How to Avoid Awkward Client Conversations and Stay Professional

Let’s face it, awkward conversations happen to the best of us. But when you’re in the service industry and working with clients on a daily basis, these awkward moments can be even more nerve-wracking. Whether it’s trying to find out if your client would like to continue booking with you or asking them about their experience without making it sound like an inquisition, there are all kinds of ways that these situations can go south quickly. Your interactions as an independent business owner don’t have to be awkward and uncomfortable though; there are several ways that you can avoid awkward client conversations and stay professional at all times. Here is our list of must-know tips for staying professional when dealing with clients.

Before the Meeting

Before you even sit down with a client, it’s important to have a plan for the conversation. It’s crucial to stay as professional as possible in all of your client conversations, but this is especially important when you know there might be some uncertainty or discomfort on either party’s end. Before you head into the meeting, try to figure out what the conversation will entail. If you have any questions that you want to ask or even issues to address with the client, jot them down. This will help you to stay on track during the conversation, and it will also help you to remain as collected and professional as possible.

During the Conversation

This should go without saying, but remember to keep an appropriate volume during the conversation. If you’re meeting in-person, you’ll want to make sure to keep your voice low so that it doesn’t distract anyone else in the room. This can be especially important if you’re meeting with someone in an open office environment. If you’re meeting over the phone, be sure not to speak too loudly as well. Remember, you’re representing your business with every word you say and every action you take. Try to keep the tone of your voice as neutral as possible throughout the conversation. If you have any concerns about the client’s satisfaction with your work, you’ll want to keep an even keel. If you feel yourself getting upset or emotional, take a break and walk away from the conversation for a few minutes. This will give you time to collect your thoughts and calm down before resuming the conversation.

After the Conversation

Again, after the conversation is just as important as before and during the conversation. If you’re meeting with someone in-person, you’ll want to thank them for their time. This can be as simple as sending a quick email following up with the client and thanking them for their time. If you’ve spoken with the client over the phone, be sure to send them a follow-up email thanking them for their time as well. If you’re meeting with a potential client, you’ll want to be sure to follow up with them as well. This will help to show that you are professional and appreciate their time. Sending a quick email following the meeting will do wonders and let the client know that you’re serious about working with them.

Conclusion

The most important thing to remember when you’re dealing with a new client or one who you’ve worked with in the past is that you always want to stay professional. This can be easier said than done, but as long as you are prepared and have a game plan, you’ll be able to navigate any awkward client conversations. If you follow these tips and prepare yourself for the types of conversations that can go awry, you’ll find that these situations are much easier to navigate.

Capex CPA has qualified and experienced business consultants to help you with your Business Processes. Contact us today click on this link —> https://capexcpa.com/contact

-The Capex CPA Team

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How to Handle a CRA Audit on your Business

Operating a small business or start-up comes with a lot of stress.  One of the things you don't want to hear is “tax audit” but it still can happen.  For some reason, the CRA has chosen you either because of some red flag like late filing or just random happenstance.  If it does happen to you, here are some points to consider.

 Don't ignore the notice.  Deal with it immediately by contacting your preferred Capex CPA Tax consultant.
Here’s a list of other great Accounting firms for you to review Accounting Firms in Canada

 If you speak with a CRA agent, be polite and answer all questions but be as concise as possible.  If you start fumbling, the agent may become impatient and it is likely that you will provide some piece of information that the agent will target and extend the audit further.  In fact, it is best if you have your accountant deal with the CRA directly.  Tax professionals are able to help the agent with the information they need without extraneous details.

 Produce Your Records

 Make sure they are accurate and up to date.  In fact, the best policy is to keep them organized throughout the year.  If you find it a struggle, hiring a skilled bookkeeper may be well worth the money.

 If you were wondering, here is the general process for a CRA audit.

 •        You will receive notice from a CRA auditor by mail, phone, or both.  This notification will include the time span that the audit will cover and the documentation you will need to produce.

•        After you submit the documentation electronically, the auditor will begin the review.

•        The auditor will prepare and send you a letter notifying you of the proposed adjustments the auditor recommends.  You will have 30 days to offer a rebuttal. 

•        After that time, a final letter will be issued that will order:

•        No adjustment

•        Adjustment with the amount of additional tax to be paid. 

•        Adjustment with the amount of refund you are owed.

 If you do not agree with the assessment, you can file an objection.  This will extend the time for the payment of the extra tax until the dispute is resolved.  You also can file a complaint if you do not feel the agent's actions were unsatisfactory.

 The CRA maintains a system to identify tax returns and subsidy claims that are prime targets for audits.  This includes the number of errors on previous returns or indications that the business will not pay its tax obligations in a timely manner. 

 The CRA auditor has the right to examine all books, records, documents, and other pertinent information.  That will include ledgers, journals, payroll, invoices, bank statements, and contracts.  They are also allowed to look at the personal records of the owner(s) including mortgage, bank records, and credit cards.  If there are other individuals associated with the business like spouses or investors, the audit can also involve their personal records as well.

