Why is Payroll Easier in The Cloud?

If you’ve ever attempted to run a small business payroll system yourself, you will know immediately that it is a process packed with potential pitfalls and time consuming tasks. Not only are you working on an area which you may not have the most specialized skills in, but you’re also responsible for paying people their wages, which in itself is a huge responsibility!

For that last reason we just mentioned, getting payroll right is vital. Your employees don’t spend all month at work for nothing, they expect to be paid the right amount, on time, and rightly so! In addition, accidentally overpaying an employee can be a time consuming issue in order to recoup the money back, and can be costly in the short-term for the business. If you want to keep your employees happy and morale high, while saving time and money, then it’s important to get your payroll system as right as can possibly be.

You have many options, and most small businesses opt to run payroll software themselves or outsource to an accountant or book-keeper to run the entire process on a weekly, fortnightly, or monthly basis, depending on how often you pay your particular employees. There is another option, one which has many benefits and also saves a huge amount of time. Why not use cloud accounting for your payroll needs?

Why Not Use Cloud Accounting?

Cloud accounting is what it sounds like, it’s all of your financial transactions, including your payroll, all done virtually and stored in the Cloud. You probably already use the Cloud for storing personal items, e.g. photos or videos on your cell phone, or you might use Cloud storage within your business, in an attempt to go paperless and save space. Opting for the same route towards your payroll saves you a huge amount of time and effort.

The reason that payroll is easier in the Cloud is simple - it’s all done in real time and you cut out the time consuming parts. Your cloud accountant and yourself will work simultaneously, and whatever one person changes or adds, the other person will see in real time. This means there are no misunderstandings, no having to wait to send important messages or emails over to the other person and for a task to be completed, and far less room for misunderstandings or problems. With a subject as important as paying your staff, cutting out the risk of error is vital.

You can also add new employees quickly, and your accountant will be able to see in real time what you have done, or perhaps remove an employee when someone leaves. You can generate and print out wage slips from your software and keep records of these in the Cloud, without clogging up your paper-based filing system.

Put simply, doing your payroll in the Cloud is a far easier, and a way more time efficient way to ensure that your staff are paid correctly and on time, while keeping the records that you need to keep.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Why Cloud Accounting Leads to Easier Record Keeping

Record keeping is the bane of many businesses existence. Knowing which records to keep and how long to keep them for can be an issue, but of course you also need to have somewhere safe and secure to store them.

There are many reasons why businesses are attempting to go paperless, with security being the main one, but increased efficiency has to come into it also. When going paperless, or simply cutting down on the amount of paper based records kept, there needs to be another option in order to keep the records you need and access them in the moments you need them. Cloud storage has changed the world in terms of storage, but when it comes to financial records, Cloud accounting is leading the charge forwards too.

Cloud accounting is a software package and service which allows businesses to employ the services of an accountant virtually. This means that all financial transactions and record are stored virtually in the Cloud, and can be accessed at any time by the business themselves or their accountant. Everything is always up to date, because everything is synced and kept in real time, and therefore accuracy is a given. In addition, mistakes are less likely because of the up to date nature of your financial records, and because you’re hiring someone who is highly qualified and knowledgeable in financial law and accounting techniques.

How Can Cloud Accounting Help to Make Your Record Keeping Endeavors Easier and More Efficient?

Because you need less paper! It’s that simple. You are utilizing Cloud storage at the same time, and you don’t have to worry about privacy because everything is encrypted more than once. You also have password protection and peace of mind that comes with it. Everything is backed up, and that means your records are literally in the ether, waiting to be pulled down if you need to look at anything or print anything out.

You do not need to keep endless reams of paper, which in itself causes a security and confidentiality risk. When everything is stored virtually and backed un to this extent, there is no need to have filing cabinets and no need to have endless print outs that you’re not sure how long to keep.

Put simply, Cloud accounting isn’t just a financial system that helps you keep a track of everything and allow your tax returns to be filed effectively and quickly at the end of the tax year. Cloud accounting is a way to store financial information safely and securely, so you can access it at any time you need to. No worries about things being lost, as your software will organize everything in a way which makes it super-easy to grab what you need on the go.

More and more businesses are opting to use Cloud accounting, rather than regular accounting services. Perhaps it’s time you got on the bandwagon too?

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Why Cloud Accounting is a Cost Effective Solution

For any business, decisions need to be sensible and they need to be cost effective. The whole point of running a business is to minimize outgoings, ensure systems are in place for productivity, and to increase your chances of a profit. By making poor decisions, you’re not ticking those boxes, and instead, you’re leaking cash instead of making it.

Many businesses choose the wrong option when it comes to their accounting methods. Let’s face it, this is an in-depth area which requires careful thinking and expertise in order to get it right. By overlooking an important detail, you could be running the risk of missing tax deadlines, not reporting the right information, and basically putting yourself in the firing line for a huge penalty.

For That Reason, Looking Into Your Accounting Services and How You’re Going to Do It Is Vital

Unless you have a degree or equivalent in accounting yourself, knowing the ins and outs of the financial world can be difficult. Many businesses choose to outsource their accounting requirements to a qualified accountant instead, and that’s certainly a sensible option if you want to ensure all boxes are ticked. There is a sub-category within that however, and if you don’t consider it as a reality, you might be missing out on a very cost effective option for your financial needs.

