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.

Click on the link below to book a meeting.

- 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. 

Click on the link below to book a meeting.

- 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 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


Why Placing Bookkeeping at The Bottom of Your Priority Pile is a Huge Mistake

Why Placing Bookkeeping at The Bottom of Your Priority Pile is a Huge Mistake

Bookkeeping or any type of financial record keeping might not sound like the most exciting of tasks, but it is one which is so vitally important to the effective running of your business. If you put this task at the bottom of your priority pile, you’re going to end up in a bit of a messy situation.

Whether you decide to do it yourself or you outsource it to a professional, bookkeeping is a vital part of a business to keep it thriving and growing. If you need a little more persuasion on just how important bookkeeping is in general, let’s explore the consequences and problems of not making your financial record keeping a priority.

Lack of Up to Date Information

Without your records being up to date and easy to obtain, you have no idea how well your company is doing financially. This means you have no idea how close or far away you are to your aims and goals, and you could also commit to costly opportunities which you think you can afford, but in reality, you can’t.

Stress and Anxiety

If your books aren’t up to date, you will constantly be worrying about getting into trouble with the CRA. You could be audited at any time if the CRA thinks that your books aren’t kept in a high quality manner, and if they find that these haven’t been filed correctly, you could be in for very hefty fines indeed. Backdated taxes could cripple your business, and then success won’t even be something you’ll be thinking about, survival will be.

Borrowing Options May be Limited

If you are looking to borrow money to invest in your business, you’re going to struggle to find anyone willing to lend you the cash without having up to date and accurate records to look at. If your books aren’t presented in the correct manner, and if you can’t answer any on the spot questions about your finances, you’re likely to get a ‘no’ to your borrowing efforts.

Last Minute Accounting is Costly

If the end of the tax year is looming, you’ll suddenly kick into gear and try to get your records up to date. This is going to cost you more than if you did it in the correct manner throughout the year. An accountant or bookkeeper is likely to charge you more for last minute tasks, and this will be a costly mistake.

Missed Payments are Very Likely

If you don't have a clear picture of your financial situation, because of poor record keeping, you’re very likely to miss payments on certain items, or you might overstretch yourself and find that you really can’t afford the contract you’ve signed up to. Mistakes such as this, not only cost a large amount of cash, but they also put your reputation in jeopardy.

Don’t make these mistakes, make bookkeeping a priority and find the best accounting method for your business. By doing this in good time, you will eliminate all these possibilities, and sleep much better at night!

 Click on the link below to book a meeting.

- Written by: Jag Bath

Bookkeeping Options For Your Business

Bookkeeping Options For Your Business

Keeping track and monitoring your business finances is a vitally important part of running an effective and successful business. In order to do this, you need systems in place which allow you to separate your business dealings from everything else, and accuracy is the most important factor in all of it.

To help you decide which is the best book-keeping and general accounting option for your business, it’s important that you consider all the options we’re about to discuss. Remember, every business is unique, and that means you need to come up with an equally unique way to manage your finances.  

●      Regular Bookkeeping - This basically means doing the books yourself. If you have a small business or you’re a very new start up, this is probably the best option. It’s not worth outsourcing your accounting at this stage, and spending a small fortune on a system you don’t need. This is something you can reassess in the future. You could however consider employing the services of an accountant to set you up initially and show you how to keep everything in order for the year.

●      Online Bookkeeping - This type of book-keeping allows you to view your accounts and financial information easily, but someone else does the hard work for you. Everything is stored digitally, usually in Cloud storage, and you have access at any time. This means you get the experience of a qualified accountant or bookkeeper, and you also get control too.

●      Outsourcing Your Bookkeeping Locally - You don't have to go to a huge company for your bookkeeping needs, it could be that there is a local bookkeeper you can use, and their services are likely to be cheaper. This person would sort out your books and records on a regular basis, but they would only come in when needed, perhaps a day or two per week or month. You may also need to employ an accountant to check everything is correct, but this is something you can review over time.

●      An Employed Bookkeeper - If your business is growing, then you could create the position for a bookkeeper within your business. This means you have access to that person during the working week, they can be familiar with every part of your business. This person is also likely to deal with the regular payroll and ordering, basically anything financial.