 Remember that the auditor can request information or documents in addition to that which was in the original request.  You can send them electronically.  The auditor may also make copies of your documentation if the audit is in person. Capex CPA has qualified and experienced tax consultants to help you with your CRA Audit. Contact us today click on this link —> https://capexcpa.com/contact

-The Capex CPA Team

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Can I Claim Work From Home Expenses?

If your workspace is now in your home, you are allowed to deduct certain expenses from your personal income tax return.  This will reduce the total tax liability.  If you have never claimed this expense before, be sure to review the choices on claim methods to find the option that suits your situation better.

The temporary flat method applies to those who worked from home for over 50% for at least four consecutive weeks from 2020 through 2022 due to Covid restrictions.  In this option, you claim $2 per day to a stated maximum.  You are not required to maintain documentation and your employer is not required to complete a T2200.

Keeping Records

The other option we advise our Mississauga clients, is the detailed method which covers eligible employees who work from home and those who were restricted to work from home due to Covid in 2020 through 2022.  For this you must keep records of all expenses and your employer must complete and sign a T2200 or T2200S.

Obviously, with the detailed method, there will be more records to have on file plus you will need to determine the amount of space you allocated to your home office.  Supplies and phone services are dealt with on T777S or T777. 

Renting

Before you begin, realize that if you rent a home or apartment, you can deduct a percentage of that rent payment based on the amount of space you use for the home office.  However, if you own you cannot deduct the percentage of the mortgage principal.

Calculating Space

To calculate the space, total the square footage (or meters) of the finished areas of the home (including halls, baths, and kitchen) and the size of the space you use for work and find the percentage that you allocate to your employment.  If you simply used a portion of the open space or common area, you need to calculate the percentage of that room.  If it is a common area or a room also used for other purposes you need to determine the number of hours daily and develop the percental of time you used the room for work. 

Similarly, you can claim a percentage of the utilities, internet access, rent, etc.  There are also exemptions like furniture, replacing windows or appliances, etc.  Also, not eligible are costs for electronics (laptops, speakers, phones) or accessories (mouse, headset, camera).

If you are trying to decide between the two methods, here is a brief example.  If you pay $2,000 per month in rent and use at least 10% of the overall space for your office, your expenses will be higher than the $500 flat fee deduction.  If you did not keep any of your utility statements, now is the time to see how much documentation you can compile.

This deduction can impact your tax burden if you are eligible.  For more information or help with this issue, contact a Capex CPA tax consultant.  We are a leading Real Estate Accounting firm and one of our Accounting professionals will be able to better advise you on the best alternative for your situation. To contact us today click on this link —> https://capexcpa.com/contact

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Carbon Tax Audits

What is Carbon Tax?

Emissions are directly impacted by carbon pricing. In general, this means that companies that manufacture or distribute carbon-based fuels must pay a set price for each tonne of carbon dioxide they release. When it comes to reducing carbon emissions, the price normally rises gradually over time, allowing consumers and businesses time to adjust to the new price.

Things you need to know about Carbon Tax

Each year, as temperatures fall, there is a commensurate increase in heating requirements, a surge in natural gas demand, and consequent increases in natural gas prices.

Reduce Greenhouse Gas Emissions In A Systematic Manner

The historic and revolutionary Paris climate agreement was signed by Canada in 2015, aiming to keep global temperatures from rising more than 2 degrees Celsius over preindustrial levels.

According to the established structure, if no provinces approved their carbon tax plans, the federal carbon tax would serve as a "backstop" policy.

Raise the Price of Natural Gas

Several unstated fees are included in the policy framework. The federal carbon price, which rises each April, is the most obvious levy. For example, the initial federal carbon fee rate for natural gas consumption is 3.91 cents per cubic meter (m3). Although the rate will rise to 5.87 cents next year and 9.79 cents by 2022, it will remain constant.

Customers' bills include a delivery or transportation price with a small but noticeable facility carbon fee. Depending on their business rate zone, businesses in Ontario are charged between 0.0036 and 0.0084 cents per cubic meter.

Some Institutions May Be Eligible For An Annual Tax Refund

Because of the carbon tax's considerable financial impact, the legislation mandates that 90% of carbon tax proceeds be returned to people and households. The Canadian federal government gives a "Climate Action Incentive" in the form of a rebate to qualifying taxpayers who claim the benefit on their income taxes to meet this requirement.

The refund payout varies by province, much as the actual carbon tax amount. A typical home in New Brunswick will receive a rebate of $248, while a comparable household in Saskatchewan will receive $598. By the end of June, the federal government had distributed approximately $2 billion in reimbursements to over eight million Canadian households.

Offset Cost Increase of Tax Carbon

Despite the carbon tax, customers can take several proactive initiatives to reduce energy expenses this winter and in the years to come. One way to do this is to improve the energy efficiency of your house or workplace. There are various practical ways to save energy for individuals and small businesses, ranging from doing an energy audit to thinking about purchasing an alternative fuel car, such as an electric vehicle.

Energy Cost Management

A proactive step beyond enhancing the efficiency of your house or company is to collaborate with a competitive retail provider that can assist you in taking advantage of favorable wholesale market pricing, which has been generally lower than default natural gas costs in certain regions.