We Are of Course Talking About Cloud Accounting

Cloud accounting is, as the name suggests, accounting which is done in the Cloud. For instance, you probably store many of your photos in the Cloud already on your phone, but this is a huge cyber world which can be used for other purposes too. Many businesses use Cloud storage in order to avoid having filing cabinets full of paper, but Cloud accounting enables you to store all your financial information in that same secure space, while also having the services of an accountant (virtually speaking) at your disposal.

For instance, you can employ the services of a Cloud accountant anywhere you choose; they don’t have to be in the same state as you, and that gives you extra flexibility in terms of choosing an affordable option, or someone who is specialized in your business area. Once you’ve chosen that person, your accounting and financial records are stored in the Cloud, so both you and your accountant have access to them, and you can make changes in real time, which the other person can see instantly. This cuts down on misunderstandings and double workload, and it also ensures that at any one time, you know your financial picture, without having to make phone calls and check records.

Put simply, Cloud accounting is a more cost effective solution because it saves time. You don’t have to second guess anything, it’s all there in front of you right at that second. In addition, you are able to shop around for an accountant who fits your needs, without having to go with what may be a more expensive option, simply because you have less choice.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Is Cloud Accounting a Good Option For a Small Business?

A small business has less choice in terms of services than a large business. Would you agree?

The reason for this is cost. A large business will be able to afford to outsource certain tasks, opt for different services, and perhaps use technology to get a particular job done. A small business needs to watch their cashflow a little closer, until they start to grow the business towards ‘large business’ status.

Small businesses also have fewer employees than large concerns and that in itself means that many tasks need to be done by less people; i.e. someone who may not be fluent in sales may need to learn sales techniques, as well as their main role, which may be admin, just as one common example.

When It Comes to Accounting and Payroll, What Options Do Small Businesses Have?

There are two main choices here - firstly, a small business owner can do the accounting side of things themselves, or choose a member of staff to do it for them. This saves cash in outsourcing to an accountant, but it also increases the risk of a mistake, simply because that person may not be hugely experienced or qualified in financial law.

The second option is to employ the services of an accountant, but again, this can be expensive and there isn’t a real time option in terms of knowing the financial picture in the here and now. In order to obtain that picture, the business owner would need to arrange a meeting with the accountant or telephone them for an in-depth discussion.

There is another option, but it is up to the business in question to weigh up the pros and cons. This is Cloud accounting.

Cloud accounting requires certain software to be used, and enables a business to employ the services of specialized Cloud accountant. Because everything is stored virtually, i.e. in the Cloud, both the business and the accountant can access financial information at any time, and it’s all in real time. Obtaining an accurate financial picture is literally done in seconds, because you simply log on to the software and pull up the information you need. There is less chance of mistakes being made and double the work, simply because everything is there in that real time mode.

Now, is this a cost effective solution for a small business? In many ways, yes. Cloud accounting will enable a small business to concentrate on the here and now, and therefore know what position they are in at any given time. This helps with business growth, but it also ensures that less time is taken going over financial tasks that perhaps that person isn’t specifically trained for.

Time is money, and that also frees up small business owners and employees to be able to concentrate on growth, marketing, coming up with new product and service ideas, and also dealing with customers in a direct manner.

So, if we’re talking about time equating to money then yes, Cloud accounting certainly is a cost effective method for small businesses to use.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Five Ways Your Business Can Save on Taxes This Year

Nobody likes taxes, this is simply a fact of life. The other fact of life is that we have to pay taxes, whether we like it or not.

The good news is that as a business owner, there are a few ways you can utilize to cut down your tax bill a little, and therefore save cash year upon year. Of course, at first glance this looks impossible - you have to pay the tax that is due, right? Well, yes you do, but there are certainly completely legal ways which allows you to spread your tax or reduce it, while avoiding penalties and other late fees.

Let’s explore five ways your business can save on taxes this coming year.

1 Always File on Time

It might sound obvious, but the single easiest way to save on tax-related costs is to make sure that you file your taxes on time, to avoid late penalties from the CRA. These can vary in cost depending how late you are, and if you’re a repeat offender, you could be putting your business’ future on the line. Cut out the risk and make sure that you’re aware of when you should file, what you should file, and put plenty of time aside in the run up to filing season, so you’re not late.

2 Consider Cloud Accounting

Another way to make sure that you never miss filing time and always file the right information is to make sure you choose the right accountant. Traditional accountants are still a very high quality way to get the right information, but what about Cloud accounting? This is often a cheaper way to do your taxes and run the financial side of your business in general, while keeping everything in real-time. This cuts down on the chances of a mistake, and a mistake when filing your taxes could be costly.

3 Make The Most Taxable Deductions

Make sure you know what you can claim as a tax deduction, and make sure you claim for it! This can reduce your final tax bill down quite drastically in some cases, and a professional accountant will be able to give you up to date information on what you can claim back and what you can’t. Certain costs, such as home or office travel, costs related to operating, etc, these can all be deducted from your tax, therefore keeping cash in your business instead.

4 Move Your Income to a Family Member

Another popular way to reduce your tax bill is to transfer a portion of your income to a family member, usually a spouse, who has a lower tax bill than you do. This means you’re going to be paying less tax on that amount and you get to keep more within your business. Remember TOSI (Tax on Split Income) is out there and you need to be careful not to be caught up on this. Again, a qualified accountant will be able to give you more up to date information on this possibility and give you the best options for your personal circumstances. 

