure it by making the right decisions and creating a viable financial plan that will help you go far beyond your wildest dreams.

Article written by - Larry 

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Firm of the Future 2017 - CapexCPA


Firm of the Future 2017 - CapexCPA

Firm of the Future 2017 - CapexCPA

Quickbooks just released the newest firm of the future accounting firm winners who have been recognized for leveraging the key trends in the Accounting industry. The four major elements being the cloud, service, technology and power reporting. When these four elements are put together, they allow us to create a strategic partnership with our clients and become a Firm of the future.

CapexCPA applied for this contest, where a total of 15 firms worldwide were selected with 4 from each country being Canada, USA, UK and Australia. In Canada, Quickbooks ranked our firm as one of the top 3 cloud accounting firms. We feel honoured to be recognized as one of the firms of the future. At CapexCPA we strongly believe in our signature DNA elements to help our clientele. Below is our take on how we became a Firm of the future. 

The first DNA element is Cloud. 
We feel that using the same cloud accounting platform like Quickbooks allow our clients to understand the numbers better. The cloud eliminates confusion and helps with timely decision making. Keeping transparency is critical in establishing a trusting relationship with our clients.  

The second DNA element is Service.
We make every effort to respond to all emails, phone calls, texts and social media to help communicate with our clients. Providing speedy responses to questions is essential to play the Virtual CFO role. 

The third DNA element is Technology. 
Using technology in every facet from client on-boarding to the tax year-end and repeat. We only use the best in class software providers. Our app closet essentials include Quickbooks, Hubdoc, Wagepoint, and Plooto. We wouldn’t be able to run our Cloud practice without these software platforms. 

The fourth DNA element is Power-Reporting.
Providing our clients with strong analytical reports that extend the Profit & Loss and Balance Sheet is what helps to differentiate us from traditional accounting firms in the industry. Our clients love getting weekly/monthly cloud reports which help resolve real operational issues before they become problems. 

We look forward to working towards introducing a completely paperless and cloud based accounting experience for our future clients. It’s been an amazing ride thus far, and we look forward to growing and helping to pioneer the future of Cloud Accounting. 

Choose Change. Choose Capex.

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- Written by: Jag Bath


Starting your Business after a Career setback where to begin?


Starting your Business after a Career setback where to begin?

Starting your own business may seem like an overwhelming decision, but if you’ve recently suffered a career setback, it may be the best path for you. Not only will you be able to dictate what your responsibilities are, you may be able to set your own hours, find a business that you enjoy being in every day, and hire your own set of employees who will work hard to make your dream come true.

There are lots of details to consider, but with a good plan and some preparation, you’ll be ready to tackle anything that comes your way. The first step is to think about what type of business you want to start. Consider your hobbies and things you’re skilled at; if you have a college degree, you can apply it here. Your new business should be something you really enjoy, because it takes a lot of hard work to get up and running and you want to ensure that you’ll still be invested years down the road.

Here are some of the best tips on how to get started with your own business.

Think about the consequences first
Starting a business takes a lot of planning, and things don’t always go as planned. Think a few steps ahead and picture running your business on your own. Will you have the fortitude to handle it? Most small business owners work very long hours and don’t see much return on their investment in the first year or even two years; do you have enough money saved to get you through the lean times? Will your schedule allow for it? Write down all the pros and cons before taking any steps to ensure you won’t have any nasty surprises down the road.

Think hard about the type of business you want
All successful businesses start with a good idea. Don’t allow yourself to be drawn into a business concept that may only be a passing fad; instead, develop a solid plan and work from there. Ideally, it’s something you’re passionate about and/or have experience with so that from the beginning, you’re ready to jump in with both feet.

If you don’t have enough experience in any one field, think about becoming self-employed. This will give you the freedom to set your own hours and choose the type of business you want to break into, such as real estate. Becoming an agent will give you valuable experience and will allow you to work with people who might be able to refer you to new clients, meaning your money-making possibilities will only expand.

For more info on becoming a real estate agent, read on here.

Do some research
Test out the current market for the product or service you want to provide in your community and work your way out to see what the demand will be, and also to find out what competition you may be dealing with. If there is a similar business in your neighborhood, do some research to find out how they do things, what their customer base is, and what their price points are. This will help you decide how to proceed with your own concept.