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

- The Capex Team

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What To Consider When Employing International Freelancers

International business expansion typically entails recruiting personnel in foreign countries or assigning Canadian employees to work in countries other than Canada or the United States. This outsourcing practice can provide various issues for human resource departments, particularly when organizations are expanding globally for the first time.

One of the most significant practical issues is paying employees situated overseas while remaining compliant with tax and social security withholding.

Employing International Freelancers

Even the tiniest businesses have to deal with international partners for a wide range of transactions in this era of free trade and globalization, which may be incredibly frustrating. If you're a small business owner in Canada, you may be considering employing a foreign contractor to perform some of your company's services. As a result, you'll want to be aware of the various tax implications.

Service Rendering

Will the foreign contractor's services be performed in Canada or abroad? Even if the recipient of the services is a Canadian, a non-resident of Canada who delivers services outside of Canada generally incurs no tax liability.

Assume you hire a French lawyer to represent you in French courts in order to recover money from a buyer who refuses to pay you. Because the French lawyer is not a Canadian resident and the services are provided in France, you are not obligated to withhold money at the source.

Assume, however, that the same French lawyer flies to Canada and offers you services on Canadian soil, such as serving as an expert witness in a Canadian court case. The response may be different in that scenario, and you may be forced to withhold a portion of the money.

Withholding Taxes

Non-Canadian citizens pay a different rate of tax than Canadian citizens. Residents of Canada are required to file an annual income tax return. They declare all of their international income and calculate the tax they are responsible for paying. It is up to the Canadian taxpayer to pay or receive a refund depending on whether money was withheld at source, such as by an employer, and the difference is either paid or refunded.

Withholding by the Canadian payer represents the non-ultimate resident's tax, which may be offset by a foreign tax credit in the non-country resident's residence.

If a non-Canadian performs a service in Canada and receives payment from a Canadian, the payer must withhold and send 15 percent of the gross payment. You may be held accountable for the non-resident’s taxes if you fail to withhold the proper amount as a Canadian taxpayer.

Exemptions from the Treaty

There are numerous exceptions to the above norm in Canada's tax treaties. On the other hand, the exemptions are not granted automatically; you must make a formal request through the CRA. Foreign contractors who live in a nation with which Canada has a tax treaty and meet one of the following conditions can apply for a Section 105 waiver, the most commonly granted exemption to small businesses.

●      Those who make less than $5,000 in the current fiscal year are considered non-residents.

●      The non-resident worker is only in Canada for a total of fewer than 180 days as part of their present contract. Thus their stay is not ongoing.

●      Non-resident person's presence in Canada is recurrent, but their total time here is less than 240 days throughout a given period, and under the terms of this contract, they are here for fewer than 180 days in total.

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

- The Capex Team

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Managing Day-to-Day Business Financials

Maintaining a company's daily operations is critical to its long-term viability. Managing a small business is typically delegated to the director or coordinator. On the other hand, larger organizations and companies tend to allocate certain daily management responsibilities to employees or hired professionals like bookkeepers, accountantsnt.ai, and lawyers.

It may appear difficult to keep track of your company's finances when running a business. Because your business is unique, shouldn't your finances be? What are your plans if someone offers you basic advice on the subject? Some financial advice is so obvious that you'll be on your way to better money management in no time at all. No matter how big or small your company is or who your customers are, these basic suggestions are for you if you are a business owner.

Check Your Work and Logistics

Management on a day-to-day basis guarantees that the work is completed appropriately and on schedule. In the event of sickness, emergency, or other problem, measures must be put in place to replace the staff members who cannot perform their duties at the workplace. It's also important to ensure that all business records are kept accurate and up to date.

Check Your Costs

Financially speaking, the worst thing that you can do is ignore all of your outgoings and assume that you will never have to analyze them again. Keeping an eye out for better options as the industry changes and technology improves will help you avoid overspending on items that could be of greater quality. Even once a month will help you avoid overspending. Look into even little charges, even if they're insignificant. Whether you cut costs or receive the same outstanding items, it all adds up over a calendar year.

Manage Your Finances

Another everyday responsibility that should not be overlooked is financial management. Bookkeeping, bill-paying, and payroll management are all part of the job.

Companies must adhere to a strict billing and payment schedule to maintain a positive cash flow. Companies should consequently keep meticulous records of their expenditures, monitor grants and contracts, and provide specific instructions on acquiring supplies and equipment to keep up with demand. Determining who is accountable for specific financial duties like banking, money transfers, making checks, and so on is an important component of financial management.

Businesses are in danger if they don't have precise day-to-day finance, which prevents them from making accurate financial predictions and controlling costs.

Contact an Accountant

If the financial aspect of your business is giving you a hard time, speaking with an accountant may be a good idea. As a side benefit, effective account management will aid in the expansion of your company's revenue and keep your bottom line healthy. In addition, there is the bonus of not having to worry about any figures yourself, which might be beneficial if you prefer to focus on something more important. There are times when it is best to leave the work to the experts. Contact an accountant if you have the funds available.

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Business Succession: Planning for Family Business Succession

Working on a family business without a succession plan can cause confusion, conflict and jeopardize a company's ability to compete in the future. When a business is owned or managed by a family, the topic of succession raises a host of difficult and sensitive issues for everyone involved, including those who aren't employees. A series of papers have been published to address these challenges.