5 Use Tax Efficient Accounts

Finally, when investing your money throughout the year, make sure that you look into options which cut down on your tax bill. For instance, you get a tax deduction on your RRSP contributions, and TFSAs allow you to earn from investments and not pay tax on your withdrawals.

These are all ways you can save on your tax bill this year.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

How do Taxes Affect Divorces?

Divorce is an upsetting time, but there are many important things to bear in mind aside from your emotions. Taxes being one of them. 

The Canada Re­venue Agency, or CRA, deems you to be separated when you have lived away from your partner (married) for 90 days or longer. In order to be recognized as ‘separated’ in the eyes of the CRA, you need to live in separate houses, and you cannot live in the same space.

Asset Transfers

Once the divorce has been finalized you need to consider the taxation issues on the various parts of your divorce. For instance, as part of a divorce a couple will divide their assets up accordingly, completing what is known as the ‘equalization payment’ and the asset transfer. The equalization payments are not normally taxed, mainly because the CRA consider you to have previously paid tax on that amount. However, if you are transferring assets, these are subject to taxation. This would be the current difference between the market value at the time and what you paid for them at the start. This can be delayed however using a rollover provision. In order to be sure of this, it’s best to seek out professional advice from a tax advisor.

Child Support

If you have children, you also need to be aware that payments made for child support are not taxed. Similarly, child support isn’t considered tax deductible for the person who is doing the paying. That is something else to be aware of. Spousal support however is taxable on both sides, and this something you should seek advice on, to ensure you’re not missing any important details.

When your divorce is complete, it is vital that you let the CRA know of your change in circumstances. This is because your taxation details will also change. You are able to do this change online, if you are registered, or you will need to do this in writing and complete a RC65 form, which informs the CRA of your change in circumstances. This letter or online change will trigger the CRA into checking your particular situation and from there your taxation will change, and you will be informed of any refunds that you may be entitled to as a result.

Of course, divorce is a complicated time for all parties, without adding taxation issues into the mix. It is vital to get the right information on taxation from a registered accountant or tax advisor and also to ensure that the professional you choose is experienced in divorce and family law. By doing this, you know you’re getting the most up to date information necessary and there are no loopholes that you are missing.

Failure to inform the CRA of your change in circumstances could also have severe consequences in terms of back pay and a large taxation bill coming your way. Only by informing the CRA as necessary and ensuring that you get the right information from a registered and professional person, can you ensure you’re following the right route.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

How to Outsource Your Payroll

For a small business, outsourcing payroll might seem like an expensive and unnecessary step, but there are far more advantages to this than you might realize.

Firstly, if you’re not particularly experienced in payroll and perhaps you don’t have the time, outsourcing can free up your expertise and your time to be aimed towards places that would be better served. You can also take advantage of those with specific skills, e.g. freelancers who have years of accountancy and book-keeping experience, who know the smaller nuances of payroll, which you may not have the first idea about.

The only downside to outsourcing your payroll is that you have less control, but that is a disadvantage that can easily be weighed up against the positives. With all this in mind however, how are you supposed to go about it?

Hire a Cloud Accountant

Freelance accountants or Cloud accountants are the best option for outsourcing your payroll. This means that you communicate via telephone or email, or even instant message, and you can check details of your payroll at any time. The only problem here is that if there is a last minute change to your payroll, e.g. you have a new member of staff starting close to the cutoff date for pay that month, or there is an error that you need to fix quickly, you may find a delay. This all comes down to finding the right accountant too, someone who will be available to talk to you and fix problems quickly, without you having to wait around for a call back.  

For many large businesses, the idea out outsourcing payroll isn’t worth it. Most large businesses have their own in-house department and this department will handle everything to do with the financial aspects of the business. For an organization with a large number of employees, this is certainly the best option, because difficulties can arise on a day to day basis, and trying to contact and outsourced accountant in this case can be a tricky business. In this case, you would have to suggest that outsourcing payroll is best reserved for small businesses, medium sized businesses, and those who really don’t have the first idea where to start with putting together a system which pays employees on a regular basis, correctly.

There is also the formal documentation side of things to consider too, such as issuing employees with taxation documents. This needs to be done via the payroll department and again, if you don’t have specific experience, it can be a difficult area to master. 

Before you choose your payroll outsourced destination, you should certainly ask many questions about their systems in place and how they organize the various different companies they work for. By asking questions at this point, you can be sure you’re choosing the right company, and you also need to ensure that the cost of the service doesn’t outweigh the benefits. Only then can you be sure that your decision was the right one for your specific business.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Questions to Ask Before Choosing an Accountant

Choosing the right accountant can be the difference between sound and high quality professional advice, and advice which is far from accurate. We’re talking about specifics here, and in order to have financial advice that you can trust, which is tailored to your actual situation, you need to be sure that the person you’ve chosen is up to the job.  

There are countless accountants you can choose, but finding Mr. or Mrs. Right can be difficult if you’re not sure which questions to ask. Never simply jump in with the first choice you see; it’s vital that you delve a little and seek the answers you really need. Of course, you can choose a bricks and mortar accountancy office in your local area or nearest city, or you can opt for an online service if you prefer. Regardless of the route of choice, you need to be sure of your choice, and that means asking some of the following questions.

•   How long have you been practicing?
•   Do you have any specific areas of specialty?
•   Which software packages do you use for accountancy?
•   Do you have an accountancy partner, or will I be dealing with you specifically?
•   What are your fees and are there any extras I need to be aware of?
•   How do you communicate?
•   How often do we need to meet, and how?
•   Can you represent me in all areas, or just my local area?
•   How long as your business been established?
•   Do you have any testimonials of other clients I can read?