It’s important to think about every option carefully before making your final decision. You need to think about budget and time first and foremost, but you also need to think about whether this is something you want to learn to do yourself or not. Remember, bookkeeping comes with very strict guidelines and record keeping needs to be very accurate. Failure to do so can come with very dire consequences.

In order to keep your business ticking over, bookkeeping and accounting solutions are something you need to think about very carefully indeed. You also need to make sure that the person you trust with your financial records is extremely experienced, qualified, and that you trust them completely.

Which ever option you end up choosing remember the cost of hiring a professional is cheaper than hiring an amateur. If you disagree with this statement try hiring an amateur and keep us posted!

 Click on the link below to book a meeting.

- Written by: Jag Bath

Is Registering as a Professional Corporation The Best Thing For Your Practice?

Is Registering as a Professional Corporation The Best Thing For Your Practice?

There are many things to consider when starting a business, no matter what type of business it is. There are so many terms floating around that it can be hard to decide which options are best for you. Another of those terms is a ‘professional corporation’.  

In order to help you understand what a professional corporation is, and who can register, let’s explore the subject a little more.

A professional corporation is a business or corporation which delivers services and is regulated by a particular professional body, e.g. College of Physicians, Law society of Upper Canada etc. Professionals who want to offer their quality services via a company, should become a professional corporation.

To help narrow down the word ‘professional’, this pertains to the following types of occupations:

●      Doctor (Physician)
●      Dentist
●      Physician
●      Vet
●      Lawyer
●      Accountant
●      Engineer
●      Architect

Any job which is governed and controlled a professional association or body. This is the only type of profession which is able to register as a professional corporation.

You might wonder why you would want to set up a professional corporation if you really don’t have to, but there are of course some advantages to think about. These are mainly tax related and include:

●      You can utilize tax deferrals. This is the difference between the highest personal tax rate, and the lower small business rate. By registering,  you are able to defer tax payments to some time in the future, when you are within the lower bracket. This saves you money!

●      You can also utilize something called income splitting. This is when you pay a family member a salary. If the person is in a lower tax bracket, you can split the full tax amount between you and them, and you will save because of their lower tax bracket status.

There is however one drawback, and that is the huge liability issues. If you are sued due to a mistake or another complicated issue then the corporation which governs your profession doesn’t offer you any protection. It’s vital to check your insurance to find out the full scope of your actual protection from that end, however you will usually get some protection against creditors on money you’ve borrowed.

Before you make your final decision, it is vital that you read up on everything pertaining to professional corporations, to find out if you are going to receive any benefits or not. The liability issue is quite a prominent one for most people, but the tax relief is certainly attractive! 

This might not be the right option for you, but it is certainly something you should think about, in order to receive those tax benefits. In many ways, it comes down to the profession you are in, in terms of how risky the level of liability is. We live in an age where there is a ‘no fee no claim’ upsurge, and that means liability is always questionable. A high level of insurance protection is something you need to consider.

Click on the link below to book a meeting.

- Written by: Jag Bath

How to Pay Your Employees

How to Pay Your Employees

As your business grows and scales you would potentially need help which generates into a job creation. Once you effectively become an employer there are certain requirements in terms of how employed are to be paid. As an employer, you have a set number of different responsibilities which relate to the payroll process, and it’s vital that you read up and understand these, before you pay your first salary to any employee.

Employer responsibilities in relation to payroll include:

  • Paying Employment Insurance, known as EI

  • Paying Canada Pension Plan Payments, known as CPP

  • Paying income tax for your employee, on a rolling basis

  • Paying all of the above to the CRA for your employee by the 15th of every month

  • Producing an information return sheet, known as T4, which gives the employee a record of what they have earned, and what was paid on their behalf (the amounts above)

How to Calculate Deductions

In order to check that the correct amount has been deducted from a salary, the CRA has created a formula to check accuracy. This ensures (as close as possible) that an employee does not need to pay any extra income tax at the end of the tax year, as they will have paid all that is due throughout the year, deducted from their gross income.