What to Consider When Planning for Business Succession?

Careful and thoughtful planning is essential for a successful business transition, and the goal of this brief document is to list a few of the most critical issues.

Build Company Familiarity

The most effective succession handoffs are frequently years in the making, providing the necessary time for staff to prepare for this move. Indeed, prior to hiring non-family staff, organizations should open discussion regarding the family's succession plans. According to research, job prospects have opposed working for family firms. By informing prospective employees about the company's aims and goals, you can avoid future dissatisfaction.

Current employees should also be introduced to possible successors early in the process. Familiarity fosters confidence and collaboration, as employees require time to adjust to a successor. Due to these contacts, the relationship capital between the successor and employees can play a critical role in establishing acceptance for family succession long before the handoff.

Set A Standard

Nonfamily employees frequently get the impression that family members are less accountable or responsible than they are. To mitigate the negative consequences of such perceptions, prospective successors should exhibit competence and serve as role models for accountability. Credentials such as schooling or outside experience might allay non-family employees that the successor is the product of nepotism.

Such demonstrations of leadership ability can help secure buy-in from worried nonfamily employees. Similarly, family businesses should demand a higher performance standard from prospective heirs. Increased hours and more difficult assignments throughout the transition can instill confidence in the successor's dedication among nonfamily personnel. This can assist in assuring staff that a family successor is the best candidate for the job.

Train Potential Successors

Many family businesses place the primary responsibility for training the next generation squarely on the shoulders of the family leader. This strategy overlooks a critical chance to garner buy-in from non-family employees. Experienced nonfamily personnel contributes significantly to the next generation's preparation, but incorporating nonfamily members in this process demonstrates that they are valued contributors to the firm's success. Such participatory cultures result in a more devoted and loyal staff.

Future successors who demonstrate humility and a desire to learn from more experienced personnel might strengthen nonfamily members' commitments by earning their confidence and respect.

Prepare Transition Plan

The most important thing above all is to prepare your transition plan. This transition plan will be your roadmap towards a successful business succession. It involves legal accounting and audit, assessing legal papers, setting of obligations, and signing contracts. Many family company executives strive to transmit the baton to the next generation successfully. Additionally, it might be a prudent commercial move if the proper processes are done. By conveying family succession goals, establishing strong relational relationships, and demonstrating the fitness of next-generation leaders, family businesses can gain buy-in from non-family staff.

Not only will this facilitate a smooth leadership transition, but it also has the potential to improve nonfamily identification with both the family and the business, resulting in a more productive and contented staff that will propel the business for years to come.

The time of transition can be difficult for many families, but it doesn't have to feel like a burden. Take advantage our services and book an in-depth consultation with one or more sessions that best suit your needs today! 

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Top 3 KPIs for Tracking Sales

In today's age, many businesses are not utilizing the knowledge their data provides in the way they could be.

With the ease of accessing digital analytics, there is always an opportunity being wasted. Knowing this now, you must be wondering how to access what you've been missing out on.

This article will learn the key features of five KPIs that are crucial to eCommerce and your business.

These KPIs are meant to produce actionable insight from your business's data to make way for impactful improvements to your company.

What Is A KPI?

A KPI, otherwise known as a key performance indicator- is a metric system that communicates how well a business or individual performs against its objective.

They are performance measurements that tell you where your business website might be and are meant to help identify any routes you must take to achieve your business goals.

Why Are Key Performance Indicators Important?

Without any KPIs, business owners are somewhat forced to resort to unfounded hypotheses, which can be detrimental to the overall success of their business. If something goes wrong, you won't know why or if it will happen again.

If you don't understand the outcomes of your business plan strategies, you cannot develop your company with efficiency.

This is where KPIs come in.

With them, you can achieve longer-term success with continuous action. The true power lies in the ability to interpret your data so that you can draw out any actionable insight.

How to Choose the Best eCommerce KPIs

There are many KPIs available for monitoring, but not all KPIs are beneficial for your type of business; hence when it comes to making a choice, you should focus on these factors:

Keeping it short:

Many agree that it's pointless to track tons of unnecessary KPIs that will be nothing but overwhelming to review. Choosing a smaller amount that provides actionable results for you and your team would be considered more beneficial in the long run.

Business Goals:

Choose your KPIs to impact your net income, as it will be supportive of your overall business strategy and annual performance.

KPIs That Reflect You:

KPIs defer in range, from eCommerce to business, so it's important to choose metrics that are most relevant to your business instead of what's trending in other companies.

Here is a few KPIs we recommend taking a moment to review so that you can see if they match what your business is looking for:

1. Conversion Rates

Conversion rates are the most crucial eCommerce KPI for a business owner. The conversion rate refers to the percent of how many visitors act on your company's website.

The good thing is, this action can be anything you want, such as signing up for your website's daily newsletter or when customers make a purchase. Overall, your conversion rate is meant to tell you how effective your created website is in encouraging past visitors to participate or take action.

2. Customer Retention Rate

The customer retention rate KPI is known for measuring the ability of your organization to retain long-term customers and generate any reoccurring revenue from pre-existing customers.

Research has shown this KPI can increase a modest 5% in customer retention, which overall can increase profits by 25%.