These are the basic questions you should be asking any accountant, and it’s expected that you ask these questions of several different accountants on your shortlist, before deciding on the correct one for you.

Knowing how long an accountant has been practicing and how long their business has been established will give you peace of mind that they have the specific experience you need, and by asking them about their software choices, you can check that they are using the most up to date packages available for their field. An accountant who is using an old fashioned or outdated package isn’t going to be the right choice for a modern day business.  

It’s also important to know whether you will be dealing with one specific person, or whether there are partners involved. You also need to speak to these partners at the same time, to ensure that you are familiar with their areas of specialty and their experience too.

Of course, fees are vital, especially for a modern day business, and you also need how often you will be required to meet up with the accountant for catch ups, and how they communicate if you need to ask a specific question, e.g. are they available over the telephone easily, or will it be via instant chat or email?

By knowing the answers to all of your questions beforehand, you’re able to make a choice which is correct for your specific business.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Tax Deductions You Could be Missing Out on if You Work From Home

More and more people are choosing to work from home and become self-employed. When you think about it, it’s hardly surprising; the freedom to be your own boss, arrange your working life around your home life, and no commute to face in the morning or during the early evening. Of course, by being self-employed and working from home, you also need to be sure that you’re covering your taxation issues properly, otherwise you face missing something important.

You are able to claim back taxes on your office at home if your workplace is where you do the bulk of your business and therefore where you earn your cash from, and provided it is used regularly for meeting people pertaining to your business, e.g. clients, customers, etc. If you don’t fit these descriptions, you are unable to claim tax deductions on your home working space.

How Much Can You Claim?

If you do fit the criteria above, you are able to claim back on a certain amount of the expenses triggered within your home. The amount you can claim depends upon the size of your home and how much of it is used for your business. For instance, if your home office covers around 20% of your home, you are able to claim back 20% for interest on your mortgage, property taxes, insurance, and utility bills.

It’s vital that you are careful when claiming back expenses when working at home, in order to avoid the CRA deciding to audit you. There are several expenses you can’t claim back as part of working for yourself at home, and you can only claim back anything related to your business in a smaller proportion, e.g. depending upon how much of your home it covers, as mentioned above.

Many home workers mistakenly include wrong details on their tax return, falsely thinking that the same rules apply for deductions at home, that apply for regular businesses working from business properties. That isn’t the case. There are more stringiest restrictions in this case, to avoid anything not specifically for the business being claimed back. In addition, if you are working remotely for a specific employer, you are unable to claim anything back for your home office if your employer has already included reimbursement in your pay. In this case, you would be claiming twice and then your return would be looked at extremely carefully by the CRA.

In order to ensure that you’re claiming for what you’re entitled to, and that you’re not mistakenly claiming for something you’re not entitled to, it’s vital that you seek out proper and professional advice on your business finances. Working from home is hard enough, with all manner of distractions coming your way, but not understanding the inner workings and nuances of taxation for home workers can lead you towards difficult waters. Ensure that you employ a high quality accountant, who is experienced in working for self-employed home workers, and you shouldn’t have any issues to face.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Independent Contractor Versus Employee

Businesses are flexible things these days, far more than they ever were in the past. We have countless options in terms of how to run a business, who works for you, how they work for you, and the actual way you ensure success. Every business is individual, and that means that you need to approach each business with a unique viewpoint.

One choice which many businesses are looking into these days is whether to employee a regular employee or whether to go with an independent contractor, e.g. a freelancer.

It’s a choice which has pros and cons in each camp. Let’s look at these in more detail.

Independent Contractor 
Pros
•   No need to find a place for this person to sit, e.g. pay for office furniture and overheads such as electricity and heating - they work entirely independently from home or another location
•   You have access to specific and high quality skills in a particular field
•   Independent contractors often work out cheaper over time, compared to standard employees
•   No requirement to pay for health insurance or other employee benefits 

Cons
•   You may find it difficult to work in such an impersonal way, e.g. if you don’t actually meet the person
•   Communication can be an issue if your contractor is in a different time zone
•   Finding the right person can be a difficult process 

Employee
Pros
•   This person is working within your office/organization and therefore management is far easier
•   You get to know this person and can therefore manage them according to their personality
•   Employees usually have more than one task, whereas a freelancer will usually have the one specific task to complete

Cons
•   Employees will cost you more over time, because you need to pay for employee benefits and you also need to pay for office overheads, such as heating, furniture, electric, etc
•   Employees may not have specialized skills and that may mean costly training courses need to be attended

As you can see, there are pros and cons to each option, so how do you make your decision? It’s a completely personal deal and something which you need to be mindful of for your specific business as an individual entity. Freelancers work wonderfully well for some businesses, and not so well for others. Conversely, some businesses prefer working with freelancers over regular employees. It really depends on the type of business you have and the types of tasks that you need to be completed.

As a general rule, independent contractors are there to do a specific, highly skilled job, something which a regular employee may not have the skills to do. For instance, you may hire an independent accountant to oversee your financial procedures. By doing this, you are tapping into carefully honed, up to date skills, and that person is an expert in their field. This passes major benefits onto you. A business is far less likely to hire an independent contractor for regular jobs, e.g. tasks which are done on a daily basis within the organization.

Which works for you?