When paying CPP and EI, both the employer and employee makes a contribution.

The good news is that you don’t need to manually calculate all of this, and there is an online payroll tool (calculator), which has been formulated by the CRA. You simply input the gross pay over a set period of time, and the results will tell you how much income tax, EI, and CPP you need to pay out of your employee’s salary. If you plan to use this please remember to enter the YTD values every time you run this calculator or your calculations will be off.  

You make the payments of these three items online, using your online banking service from your bank, or through the CRA portal, ‘My Payment’. Your employee should then be informed of the ‘net’ pay you’re giving them, e.g. the amount with the deductions taken away (their ‘take home’ pay) in the form of a pay stub.

 Do Apps and Services Make Payroll Easier?

How you work your payroll as a business is an entirely a personal decision. The CRA online calculator is a free resource and one which you can rely on to be accurate. Other apps, e.g. from third parties, are likely to have an added cost attached to them, and you will also need to learn how to use the app, which is time added on.

Small businesses, with just a handful of employees, could probably use this online service quite easily, and provide employees with their T4 returns at the end of the year. If however you are a larger business, you may like to think about using an app or outsource service, to streamline the payroll process.

 Finding the correct app or service for your business is a time consuming process, but it is one which is vital that you get right. Consulting with your accountant and asking for advice is always a good way to go. A few available payroll systems include Wagepoint, QBO Payroll, Payment Evolution, ADP, Payworks, and Simplepay, and all of them are online options.  Research is vital, in order to find the correct payroll solution for your business.

The requirement to pay?

The requirement to pay is sort of like the blue screen of death #Microsoft. It’s not good news ever. It is a common misunderstanding by new employers that you can just pay the ‘net pay’ to the employee and postpone the payment to the CRA as the funds are needed for immediate business growth needs. However, please note that Payroll deductions are considered “trust funds” and are funds that should be kept separate from the general bank account. Businesses who do not adhere to the requirement to submit the PD7a and the payroll remittances on the 15th of the month may be hit with a ‘requirement to pay’ notice.

This requirement to pay notice essentially a bullying tool used by CRA collectors who try to collect money for the payroll taxes and after a few unsuccessful attempts at contacting you they will hit the business owner with the requirement to pay which essentially freezes the bank accounts for the business. We have had clients come to us to get the freeze off their bank accounts and I can assure you that the CRA will not be reasonable or understanding if they are at this stage. Negotiating with the CRA at this stage generally is better with a Tax Advisor and should never be done by yourself.

The key take-away is never use the payroll trust money to fund business operations. It’s far better to get a financing loan to settle these types of short term needs of capital.

 Click on the link below to book a meeting.

- Written by: Jag Bath

Utilizing Your RRSP Before Retirement Comes Around

Utilizing Your RRSP Before Retirement Comes Around

No matter how hard you work, you pay a large amount of your income in taxes. There is no way around this. You can work constantly for a year, with the hope of taking the following year off to go travelling, but the larger amount you earn in that year is going to be taxed abundantly. There is little you can do about taxes, but with a little planning, you can make some smart decisions.

The RRSP, or Registered Retirement Savings Plan, is a way to line your retirement nest egg before your working days are over. Of course, you’re going to be earning little, if anything, during your retirements years, so it makes sense to save as much in your RRSP as possible. The problem? Life gets in the way, and business revenue is in no way guaranteed. Just because you had a great year last year, doesn’t automatically mean this year is going to be the same. On top of this, there are savings, medical bills, charity contributions, and everything else which comes out of your salary. It doesn’t leave much aside for anything else.

Utilizing Your RRSP

We’ve mentioned that fact that if you earn more, you are taxed more. While the tax system might seem rather unfair, we can’t do anything about this very fact.

For instance, if you decide you’re going to work hard one year and take the next year off, as per our last conversation. If you earned $100,000 in one tax year, you would pay around $24,000 in taxes and nothing in the year you take off. If however, you straddle tax years with your earnings, you would spread your income over those two tax years and end up paying less, over a longer period of time. It’s about being savvy and doing your tax planning.

So, where does the RRSP come into it?