3. Net Profit

The net profit KPI is another useful KPI that is supposed to measure how effective the business is at generating profit for each dollar of income brought in. It is instrumental in making positive decisions.

KPIs can sometimes feel confusing, even overwhelming, and challenging to apply. This is why we have accountants readily available to help with all your business planning needs in one simple click, so book an appointment today, as any to all tracking will undoubtedly pay off in the end!

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The Benefits of Creating Wellness Breaks for Your Company

We all have benefited from our country's universal health care program. As it allowed for the needs of people to come first instead of economic gain, as we can somewhat see in other aspects of living.

Unfortunately, this program doesn't cover every medical service your employee needs to survive a health and stress-free career. The good part, though, about rising businesses is, as an employer, you have the ability to improve retention rates by adding costless wellness programs that are geared towards helping those who work for you to live a more engaging and fulfilling lifestyle.

With a customizable program at your fingertips, you can be the one to push towards healthier behaviors in your staff members, allowing for a more comfortable work environment as a whole.

You may also strengthen this new wellness plan with health insurance products to ensure each team member is taken care of in the longer term. Because there is so much to think about, let's go over why having a wellness program might be the right decision for your company, along with some ideas on how to begin the process of creating your own program.

The Importance of Taking A Break

It has been scientifically studied that taking a moment to relax or partaking in social breaks has been particularly beneficial to an individual's overall wellbeing in both a mental and physical sense.

Returning your functioning systems into a state of ease facilitates quick recovery. This just means, when you decide to take a break from your work, your body's energy levels are given a moment to recharge. Which said energy could then be used towards something more critical such as allowing you to participate in physical activities, work at your total capacity and allow for you to problem-solving with ease.

If you don't allow your brain or body the chance to rest, it can be detrimental to your overall health.

Decreasing your lack of focus, causing you to become physically ill and lessening your quality of life overall.

Having a wellness plan provides these benefits:

- Increase in overall employee morale

- Lower costs in health-related instances

- Improved productivity of your employees

- Reduced costs in disability and workers' compensation vectors

- Fewer on-the-job incident reports for employees

Now that we understand the benefit of producing a wellness program for your workforce, here are a few tips to help guide you towards implementing a solid health and wellness program for your employees.

1. Assess the needs of your workforce:

Take a moment to evaluate the environment of your business and the culture it creates; certain variables such as social networking and available support systems can make all the difference with the attitude of your staff and their overall wellbeing.

2. Establish how much you are willing to put into making this program a success:

Every dollar counts when you work in business, which is a very true statement. But if you are unwilling to put time or effort into creating a well-supported wellness plan, then success is futile, and all resources will have gone to waste.

3. Once running, evaluate the success of the program with your given staff:

Establishing a metric system to aid with determining the overall success of your wellness program is extremely important. Tracking employee participation rates and aligning with companies' goals is a great way to figure out what your staff needs so that employee morale stays up.

Still unsure how you'd like to proceed with creating your wellness plan? Talk with one of our accounting advisors today to see just how far you can go to make your work environment the best it can be.

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Fundraising for Startup’s in Canada

Ask yourself how much funding your business needs in order does to succeed. This is because a lack of funding can be the difference between making it past the development stage or scrapping your future company plans.

No matter the quantity, any idea doesn't stand a chance in the real world without the proper funding that would allow it to take off.

Never put your dreams of becoming an entrepreneur aside because you feel as though you lack the funds. In Canada, there are funds available just around the corner for small businesses like yours; all you need to do is ask the right people to get pointed in the direction you would like to take your ideas.

Can Fundraising Help?

Many expenses will arise for potential small business owners' way before seeing that first dollar of profit when first starting out.

This is why funding is an essential aspect of the department stage, especially when it comes time to purchase any much-needed equipment to renovate your area or even when you are ready to advertise your brand.

Regardless of where you receive it, obtaining the right amount of funding will determine your small business's success or overall failure. This is why we suggested finding funding at the beginning of your stages to allow doors to be open for many more opportunities.

To help get you started, we've come up with four main points to remember to cover to ensure success when applying for financial aid for your small business:

Learn: Learn about the types of funding available for you. Each type of fund has its qualifications to access it, from guaranteed loans to renewable grants.

This is why you should familiarize yourself with the various programs and private investment agencies available to increase your chance of being fully funded hopefully.

Assess: Before you do anything else, access your funding needs. Funding professionals and investors will want to know that the money they give you gets put to good use; this is why they categorize the funds by most purposeful.

Browse: Browse all your funding sources beforehand. Funding is allocated to small businesses through thousands of government officiated agencies, making it tricky for entrepreneurs to locate the programs they qualify for.

Apply: Once all those above are organized, you can apply for funding. Having access to 1000+ sources, you can start your funding journey today.

Finding financing for your start-up can prove to be a giant headache if you don't know where to start looking. This is why we've created this guide to be used as a starting point for your small business journey.

Family & Friends

Outside of the standard financing lines, this funding results from your closest family. This will most likely be one of your easiest-to-access forms of financial funding as your "investors" will have little to no due diligence, other than a few expectations, making the transaction a simple one.