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Signs it’s Time to Update Your Accounting Procedures

There are endless developments in the business world on a regular basis, and if you want to stay ahead of the game, and ahead of the competition, it’s important to be aware of these. Of course, from a taxation and financial point of view, it’s important to make sure that you’re still operating within the law, and that you’re covering all the tax issues that you need to cover. Failure to do this can land you with a rather large problem and a financial penalty to match.

If you’ve been happily ticking along with an accounting procedure for a long time, it might seem strange to attempt to rock the boat and change things up. The problem is, the more static you remain, the higher the chance that you’re missing something new. For instance, new taxation regulations might mean that you’re not actually covering a vital point in your old accounting procedure. It might also be that your business is growing and demands more of your time, giving you less time to dedicate to such financial issues.  

In this case, perhaps it’s time to upgrade your accounting procedures.

Do you still use manual accounting? For instance, do you use spreadsheets which need to be manually inputted, or (even worse) do you use a pen and paper? If you’re nodding your head to either of these examples then it’s certainly time to look at upgrading your accounting procedures, and fast!

Time is money, and by wasting unnecessary time on inaccurate and time consuming financial operations, you’re basically throwing cash away. Where is the sense in that?

You have a few options to look into.

Have it Taken Care of For You 

You can outsource your accounting procedures, e.g. hand responsibility over to someone else and let them deal with it all. Of course, this person will be a registered and highly experienced accountant, either in-person or virtually. You can do this via the Cloud, e.g. virtual accountants who work from anywhere in the world and update all your accounting requirements on an online platform, or you can hire a freelance accountant, who will work for you, but independently. It’s a personal choice, but one thing you do need to move away from is the manual form of accounting.

Your accounts can easily be done via accounting software, and this will save you a huge amount of time, whilst also ensuring that your financial records are more accurate as a result. If you choose Cloud accounting, you also have the option of updating your accounts anywhere, e.g. if you forget something whilst you’re at home. There are often other features within these software packages, such as the ability to automatically invoice customers, and your accounts being automatically updated when payment is made. All of this saves time and therefore money.  

The bottom line is that in business, if you stay still for too long you run the risk of being left behind. This isn’t just about the goods and services you provide, but the way you run your business too.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Online Sales and Sales Tax in Canada - What’s The Deal?

The vast number of businesses now offer some kind of online shopping facility, and that means a greater need to understand tax issues surrounding items bought online.

We’re going to talk about sales tax in Canada specifically, but it’s important to point out that you also need to think about the USA and the Wayfair Decision. This was a Supreme Court decision which basically means that Canadian companies also need to register, collect and also charge sales tax (with returns) in the USA.  

Let’s Talk Goods and Services Tax (GST) and Harmonized Sales Tax (HST)

These two taxes apply to the overwhelming amount of sales of goods and services from Canada. GST is currently 5% and HST applies to higher tax rates, at 13% (which covers sales to Ontario) and also 15% if you’re making sales to other parts of Canada, e.g. Prince Edward Island, Labrador, Newfoundland, Nova Scotia, and New Brunswick.  

Canadian business with sales of $30,000 or under do not have to register for these two taxes, however those with a turnover of more than $30,000 do. There are a few anomaly rules however, so it’s vital that you look further into this, to ensure you’re not missing anything. It’s also worth pointing out that businesses which are not resident in Canada but make taxable sales to Canadian customers do.  

Where Does The Online Realm Come Into Things?

Businesses who sell goods and services online will need to collect these taxes depending upon where their customer is located. For instance, it doesn’t matter if the business is located in Ontario, but if their customer is in Newfoundland, they will need to collect the HST tax at the 15% Newfoundland rate.

There is another anomaly to consider here, the QST (Quebec Sales Tax). This is a similar tax but it does have a few side issues to think about. If your business is located in Quebec you will need to be more familiar with this tax. In addition, a business which makes a taxable sale to Quebec will need to register also.

Other Taxes to be Aware of 

There are three other taxes that you need to be aware of if you’re operating statically or online. These are:

•   British Columbia PST - Charged at 7% on all goods which are purchased within the British Columbia province, even online.

•   Manitoba PST - Charged at a rate of 7%, similarly to the British Columbia PST.

•   Saskatchewan PST - Charged at a rate of 6% for those making sales within the region.

It is important to be aware of all tax issues, whether you’re selling online or not. The huge increase in online sales has made it more prevalent to ensure that taxation from these types of sales is done correctly. This doesn’t always follow where the business is based, and is often more about where the customer is based. With that in mind, businesses, whether large or small, need to be aware of taxation issues country-wide.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

When to Turn Your Hobby Into a Business

It’s an interesting realization that many big businesses actually began with someone who had a hobby. This is likely to have been something they did on a daily, or regular, basis, and as a result they began to grow their hobby into something more. If you can make money from something you really enjoy, surely that’s the fast track towards life and business success?

For instance, maybe you enjoy baking cakes, and you think about selling these to local bakeries, or making bespoke cakes to order. This is a hobby which could easily turn into a small business venture. From there, who knows where that may lead? Similarly, maybe you enjoy writing, and you start doing some freelance blogging for a few people - over time this could easily turn into a freelance writing business of your own.

The key question however is when to turn your hobby into an actual business, and once you do that, does it become less enjoyable?

It really depends on how you manage it all.

When Does a Hobby Really Become a Business? 