Whilst your RRSP is for retirement, it can be used in other circumstances. It gives you the opportunity to bridge any income gaps.  

How The RRSP Works in Relation to Tax

When you retire, your income is generally going to fall as compared to working rather significantly. The RRSP compensates you for the fact that you are earning very little, but you did well during your working years. When you pay money into your RRSP, you benefit from a little tax relief.

For instance, if you earn $100,000 in one tax year, and you pay $20,000 of that into your RRSP, you will not be taxed on the RRSP amount, and only the $80,000 surplus. If you wanted to, the following tax year you could withdraw the $20,000 out of your RRSP and that means it would transfer to your income amount instead. That reduces your tax bill for that following year, as you’ll end up paying around $17,000 in tax instead. That saving is quite considerable.

Basically, if you experience a drop in your income, you can withdraw cash from your RRSP, which would enable you to pay your taxes at a lower amount that year. Any money saved, helps.  

Of course, RRSPs are predominantly meant to be or your retirement years, so it’s always worth bearing in mind that you would be keeping a good proportion of money in that fund for the years when you won’t be working.

The Big Salary RRSP Tax Move – For business owners

I have a signature tax move that works well for business owners who have RRSP room. Please note your room grows at 18% of your gross employment income each year. The idea behind this tax move is to have the owner of the business take out $150,000 salary income and buy a $100,000 RRSP this effectively generates a huge refund as the total taxable salary is $50,000 and the $100,000 is tucked away for retirement.

This move also allows you to reduce your corporate taxes by taking a big write off. Even if this brings your corporation into a loss position that’s not a issue as you can use these “losses” as a carry forward and write it off against future profits. 

The Employee RRSP Tax Dilemma – For Employees

To invest in RRSP or not to is the question. This is the question asked by many employees each year. The practical answer is it depends on where you are in your current life. If you have other debts than generally it doesn’t make sense to invest in a RRSP and it might be better to pay down debt. Remember the RRSP is for the long term so you have to be careful on the investment.

Another tax trap that is usually generated from the RRSP is the big tax refund. You should re-invest this money back into your savings but if you end up spending this you have pretty much neutralized your tax generated savings.

Interested in a tax conversation? Let’s talk Tax I talk back =)  

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- Written by: Jag Bath

The key to Business Success Is Waiting for You at Home

The key to Business Success Is Waiting for You at Home

You’ve got that feeling: It’s time to strike out on your own.  That’s never been easier to achieve than right now with all the possibilities the modern economy has to offer to small home-based businesses. Starting a business has become easier than ever with the marketing methods available through the Internet and social media.

Enterprising entrepreneurs have found success in a variety of domains, from marketing to design to consulting. Consultation can be particularly lucrative if you’ve developed expertise in a certain area, gain the necessary certifications, and focus on a target market. However, regardless of your specialty, there’s a method to getting off the ground, finding clients, and bringing in solid revenue. Here are the essential steps.

Choose the Right Service

Nobody’s going to buy sand at the beach no matter how good the pitch is. A successful CEO writing for Entrepreneur recommends asking yourself a series of questions to identify the niche where you’ll thrive, and they include whether there’s demand for the product or service and whether it fills a real need in the world. Think hard so you don’t have to go back to the drawing board after wasting valuable time and energy.

Set Up an Inspiring Office

Work can be a pleasure in a pleasant environment, so put some time and effort into the space where you’ll be spending so much of your time. Start by finding a source of natural light,, whether it’s in a spare room or a quiet corner of the salon, and make that the focal point of your workspace. When it comes to your desk and chair, follow the principles of ergonomics and invest in some quality equipment, including a printer and scanner.

Create an Enticing Website

This is the gateway to your company, so it should accurately reflect what you do. Plus, more and more customers are looking for products and services online, making this platform vital to your sales. Every email that you send out should carry a link to your site where anyone can find out more information about your company and what you offer. This will save you a lot of time in convincing potential clients of your professionalism and expertise.