Establish a budget
One of the most important steps in starting a business is to establish a budget and figure out if you’re going to need investors. Sit down with a financial advisor so that nothing is overlooked and think about what your startup costs will be, as well as how much you’ll need to get through the first several months to a year. Include funds for a storefront, if you’ll be buying one, as well as taxes, licenses, and funds for employees.

Starting your own business is a big job, so reach out for help from professionals or from people who have experience in the field. Garner support from friends and family, as well, so that the process isn’t so scary.

Article written by - Larry Mager

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We are your Accountant 2.0


We are your Accountant 2.0

Change is the only constant in the new age of technology. Technology changes companies and even entire industries might get wiped out. The days of looking at a set of financial statements to see how the business is performing are long gone. Small businesses require more relevant information on their business to help make the decisions of tomorrow.

In the past Accountants have played the role of what we call historians. Accountants would typically speak to the historical financial performance and assume that to be a viable representation of the future growth of a business is inherently flawed. Let's think of a practical example, If Rogers Communication loses 20 million in revenue it wouldn't be such a big deal had they lost 20 million cellphone subscribers. Take that in for a minute basically the market now reacts to new information such as the subscriber base which isn't represented in the traditional financial statements. The understanding here is that focusing on the bigger pictures leads to the bigger results i.e. higher subscriber base will bring in the higher revenue.

As such each business has what are called key productivity indicators. It's important to study these metrics as you can not make something better and bigger if you don’t measure it. Measuring can be a lot of administrative work and can be counter productive unless you use the cloud. The cloud can shape your business and empower you the business owner with just in time information. Imagine having the ability to check how your business is doing above and beyond the business bank account.

Imagine being able to run the Profit and loss, balance sheet and cash flow statements all by yourself or just running simple dashboards to see how you did from this month versus the last month? Being able to do projections and set sales targets with a few clicks of the mouse and done. Setting up targets is critical for growth and understanding why you didn't hit those milestones is what financial information should be used for. Reading past the numbers is what business owners require and need and delivering this in a robust and efficient way is what the new breed of accountants will need to adopt.

The 21st century business owner wants a new breed of accountant who plays as a linebacker while they play the quarterback. The days of seeing your accountant once a year are coming to an end and for accountants being a benched player are slowly drifting away. It's game time and it's a exciting opportunity to help each business grow and flourish.

Embrace the silver lining of the cloud and feel the difference!

Choose Change. Choose Capex.

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- Written by: Jag Bath


Top 5 things you need to know when buying a Business!


Top 5 things you need to know when buying a Business!

When buying or selling a business there are essentially two types of sales: an asset sale or share sale. The structure of the deal is important to avoid any unwelcome surprises. 
There are 5 main considerations you need to look for: 
1. Liability - With a share sale, all the assets and liabilities are translated to the new shareholders of the company. This means that the seller gets to walk away from any liabilities and the buyer would assume all responsibility for such. i.e. Pending tax returns or tax liabilities. As an Asset sale allows the buyer to essentially pick and choose the pieces of the business that are attractive the liabilities generally remain with the seller. 
2. Employees - In an asset sale, the non-union employees i.e. regular employees will not be taken by the buyer. More commonly, however, the seller will negotiate extended contracts for the employees so that wrongful dismissal claims from employees can be avoided. In a share sale, the targeted company's employees remain employed with the company as only the ownership of the shares are swapping hands. If the buyer chooses to retain or terminate the employees then the buyer will have to pay the severances accordingly. 
3. Complexity - Share sales are less complex than asset sales. An asset sale will require additional documentation of the assets being transferred over at fair market value and non-arm's length. In contrast, under a share sale the assets of the target company will remain within the company and only the shares and any shareholder loans would need to be accounted for. 

4. Taxation - Share sale - The proceeds of a share sale above the seller's adjusted cost base are taxed as Capital gains (50%) to be included as income. However, if certain conditions are met such as the business being a active business then the $824,176 lifetime capital gains exemption( 2016) can be used to avoid the capital gains taxation for qualified small business corporations. The capital gains taxation can be further reduced by using intercompany dividend transfer strategies. 
A buyer might prefer to do a share transaction to take advantage of the non-capital tax loss carry forwards (business losses) can be applied against future income. A share purchase also allows the buyer to avoid paying sales and property taxes on purchased assets. These taxes can be significant when combining the sales tax and the property taxes which can be avoided by implementing the right strategies. 