Simple - when you start to earn money from it. This needs to be a good amount of money and you need to be able to cover your initial costs, e.g. if you’re baking cakes and selling them on, you need to make sure that you’re making a profit on the items required to actually bake the cake. As you start to notice more orders coming your way, and more demand for your cakes, you can then make the decision to turn that hobby into a full-blown business.  

Of course, you can keep it all part-time and use it as a side-line to your regular job; you don’t have to go trying to become the next big thing if you don’t want to, but there are many large businesses which actually began life as a small hobby. It’s certainly something to consider.

Tax-wise you do need to be quite on the ball. For instance, if you are going to make your hobby into a business, you will need to register that business as a self-employed endeavor and as a result you will need to pay tax on the money you make from it. How much tax you pay really depends on how much money you make, so if you keep it part-time, your tax bill is likely to be low. You also need to do some research into other taxes you might need to charge as part of your sales, but this completely depends upon the type of business you have and what you’re doing with it.

The best advice for anyone considering turning a hobby into a business is to get some sound business advice from a registered accountant before making the leap. He or she will be able to give you the low down on costs, taxes, and whether or not it is going to be financially viable for you.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

How to Properly Deduct Start up Expenses

When starting up a business there are many things to bear in mind. One very important area of consideration is to ensure that you deduct start up expenses properly, to avoid unforeseen charges coming your way, and to make life a whole lot easier too.  

The CRA lets you deduct your initial start up business costs as business expenses, but you need to be sure that you are actually deducting the right things. This whole subject can be very confusing for a new business owner, and in that case it is vital that you get up to date and accurate advice from a skilled and registered accountant. These start up expenses also need to be incurred in the days after your business is registered and begins, otherwise they don’t fall into this deductible category.  

What Are Start up Costs?

These are the costs which are incurred to get your business started. So, if you’re running a bricks and mortar store, you would use the initial month’s rent, signs, displays, etc as your start up costs. If you’re going to be working as a freelancer, you would use a computer, desk, etc as your start up costs. In order for these to be classed as start up costs by the CRA you need to make the purchases (or incur the costs) during the first period of your business working, e.g. it can’t be purchased beforehand. In addition, these costs need to pertain to day one of your business starting.

The CRA states that business commitment date is when a business owner makes solid steps towards marketing their business, e.g. goods and services. If you purchase the item you want to use as a start up cost before the business commencement date, you may still be able to use deduct it as a start up cost, but it has to be a specific business-only product and you will need to get solid advice from an accountant on whether that item is applicable.  

How to Deduct Start up Costs

In order to deduct your start up costs you will need to file your first tax return. You can do this yourself or you can hire an accountant to do it for you; it’s a personal choice but expert advice is always something you should utilize when it is available!

You will fill out the T2125 form in order to file your return, which will cover your expenses and your income, and you will enter your start up costs on this form. This form is then submitted alongside another tax return, i.e your federal income tax.

To reiterate, it’s far better for a small business to seek up to date and professional advice from an accountant, than to try and do it alone and make a mistake. There are constantly shifting and changing rules in place when it comes to taxes and deductions, and in order to work within current rules, and accountant is the way to go.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Why Outsourcing Your Accounting Could be The Difference Between Business Success And Failure

Businesses have various different tasks to complete on a regular basis, besides the general selling and marketing tasks required for success. One area which should never be overlooked is accounting.

Failure to file your taxes on time, and failure to actually charge the right taxes in the first place, could lead you towards total business failure. It doesn’t matter how many customers you have, how well you’re doing, or how well your marketing plan is going, if you don’t have a firm handle on your accounting, you’re looking failure right in the eye. 

This leads us towards another question - should you outsource your accounting?

There are arguments in either direction, but in terms of getting everything right and done on time, you have to say that yes, outsourcing is a great idea.

Why Outsource Your Accounting Requirements?

The bottom line is that accounting can be a large task for someone who doesn’t know where to start. Even if you have basic accounting knowledge, running a business can take up so much time that accounting tasks can often get left to one side. The longer these are left, the bigger the job when it comes to ensuring everything is recorded and ratified in time for tax returns to be filed. Put simply, if you leave these types of routine tasks, they quickly mount up into something similar to a landslide.

If you choose to outsource your accounting, e.g. to a Cloud accountant or otherwise, you’re taking the entire task off your plate. You know that everything is being done in a professional and accurate manner, and you don’t have to worry about finding time to complete tasks yourself. This can be a huge weight off the mind, and can also make tax filing time infinitely easier for a business owner, whether large or small.

Why Could Outsourcing Equal Business Success?

Basically because you have more time to focus on the things that require your attention, e.g. business growth. If you’re juggling ten jobs at once, including your accounting tasks, how are you supposed to give 100% to anything?

Outsourcing means that you can focus your attention on the things that your skills are aligned to do. Not everyone has a natural flair for accounting and in that case, why not make use of someone who does have those skills? Outsourced accountants also ensure they are always up to date with new legislation and technology, so you don’t have that extra responsibility on your plate too. Rules are always shifting and changing in subtle ways, and if you miss something, you could end up with a large penalty or oversight on your hands.  

If you’re not sure whether outsourcing is the right choice for you, it’s best to shop around and look at rates, speaking to various accountants. By doing this, you’ll probably be more than reassured that outsourcing your accounting requirements really is the difference between business success and possible business failure.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Why Going Digital Could be The Best Decision You Ever Make

Are you a business owner who is constantly chasing their own tale? Do you end up doing tasks more than once? Do you ever really know for sure what the status of your business is financially?