Invest in the Right Tools

The right tools include user-friendly software and web-based technologies. A start-up expert writing with Forbes recommends a number of products with a broad range of applications, such as Google Analytics, which provides a treasure trove of information about who’s visiting your website so you can better understand your target market. EchoSign, meanwhile, allows you to send contracts to clients in electronic form for quick and easy signatures.

Make Time for Marketing

You won’t survive for long without clients. There are a number of ways to hook your first few fish, and the easiest of all is talking to friends, family, and old colleagues who may be looking for what you offer. Then, expand your reach using social media. Keep up these efforts on a daily basis, as well as completing projects in the pipeline, to ensure future revenue.

Stay Productive Every Day

Having a dedicated office is part of keeping on task, but not all of it. Maintain a regular schedule that begins with waking up and getting ready for the day as if you were back at your old company. Yes, that means putting on some proper clothes, as lounging around in your pajamas prevents you from clicking into work mode. Remember that there’s no one else there to pick up the slack, so you’ve got to put the nose to the grindstone. Remember, if you want to change the world ‘make your bed’ - William H. McRaven

Mind Your Health

With so much going on, it’s easy to forget your diet and exercise regimen, but that would be a costly error, leaving you susceptible to illnesses that sap your energy. Keep that morning jog in your routine, add a few more vegetables to your lunch, and stay hydrated. You may also want to consider a session of meditation or yoga, which are excellent means to relieve stress.

Stay positive. Rome wasn’t built in a day, and neither was any Fortune 500 company. It takes perseverance to be successful, and that’s something you’ve got.

 -written by Larry Mager

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Capex CPA – Named Top 50 Cloud Accountants of 2018!

Capex CPA – Named Top 50 Cloud Accountants of 2018!

The Future of Accounting is in The Cloud #Hubdoc

We are excited to announce that we made it on the list of the Best 50 cloud accountants of 2018! With our mission, we are helping many small businesses move their accounting needs to the cloud.

Technology is ever changing and that means that in order for a business to remain competitive, they need to stay abreast of changes and developments. Accounting is an area which many businesses overlook, because they have their own set processes in place, and those processes have worked for the last few years, so why change?

Why change? Because technology dictates that you must! 

Accounting is an area which requires vigilance and care, but it is also something which can be streamlined and adapted, to make it a less time consuming process. Switching to Cloud accounting is something your business is very unlikely to regret.

What is Cloud Accounting?

Here at Capex CPA, we acknowledge and understand the vital importance of staying up to date with technological advances, and as such we are now dedicated Cloud accountants, helping businesses to complete their accounting tasks remotely, without the need for extra hassle or stress. We use the most up to date Cloud technology to reduce costs, streamline your accounting processes, and as a result save you time and money. We’re also always on hand to help you with any issues, either via an instant messaging chat or even a video call!

But, what exactly is Cloud accounting?

Cloud accounting means that your accounts and financial transactions can be accessed via an online connection from anywhere in the world. If you’re travelling and you remember you need to add in a transaction, you can simply log in and get it done. Any of your staff responsible for accounting can do the same, and so can we, as your Cloud accountants.

There is no need to worry about security and safety, as your data is encrypted and saved across different servers, backed up accordingly. Cloud accounting is safe, effective, and seriously up to date. It also means that your financial information is up to date at any time too, as you are running in real time. There is no backlog of receipts which need to be added, no manual billing to be done, it is all synced and streamlined into your Cloud accounting software package.

The Accountancy Way Forward 

If you don’t believe how popular this endeavour has become, just look at this article about the sheer number of Cloud accountants across North America. You can see how quickly this has grown and how it doesn’t show any signs of slowing down. Of course, we would always recommend ourselves to help with your accounting needs, and our expertise and years of experience within the financial field backs up that claim. 

At the end of the day however, you need to choose an accounting solution which fits with your business, and which you feel comfortable with. Because Cloud accounting allows you to have complete control over your financial requirements at any one time, the future really is in the Clouds. If you remain stuck with your feet on the ground, you’re missing out on the major advantages that could be coming your way.

Special shout out to our Technology Partner Hubdoc for sending out the Top 50 swag! #HubdocLife

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- Written by: Jag Bath

When and How to Pay Taxes

When and How to Pay Taxes

Taxes are an important liability that you have to pay once or multiple times a year. With multiple types of taxes and business structures, it is not always clear which taxes you have to pay and what are the deadlines for each of these tax liabilities.