Despite this, there is a reason many believe mixing pleasure with business is a bad idea, so before making a life-changing decision such as loaning money from family or friends, take a moment to weigh the pros and cons of this type of exchange.

Angels

Angel investors are known as wealthy individuals who choose to invest in start-ups to exchange convertible debt or equality.

An angel can be from any background, but they are usually either retired professionals or former entrepreneurs interested in taking part in the world of start-up companies.

Bank Loans

Most banks like to see their money coming back to them, so if you are someone who qualifies for a loan, they will offer a minor overdraft based on your credit score,

This is why some default to using their cards to finance their business in the beginning stages.

Find out the exact amount of money is available in your area by taking advantage of our on-call accounting services at CapexCPA.

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Cash Flow Forecasting- What Is It?

Forecasting how much cash flow comes in and out of business is typically the responsibility of said business's financial team. But what if you are a freelancer or someone who wishes to learn the trick of the trade?

Assembling a forecast requires continuous input from many stakeholders and data sources, especially in larger companies that take many hours to organize.

That is why we've compiled this article on building a cash flow forecast the proper way for those willing to learn what it takes to visualize how to utilize their cash effectively.

What Is Cash Flow?

Cash flow forecasting is the process of trying to obtain an estimate, the forecast, of a company's financial position across all business areas. The cash flow forecast shows projected cash based on the expenses and yearly income flowing in and out of the company.

It is an essential tool to help make decisions regarding funding, investments, and even capital expenditure.

This process can be carried out for a range of timelines, with a short-term forecast predicting around 30 days, used to identify needs or excess money in the intermediate-term. In comparison, longer-term forecasting lasts about three years ahead or longer, if required. The only thing with a long time is the less accurate the calculation.

The Purpose of Forecasting

Predicting the position of your cash should be the top priority of many, if not all, companies, as it helps business owners stay on top of their expenses, prepare for the future, and helps to make better, more informed decisions.

At the most beginner level, a forecast can tell if your company will have a positive cash flow (more money coming in than it's filtering out) or a negative flow (more cash going out than coming in) at any given point in time.

Armed with an accurate prediction, you can minimize the buffer size needed for unforeseen expenses, allowing the company to use its excess cash better.

How To Forecast Your Cash Flow

The best way to forecast the cash flow of your business will always depend on a few given factors: your business’s objective, the investor’s requirements and how accessible the information within your organization is.

Here are a few steps to review when deciding to forecast your cash flow:

1. Determine Your Objective

To ensure that you see actionable insight from your cash flow forecast, you must first decide the business's objective that the estimates should be focusing on calibrating.

It is found that more commonly, organizations use their forecasts for one of the following reasons:

Interest reduction: Ensures the business has enough money in their pocket to make payments on any loans or debt the company has taken on.

Planning For Growth: This allows the business to see if they have enough working capital available to fund activities that will help with the growth rates of revenues in the future.

Risk Management: Creates a range of vision into potential liquidity that could arise in the future so that there is more time to address any that occur.

2. Choose A Method

There are about two primary types of forecasting methods: direct and indirect. The main difference is that forecasting directly uses flow data, whereas indirect forecasting tends to use projected balance sheets or income statements.

Choosing a method that works for you will depend on the objective you've selected, as well as any kind of data you might have in hand to build your forecasting model.

3. Choosing a Timeline

Once the business objective and method of forecasting are determined, the next big thing to consider is how far in the future you would like your forecast to look into.

Here are a few forecasting periods that many recommend businesses to follow:

Short Period: short term forecasts are typically four to five weeks in length and contain a daily breakdown of receipts and cash payments.

Medium Period: Medium terms typically look around three to six months in the future and are extremely useful for looking at the interest and debt reduction.

Long Period: These periods last around six to twelve months in the future and are generally used as a starting point for budgeting processes annually.

Forecasting Your Solutions

Cash flow software can help companies forecast their future flow with greater accuracy and less time commitment.

Interested in forecasting but not sure if you are confident enough to do it on your own just yet? Book an appointment with one of our accountant specialists to start your forecasting solutions today.

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Year-End Tax Tips Everyone Should Know

Tax planning should be seen as an annual affair. But, as the year's end approaches, that's when many accountants believe it is a perfect time to sit down and review any, if not all, personal finances you have.

It's always best to take advantage of any planning opportunities available to you before the deadline. Unsure of where to begin? Here are a few year-end tax tips you might wish to consider:

1. Take Advantage of Loss

Suppose you are someone who has capital gains this year, otherwise known as you sold an investment that cost more than you paid while still holding the securities with capital losses. In that case, you should consider selling the securities to offset the capital gains.

By doing this, you are replacing your sold investment with low value and replacing it with a similar investment to offset the capital gains tax liability. You should also consider deferring your investment sales to next year if you believe your tax rate will be lower than the previous year.

To do this, it's always best to talk to your financial planner or bank to see if these strategies are the right step for you to save some money.

2. Maximize TFSA Contributions

While this year's Tax-Free Savings account, otherwise known as TFSA contribution limit, is around $6000, you possibly could have some leeway if you had yet to maximize your contribution amount in earlier years.