5. Taxation - Asset Sale - A seller will usually want the purchase price to be optimal to minimize the recapture of capital cost allowance previously deducted on depreciating assets. If the price paid for a real estate building was $500,000 the historical price recorded would have been that on the balance sheet. However, the fair market value of such a building in downtown Toronto today could fetch $1.5 million which would be hit with a 50% capital gain tax leading to a hefty tax bill. 
A buyer, however, will like to allocate as much of the purchase price as possible to the depreciating property so that they can take advantage of the higher tax depreciation expenses to offset income. The valuation of these transactions will be restricted by the fair market value of the depreciating property. The buyer will be hit with the property transfer tax on real property such as buildings and equipment and the sales tax on equipment or inventory. 
As you can imagine the complexities behind making such a business transaction requires a deep understanding of the tax act. It's always a good idea to get a second opinion and to structure the business deal so that it benefits both parties. Get a Capex CPA to help you keep more money in your pocket! 

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- Written by: Jag Bath


Finding the “Unicorn” Client?

Finding the “Unicorn” Client?

When starting off business you really have to consider how you will be targeting your potential clients. Having a high quantity of clients is great if you’re offering limited services and depending on your industry this strategy might actually make sense. However you get what you pay for and that holds true here. It is critical to anticipate the amount of effort and work every client will take before a pay day comes. Finding Unicorn clients is tough and keeping them is tougher but once you find those clients ensure you hold on to them because these clients are low cost/high profit. Additionally you might feel to genuinely go the extra mile for them. #Dedication

Clients today want the biggest bang for their buck which is understood but it is commonly not acknowledged by a new business person that every client carries a cost. Let’s look at McDonald’s for example each customer that drives into McDonald’s drive-thru carries a cost of $1.68 in advertising costs. If the customer only buys a Junior Chicken, McDonalds just lost money but they know you want a “combo” and their profit margins jump up by 600% #Strategy. In order to maintain healthy profit margins it’s critical to calculate the cost of a client by taking your cost of goods sold, hidden servicing costs plus your margin. Don’t just come up with an arbitrary price based off competitors as all these elements need to be embedded in your total cost of servicing.

The real pickle is when your competitors across town offer the “same” services/goods you are at a lower price. The client poses a valid question being why they should choose you? You need to be prepared to answer this question and no answer is better than explaining the value you bring to the table. Clients who appreciate value are more likely to remain loyal than those that are price sensitive. Learning to build and sell value is the best thing you can do for your business. Value is not tangible and this is when marketing really ramps up to help you stand outside the shadow of the price warriors in the market. Don’t sell yourself short as selling on value is a far better strategy to compete on than on prices.

It might appear that you are generating profits but once you add those hidden costs the story might change. If you think you signed a bad deal that’s okay! It happens just remember to cut your losses short and move on. Remember, Numbers don’t lie so believe what they say and make you’re decisions to stop the bleeding. Experience is an accumulation of many errors, learn from them and plan your next chess move.

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- Written by: Jag Bath

Why the name Capex?


Why the name Capex?

Quite recently at a networking event I got asked why did you name your firm Capex? Interesting question because I love explaining this one!

Capex is a finance term that stands for “Capital Expenditure” which is money invested by a company to acquire or upgrade, fixed physical, non-consumable assets such as buildings and equipment or a new business. So how does this all tie into the Capex name?

The driving factors of starting this Firm and choosing this name was to help educate small business owners on the benefits of Capex to the bottom line. Embracing change and making the necessary investment into your business is critical to stay cash flow positive. There are many unique challenges in every industry/business and Capex spending is used to mitigate these risks and gaps for the long term. The goal of this firm is to not only do your Governmental compliance work but also work together to build a more profitable business. We want to project the benefits of positive Capex investment which will lead to solid business performance and profitability.

Almost anyone can hire an Accountant for a business to do the taxes or bookkeeping but finding a CFO styled partner is a bit more rare. Apart from keeping the boat afloat we like to coach on business best practices and provide recommendations to better your business. Capex is helping one business at a time to focus on the big picture by laying down the necessary foundation steps in order for our clients to remain future-proof. We believe strongly in education and technology. Technology is part of the Capex DNA and without the efficiencies realized we would not be able to play the business advisory role we do for our clients.

We adore technology such as cloud accounting and cloud storage but more importantly we encourage our clients to also do so.  So to sum it all up in one word, one mission, one vision. Capex.

p.s. Capex is pronounced as "Cap-X" sort of like FedEx except CapEx :) Easy to remember see! 

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- Written by: Jag Bath