Adding to the overall stress of your situation are the interests and penalties that can hit you if you don’t pay your taxes on time. The penalties can put you into some serious debt and the excessive interests can reflect badly on your overall credit score.

So in order to avoid these penalties and ever so troubling interest charges, here is a guide to help you through this pressing dilemma.

Personal Taxes

We are starting off with the most obvious type of tax, which is personal tax; personal taxes are the taxes that you pay as a citizen of a country. These taxes vary depending on the income of every individual and are mostly based on the income that you receive.

Most Canadians, with respect to income tax, fill a personal tax return slip. On a personal tax return slip, you have to add all of the information about your income regardless of its specific source. This means that you will have to mention all of the income that you receive from investments, employment, or any other source. In this statement, you will also claim any and all personal deductions that you have as a result of any dependencies, donations, or medical expenses.

Now that you know what you are supposed to fill for your personal tax return, you should also know when to deposit this tax return form. If you are an employee and have no business or venture of your own, regardless of the size and the massive appeal, you should file your taxes before the 30th of April. On the other hand, if you are an employee that has small business ventures, you will have to mention them in your corporate tax statement.

Corporate tax

With personal tax out of the way, let’s move onto corporate tax. In order to file a corporate tax report, you will have to file a corporate income tax return. Here you will state all of the different ventures and business enterprises that you own. You must also add to this list your financial position, income, and expenses of your corporation.

 Your company has a total of six months to fill this corporate income tax return after its year-end date. Although you might have nearly six months to fill in a proper income tax report, you have to pay your corporate tax balance sooner.

For smaller corporations, you will need to pay your company’s taxes after the third month of its year-end date. This means that you have to pay all of your company’s balance taxes, before the sixth month and after the third month. However, larger corporations have a different deadline.

Other Taxes

It’s unfortunate to consider that even after you have paid your personal tax and your corporate tax, there are other taxes as well. Nevertheless, here are some other taxes that you should be wary of. In the case of you being registered to the GST/HST, your filing deadline is not set by a predetermined deadline; rather your filing frequency determines the deadline by which you have to pay all of your taxes. 


Filling, filing, and keeping track of all of your taxes is a very tough task, especially if you have to go through filling three forms almost every year, or worse, every month. So, one of the best solutions to all of your problems is using great software that can help you keep track of all of the taxes that you have to pay, software like QuickBooks.

QuickBooks is online accounting software that allows you to utilize all of its services at any time from anywhere. This means that you can file and fill all of your taxes and keep track of your accounting information on the go. What makes QuickBooks so special is the fact that it stores all of your data on the cloud that will prevent you from losing all of your data.

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- Written by: Jag Bath

What Are the Consequences of Filing my Taxes Late?

What Are the Consequences of Filing my Taxes Late?

For a business, it’s vital to know when taxes need to be filed and paid. Having said that, it’s possible that a late filing or a late payment might occur from time to time.  

While it’s best to avoid this at all costs, if it does happen, what are the consequences?

There are two situations here. First we have filing your taxes at the correct time, but missing the payment cut-off date. In this case you would have to pay the owed balance, and you would have to pay interest on that amount. If you file your taxes late, the situation gets more complicated. You would then have to pay a penalty for filing late, you would have to then file your taxes ASAP, and you would have to pay interest on the balance of tax you owe.

It’s worth avoiding both situations, but filing late is the more costly and difficult to sort out of the two.

Let’s explore a few examples, just to make it a bit clearer.

Filing Your Personal Income Tax & Corporate Income Tax Late

In this situation, you would pay a penalty for filing late of 5% of your tax amount, and you would have to pay 1% of your amount for each late month (up to 12 months maximum). So, if you are filing taxes of $100,000, and you’re late by just one month you’ll have a $600 penalty straight out of the gate, before the interest amount. For just one month, that would be around $44 extra, but remember that interest rates fluctuate.

If you happen to be late again, your penalty and charges will be more the next time.