If this is your first contribution, it's possible to contribute over $70,000, that's if you're over the legal age of 18 and have been a Canadian resident since 2009, when TFSA was founded.

It's also good to mention that withdrawing any money from your TFSA account is tax-free.

3. Paying Tax-Deductibles

This means to pay off all investment management fees you may have, such as childcare expenses, medical bills, accounting fees, and alimony.

By paying your tax-deductible, otherwise known as an expense that individuals or businesses can subtract from their gross earnings when completing tax forms so that the cost of the deduction reduces the reported income, many can reduce the amount owed at the end of the year.

4. Make A Charitable Donation

If you contributed to a charity by the end of December, you might then receive what's called a donation credit for your tax year. With this, it's possible to claim the total amount of the donation on your tax return.

You need to find a preferred charity and make the payment to the deductible gift recipient.

5. Contribute to Maximum Retirement

There is no better investment than placing money in your tax-deferred retirement savings accounts. This is because they can grow to a substantial amount all due to their ability to

the compound over time with the benefit of being free of taxes.

In many cases, company-sponsored plans (401) plans are the best deal to make because many employers often match many contributions.

With CapexCPA, we'll ask you all the simple questions about your finances to help you fill out the most suitable tax forms to have you ready to go for tax season and any other accounting needs.

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Taxes You Shouldn’t Forget to Write Off: Working from Home Edition

Legislators have written many lines in the tax code throughout the years to soften the hit of the extra costs taxpayers and the self-employed must shoulder as they continue to run their businesses. Yet despite this, many new self-employed workers don’t use these loopholes because they don’t know about them.

This is why It’s best to do your research starting as a remote worker so that you can take advantage of the assistance available to help lower your tax bill at the end of the year.

If you happen to be someone who recently went into a self-employed career, check out these few taxes write-off tricks.

Who Qualifies?

Even if you only go to the workplace occasionally, you might be able to claim freelancer expenses. To be eligible, the CRA has said that you must have spent a minimum of 50% of your working hours remotely in four consecutive weeks.

These qualifications include both full-time and part-time hours.

Those who do make the cut can deduct a flat rate, or even possibly part of their workspace costs, such as rent, heating, electricity, and in some cases, maintenance.

How Much Can I Deduct?

Generally, depending on the square footage of your workspace, eligible self-employed workers can deduct up to 20% from their business space.

Home Office Deductions

Self-employed workers can deduct their office expenses from their business income if applicable. This includes both individuals who work from home full-time as well as those who do freelancing as a side hustle.

For an insight of all the areas you might be able to deduct as a freelancer, it has been said you can claim the following:

. Heating

. Rent

. Minor repairs

. Mortgage interest

. Cleaning and maintenance

. Electricity

. Home Insurance (only applicable to those who are self-employed, or an employee and work based on commissions)

The CRA recognizes those listed above as legitimate expenses related to either running an at-home business or working out of a home office. A portion of each could be deducted at the end of the year during tax season.

Automobile Expenses

Many don’t realize it, but at-home workers have the opportunity to write off automobile-related expenses.

If applicable, numerous workers can deduct the total time their vehicle was used for business purposes. So, for example, if you had $7000 in total expenses (insurance, maintenance, licensing fees, etc.), you might be able to deduct up to $4000 during tax season.

Don’t Waste Your Savings

Once your taxes are filed for the year and you collect your refunded money, it’s best to be mindful of what you do with those extra savings. As we have learned in the past few years (with pandemics and lockdowns), unpredictability can strain your finances.

If you do happen to receive some money back, you should also consider using those refunds and placing them in a high-interest savings account. It’s a great way to have backup money in the case of emergencies but also has the opportunity to double your money faster than it would in a traditional bank account.

Those looking to start taking control of their investments should explore CapexCPA. This online accounting firm offers some of the best resources and tools to help taxpayers make informed decisions when dealing with their financial needs.

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Should I Do My Own Taxes or Hire a Professional?

Money is a big part of our lives. Without the economy, there is no working structure that we know how to follow to balance how we live.

Being dependent on such a viable resource requires organization and tracking so that the money circulating the world can be re-used to generate more business, creating more money.

This is where personal income taxes come into play.

Thankfully you don't need a background in accounting or be good with numbers to complete your taxes. Yet, many can find it tiring after a while, as collecting all your paystubs and purchases can take time and effort.

Time in which many might not have, which is why it's lucky to say that individuals are not required to keep financial records by law, meaning that hiring someone is a possibility.

Which brings us to the question should I do my taxes or hire an accountant?

Some things to think about

●      Doing your own taxes will take time and patience.

●      If you seem to have no time on your hands, hiring a tax professional might be the best option.

●      A certified accountant is more expensive than hiring that of a non-certified accountant.

●      Accountants and certain bookkeepers can help with tracking personal finances, including your taxes.

●      Doing your taxes allows for financial insight while being a money saver compared to hiring someone else.

Doing Your Own Taxes

Many people enjoy doing their tax returns. It can be easier for those living quite simple lives, and some enjoy the math and being organized when it comes to their expenses.

Some are even very interested in the tax system and its changes, preferring to be up to date and financially aware.

If any of these is the case for you, outsourcing the task to another individual is probably an unnecessary step.