If you’re nodding your head, you’re not alone.

Many business owners claim to be in this very situation. The thing is, you can easily turn all of this around by embracing the digital age, and going digital with your accounting endeavours.

There are many digital methods when it comes to financial subjects, but in this case we’re referring to accounting, with Cloud accounting software being one of the most popular and most used.

There are four main selling points here - time management, productivity, real time reporting, and accuracy. Let’s explore each one in turn.

Time Management

Cloud accounting software in particular will allow your business processes to be more streamlined. For instance, when you invoice a client, the invoice is automatically generated and sent to them digitally, and when they pay, the money is transferred in the same way and all your records are updated accordingly. All of this is done with the touch of one button. You don’t have to digitally create an invoice, send it, wait, and then update everything manually when they pay. That saves a lot of time.

Productivity

Because you’re saving time, that means you’re being more productive overall. You’re freeing yourself up to do other tasks, tasks which could help your business to grow and become more successful and profitable. Staff are also freed up from manual tasks which can be done extremely easily and automatically by your digital software choice.

Real Time Reporting

At any time you can see what your financial status is, and know that it is bang up to date. Much of the time, with manual records, you have to bear in mind that certain things might not have been inputted yet, or there are invoices awaiting payment which you have to remember. With digital methods, that’s not the case. Everything is shown there and then, giving you a clear picture at that moment in time. This can help with business decision making.

Accuracy

Of course, digital methods of accounting are also more accurate, and generally free from human error. Because everything is synced and streamlined, the various parts of your financial picture communicate with each other and ensure that nothing is missed. This is vital when the end of tax year filing time comes around.

As you can see, these four benefits are certainly huge. This is why going digital could be the best business decision you ever make. There is nothing to fear about this change either, as digital accounting software, such as Cloud accounting, is actually very easy to use. You can also employ the services of an experienced Cloud accountant, so you don’t have to oversee anything yourself. Even more time saved, and a higher level of productivity achieved!

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

The Pros And Cons of Doing Your Own Accounting

As a business owner, you have several decisions to make every single day. Some of these are small, some are large. One of them should certainly be about the accounting processes you adopt.

Do you currently do your own accounts, or do you hire an accountant to do them for you? Do you use digital methods, or do you opt for manual accounting?

There are many choices to make, but more and more businesses are actually choosing to save cash and do their own accounts.

Not sure if this is the right route for you? Let’s explore the pros and cons of doing your own accounts.

Pros of Doing Your Own Accounting

These are the advantages of choosing to do your own accounts.

•    Money Saved - By doing your own accounts you’re saving cash. You don’t have to pay an accountant, and in some cases this can be quite a lot of cash saved. This can then be put towards other parts of your business, or growing your success faster as a result.

•    You Have Total Control - Because you’re the only one doing your accounts, or a person within your office, that means you have total control over your finances, and you don’t need to discuss anything with a third party. This can save time and help you make decisions faster.

•    You Can Change Your Processes Easily - If you want to make changes to the way you do your accounts, you can do this far easier if there is no-one else involved.

Cons of Doing Your Own Accounts

There are of course downsides to doing your own accounts.

•    You’re Missing Key Knowledge And Experience - An accountant is a professional who knows their business like the back of their hand. By choosing to do your own accounts, you’re missing out on this experience and knowledge, which could detrimentally affect your business and its financial future.

•    It is Easier to Make Mistakes - Unless you have an accountancy background, or you’re extremely knowledgeable yourself, it can be very easy to make a mistake or miss something completely. This could be a huge issue when it comes to filing your taxes.

•    Tax Filing Time Will be Stressful - When tax filing time comes around, this is bound to be a stressful experience, because you have to do everything yourself.

These are the main pros and cons to take into account when doing your own accounts. There are of course advantages to it, especially in terms of a good amount of cash saved on the salary of a highly experienced professional accountant, but you’re also missing out on their expert knowledge.

You have to make the right decision for your business, and take all aspects into account. Is saving money worth the loss of experience? Are you knowledgeable enough yourself to make this saving a reality? These are all key questions to ask, before you make a decision which could shape the future financial performance of your business, and in some ways, the future survival.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

The Main Features of Cloud Accounting Software

Businesses need to keep up to date with technology in order to continue to be productive and also to ensure that deadlines are met. For instance, the tax filing deadline is not something you want to miss!

Most businesses stick to tried and tested routines, especially for their financial endeavours. If that sounds like your business, then perhaps it’s time to look into more up to date, modern methods and understand the ways they may be able to help you.

Have You Heard of Cloud Accounting Software?

We regularly store items in the Cloud, e.g. personally or at work. This can be images, videos, or important documents, and we trust that our items are safe as a result. What if you could do all of your accounting tasks via the same kind of method?

That is what Cloud accounting software allows you to do. To really explain it in more detail, let’s explore the main features of Cloud accounting software.

Real Time Updates And Accuracy

Cloud accounting software ensures that all your financial information is up to date at any given time. As everything is synced, e.g. your billing processes, that means that whenever a financial transaction is completed, it will show in your accounts. This is a great feature, because it ensures that at any given time, your financial picture is up to date. When tax filing time comes around, this makes everything a million times easier. You can also check your financial picture at any time, and know that it is up to date too.