Filing Your Sales Tax Late

It’s harder to calculate penalties for late sales tax filing, but you can get a general idea. A 1% penalty of your owed balance begins the process, and then an extra 25% of the penalty is paid for every single month you are late filing.

As you can see, it’s really not worth being late if you want to avoid unnecessary charges in an economy which is tight enough as it is!

Avoiding Late Filing Penalty Charges

Make sure that you know 100% when your filing needs to happen by and do not miss the deadline. It’s that simple.  

If you have special circumstances which you know about, i.e. you simply know you’re going to be late filing, estimate how much you think you’re going to need to pay and pay that amount before the final deadline.

If you’re strapped for cash, you could opt to file and estimate. This isn’t a good choice, but as a worst case scenario it is better than not filing at all. This means your return will be filed before the deadline, and then when you have sorted your finances out, you can submit an amended return. If you find that you owe extra, you may owe a little interest on top.

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- Written by: Jag Bath

How to Set up a Business in as Little as 24 Hours 

How to Set up a Business in as Little as 24 Hours 

With a flourishing economy, it’s no wonder that more and more people are opting to open their own businesses in Canada. The process can seem complicated at first, but a little research and know how will show you that it’s actually easier than you might think.

Let’s explore the process to setting up a business, in as little as just 24 hours.

Business Planning

First things first, you need to have a business plan in place. You need to know what your idea is, you need to have marketed it, and you need to have completed a plan which will help you secure financial backing to begin the setting up process. 

The process of creating a business plan includes:

  • Market research and analyzing the results

  • Ideas on how to market your brand and create sales

  • Choosing the type of business you’re going to opt for

  • Creating a name for your business

  • Researching and understanding the rules and regulations which are attached to your type of business

Your business plan can then be created, using this information. Ensuring your business plan is as detailed as accurate as possible will help you with the next step.

Securing and Setting up Business Finances

If you require help setting up your business then you will be reliant upon your business plan to do the majority of the talking for you. Again, this is why your business plan needs to be bulletproof. You can then approach banks and other financial institutions for help.

From there, you need to organize your financial situation, to ensure that you have enough capital to start your business, as well as a list of the things you need, and their costs. Having a firm grip on the financial management of your business from the start will help you achieve success.  

Registering Your Business

Once you have completed the two steps above, you will now need to formally register your business. This means incorporating your business, which can be done online. For this step you will need to have a business name, and complete the various paperwork. You will also need to have an office address to register at and a Board of Directors in place.

Ensure the forms are completed correctly and pay the fee. Your application will then be processed.

Managing Your Business Activity

Whether your business is being carried out completely online, or it is in a bricks and mortar establishment, you need a website. This will help you to generate more business. You could look into e-commerce, such as having a Shopify site, for example. It’s also vital to make use of social media channels, to reach more people and therefore drive sales and profits. Businesses which don’t use websites and social media are doomed to failure in this technological day and age so make sure you stay in front of your target audience.

From there it is about marketing the life out of your business to get it off the ground and on the road towards success.  

Happy new year and I hope 2019 helps you chase your dream. Start your business today!

Click on the link below to book a meeting.

- Written by: Jag Bath

Understanding Business Expense Claims in Canada

Understanding Business Expense Claims in Canada

The end of the tax year is almost upon us, and that means filing of taxes is due. It’s not all doom and gloom however, as there are certain things you can use within your business to lower the amount of tax you need to pay. These are known as ‘write offs’, or tax deductions, and knowing what you can and can’t write off is vital at this time of year.

Of course, you can’t just write off anything, and with the Government checking everything with a fine tooth comb, you need to be sure that you’re claiming for the right things only. To help you figure it out, here is a quick guide to the things you should be able to use as a tax deduction.

●      Legal And Accounting Fees - If you outsourced any of your legal or accounting tasks, provided it was related to your business, these can be used as an expense

●      Advertising costs - If you used anything like brochures, business cards, catalogues, etc, which was used directly to market your goods and services

●      Transportation - Provided your car costs were related to your business, or public transport costs related to your business

●      Uncollected debts - Also known as ‘bad debts’

●      Banking charges - Service fees on your business account

●      Business licences and taxes - Fees which are due to maintaining or obtaining the above

●      Technological service provider costs - Any fees which are directly used for subscriptions to Cloud storage or digital services (ISP)

●      Conference and seminar fees - If you attended any conferences or seminars to network and develop your business

●      Expert business advice - E.g. consultants

●      Interest on any money you borrowed to run your daily business

●      Insurance on buildings, equipment, or machinery for your business

●      Entertainment and meals - If you have to take out a client for business, there might be some lee-way here to use as an expense

●      Office renting fees

●      Supplies - Software, stationery, these are all things you can use as an expense

●      Postage cost for mailing marketing content to your customers and clients

●      Taxes on property, as well as any property maintenance costs

●      Employee salaries

●      Telephone costs

●      Utility bills for your business property

These are the main things you can use as tax deductions. Of course, there are a few others which have grey areas attached to them, and you should research very carefully before you try and ‘write off’ any other item not on this list. 

Overall however, understanding what adds up to a business expense and what doesn’t, can help save you a large amount on your outstanding tax balance at the end of the year.

Remember, you will need to show evidence of anything you ‘write off’, so if you are claiming for entertainment expenses upon taking a client out for a working lunch, you’ll need to have receipts and proof that this was indeed a business event. You should also maintain receipts, either electronic or paper-based, of anything else on this list. You will be asked to prove, it and the easier you can get your hands on the papers, the better.

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- Written by: Jag Bath


What is an Annual Federal Return?

What is an Annual Federal Return?

Running a business has several different pitfalls attached to it. One of the most dangerous, and unfortunately one of the most common, is not knowing what taxes to file, and when.

An annual return, known as ‘Annual Filing’ is something you need to do every year, and something you must not forget! If you fail to do so, you will receive an official letter from Corporations Canada which informs you that you have failed to file your return, and you are in default. If you do not file your outstanding return as a matter of urgency, your corporation may be subject to dissolution. This means they can close down your corporation.

The wording sounds harsh, and that is because it is. This is a serious issue and one in which you must ensure you a) adhere to on time, and b) address immediately if you do happen to receive that official-sounding letter.


Corporations Canada is the agency in charge to maintain the federal incorporations to collect and keep all information updated. This task is also completed by service Ontario but for Ontario incorporations and all respective provinces have their own agencies that maintain this task. Think of this agency as a renewal of your health card or driver license except in the case for the federal corporations you need to renew each year. Sounds like a cash grab right?


If you have incorporated your business in Canada itself. At that point, you will have decided whether to incorporate provincially or federally. If you have opted for the federal route, you will need to complete an annual return.

This is a document which is legally binding and tells Corporations Canada that you are doing business actively. It also gives them important information on your address and anything else which might have changed, as well as the names of your current Board members. Again, this is about keeping their records up to date. If you fail to do this, you will receive the above described letter from Corporations Canada themselves, and you will need to take action immediately.

The ironic thing is, filing your annual return is very easy to do. It takes just a few minutes to do online and it will cost you just $20 to file your return. It’s that simple. It may be that you give the job to your legal team to complete, as the annual return is in fact a legal document.

If you fail to submit your return and you do nothing about the reminder letter, in theory, Corporations Canada can close your company, although it would take two years to do, as you would normally be given extra time to get the return filed.


The seriousness of not submitting key and legal documents to the appropriate governing bodies at the correct times is not to be ignored. In the worst case scenario, your business may be dissolved, and in the best case, you are put through a period of stress and worry until the matter is dealt with and closed.

Whether you deal with such matters as business owner, or you delegate the task to your legal team or other member of your organization, double checking that the correct documents have been filed at the correct time, is key. If you can do this earlier than the deadline, all the better, and the less you have to worry about. After all, your annual return is so quick and easy to do.


If you don’t want to deal with an annual return every year than you might want to consider opening an Ontario corporation which does cost a bit more up front but there’s no extra compliance related to annual filings. However, if you would like to do business Canada wide it makes more sense to incorporate a Federal incorporation and deal with the $20/per fee per year.

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- Written by: Jag Bath