Automatic Billing and Invoicing

Most cloud accounting software packages allow you to create automatic billing and invoicing. This means that your workload is effectively reduced. You no longer have to manually create an invoice and send it to a client, and then add the sale into your accounts. Everything is synced and done together, and your financial information is updated at the same time. When the client pays, your entire synced software package communicates this to the appropriate records. No more chasing clients and not being sure if they’ve paid or not!

The Facility to Scan Receipts And Cut Down on Paperwork

It may be that as part of your business claims on your tax return, you need to show evidence of purchases, e.g. receipts. You can usually scan these into your software and they are all recorded in the same place. This cuts down on paperwork and also ensures that documents aren’t lost.

You Can Pull Off Reports at Any Time

We’ve mentioned that Cloud accounting software is always up to date, and that means you can pull off a report of your current financial picture at any time. This ensures that you are always aware of where your business is financially, and you don’t have false information to work with.

Basically, Cloud accounting software ensures that everything is synced and streamlined. You are no longer doubling back on tasks, and you have a clear picture of how your business is doing at any given time.

 Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Is a Cloud Accountant an Impersonal Choice?

Have you heard of Cloud accounting ? By reading this article the chances are that you have. If that’s the case, you will know that Cloud accounting is the buzz term in the business finance world, and it is a wonderful tool which can help you streamline your financial picture, making life infinitely easier come tax filing time.

Within this, you can decide whether to use the Cloud accounting software yourself, or you can decide whether to employ the professional, expert services of a Cloud accountant.

The thing is, because everything is digital, and you don’t actually meet this person, is choosing a Cloud accountant an impersonal choice?

Let’s explore.

What is a Cloud Accountant?

A Cloud accountant is a regular accountant, someone who is highly professional and experienced, but rather than working in a bricks and mortar accounting office, they work virtually. This means your accountant doesn’t need to be in your town or city, they can be absolutely anywhere.

A Cloud accountant works predominantly with Cloud accounting software, making them a professional in this type of financial planning. They can get the most out of this digital accounting method and they will be able to show you how to use your software to the best of your ability.

You don’t relinquish control over your software when you employ a Cloud accountant , because you will have joint access. Your Cloud accountant will do all the tasks that a regular accountant will do, it’s just that you don’t actually get to meet them. You can talk to them via online chat, and sometimes you can even call them and have an actual conversation, but you will never get to meet them in person.

Does This Make Hiring a Cloud Accountant Impersonal?

Not really. Provided you choose a highly experienced professional, from a company which has a fantastic reputation, why do you need to speak to them in person? You really don’t when you think about it. Provided you can contact them in some way to discuss an issue, e.g. via online chat or the telephone, you don’t have to have a personal working relationship with them at all. This means that having a digital accountant, in many ways, isn’t impersonal, it’s simply part of moving with the times.

Look at it this way, the number of people who are choosing to work remotely is growing every single year. Companies are forced to embrace this change and adapt to the way the future of working is shaping up. The same thing goes for the way we work with our financial picture.

Cloud accounting in general can bring many benefits to a business, and it gives an accurate and up to date snapshot of a business’ finances at any given time. When you add the power of a Cloud accountant to the mix you’re getting double the benefit, more experience, and a generally very accurate way to keep financial records. When tax filing time comes around, you’ll also find the entire process infinitely easier too.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

How to Avoid Chargebacks

Chargebacks are one of the single things to avoid in business. Not only does this cause time and effort, but it can be a costly experience which many small businesses simply can’t afford.

Thankfully, there are a few things you can do to try your best avoid such chargebacks from occurring. We should point out that this will not prevent them ever happening, but will certainly drastically cut the chances.

Firstly, what circumstances might force a customer to request a chargeback?

•   They never received the product they ordered from you

•   They aren’t satisfied with the service or the product

•   They received an incorrect bill or invoice

•   They have looked at their credit card or bank statement and don’t recognise where the deduction has come from

As you can see, such events can often be out of the hands of the business, so it’s best to put into place a few prevention techniques first of all.

Always Follow The Requirements of the Particular Provider

All credit card companies have their own set requirements in terms of how a purchase should be made via their card. For instance, some ask you to check the security code, some ask you to check the expiration date. Make sure that you follow that particular process, to avoid issues.

Have a Clear Description Which Appears on Your Customer’s Bill

When your customer receives their bank or credit card statement, make sure that your company is clearly marked. This will help reduce the chances of them not recognising the transaction and requesting a chargeback.

Address Complaints and Problems as Quickly as Possible

A lot of the time a chargeback can be avoided by simply dealing with the issue at hand quickly and promptly. By doing this, you’re cutting down on a complaint being made and a chargeback being requested. If you can placate the customer enough to calm the waters, you’ll avoid the issue and you’ll also ensure that you do your best to maintain the customer for the future. Remember, word of mouth marketing is still very important in the modern day, even with the digital tools we have at our disposal.

Make Sure Your Staff Are Trained

Make sure that your employees know how to conduct a credit or debit card transaction correctly, and this will cut down on issues which may appear down the line. This should form part of your initial training for all new staff within your business.

Know That You Can Dispute the Chargeback

If you have many chargebacks over a period of time, your merchant account company might have issues and request extra information on why this is happening. If you feel that a chargeback is unfair, do be aware of your options in terms of disputing it. You don’t always have to simply accept it.

These are simple ways which you can use to help chargebacks being a less frequent occurrence. Whilst there is no company that has never had a chargeback, it’s best to do your utmost to reduce them wherever you can.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team