Hiring A Tax Expert

Using a professional accountant often means that those taxpayers can take full advantage of all entitlements and deductions to which they are entitled without missing any opportunities.

Besides just completing tax returns, an accounting might also offer other forms of financial assistance and planning.

When Should You Hire an Expert?

If you feel as though you don't have the time or patience to record your income and expenses every year, you can always engage in professional help. Anyone can hire a qualified professional, especially those who believe their time is worth more than they'd pay for an accounting service.

But who does this type of work exactly? When many talk about hiring a professional, they often use the term accountant loosely to refer to workers who revolve in mathematics and statistics, such as bookkeepers and tax preparers; even in some cases, a tax advisor can get the job done.

It's always best to review as many opportunities as you can when hiring someone to take over your taxes, as each firm has its own set of services that are more than likely different from any other company.

This means it's best to review so that you end up with a company that works best with your needs.

Lost on where to begin? Don't hesitate to look at CapexCPA, an online accounting platform that uses some of the best cloud technology to this date to help you figure out all your accounting needs and wants.

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Are You a Freelancer? Check Out These Tax Tips

With job losses happening worldwide and unemployment numbers going down in the past few years, freelance work has spiked and turned into something that can replace full-time staff positions for many individuals.

Because it's such an exciting opportunity that many approve of and wish to partake in, we can only expect to see the market of freelancing skyrocket past any expectations in terms of economic stability.

But since this is new territory for the marketing world, there are some things regarding tax that many should learn to understand as it's forever changing in this stage of universal development.

If you are new to freelancing, doing your taxes will not look the same as it once did in previous years. So here are a few tax tips for freelancers to stay on top of the tax game:

Baby Steps

When you're new to this form of tax return, it's best to gather all your sources of income. As a freelancer, you need to be extremely organized in keeping track of all your 1099 forms, receipts, expenses, and client lists.

It's best to start out hoarding any information you can as you begin this journey and remember that freelancing isn't a hobby- it's you owning a business. Approach your accounting or bookkeeping work as you would at any other company you've worked for before.

If you feel you can't keep track and have a little extra cash to spend, hiring a third party might be a good option for keeping your taxes in line.

Keeping Track

The great news about being a freelancer is that you can still write off certain expenses.

This means you are able to expense business trips, vehicles, and any materials you may need to do your work. This is an important piece when filing your taxes, especially because many freelancers don't use it to their advantage. Other areas you might be able to deduct are marketing, health insurance, and contract work.

This is why organized is essential for all your files and receipts, as keeping track of your expenses and not overlooking viable ways to earn back money will make your freelancing career worth the extra work, especially when that check comes in the mail.

Putting Money Away

Many freelances believe the best thing to do when preparing for tax season is to put aside at least 25% of what you make to ensure you aren't strapped for money come the time to pay your taxes.

With this approach, self-employment taxes should be fully covered, preventing a large number of expenses from appearing at the end of the year.

Opening a separate savings account where it can be set up for direct and automated deposits from your main checking account is a good idea to think about as it will help to keep your tax savings on track.

Home Deductions

Since so many freelancers work from home, the home office deduction tax can be applied. The CRA allows freelancers to write off everything from utilities to rent for the portion of your home that you choose to use as your office space.

The only catch is that office space must be exclusively used for your self-employment work and nothing else.

After reading all these great tips, are you feeling like you want to be more organized this tax season? If so, then don't hesitate to take a look at CapexCPA, a digital accounting firm that is there to help with all your financial needs. Making tax season a stress-free experience for years to come.

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How To Write Off Personal Vehicle Expenses

When it comes to Canadian taxes, there are numerous expenses people can write off. Still, few people know; there are several car-related costs an individual can obtain that could help earn a bit of income at the end of tax season.

So, the real question you should be asking yourself is: have you used a work vehicle or any transportation device for business purposes during this year’s tax season?

If the answer to this question is yes, this article will be a great guide to help explain which vehicle expense claims you could be making on income tax within Canada and how the process works.

The two types of claims for motorized vehicle expenses

Currently, there are about two different claiming styles an individual can use, broadly speaking, when looking to reclaim tax reduction money.

1. Those related to the usage of a vehicle (this claim can be found online 9281 – Motorized vehicle expenses).

2. The taxes related to purchasing a motorized vehicle (This can be claimed as Capital Cost Allowance).

What types of vehicle expenses can be written off?

Luckily for business owners, there are quite a few vehicle expenses that can be claimed regarding anything remotely connected to the use of a work vehicle; some of these expenses include:

. Fuel and cost of oil

. Leasing costs

. License and registration fees

. Insurance

. Any maintenance and repairs

Owning vs. leasing your vehicle

There can be a difference between driving a passenger vehicle that is your own or one that is leased. For each, you may have specific limits on the number of deductions that can be taken for interest.

If someone else is sharing the ownership or loan with you, the limits still apply, but the total sum you and your joint partner can’t exceed the amount one owner is entitled to. Whether you decide to lease or buy a vehicle, the CRA allows the same number of deductions for the expenses such as gas, oil changes, insurance, etc.

The best decision to make when discussing these two options is to seek out self-employment experts for advice to better understand which choice suits what you are looking for.

Final words

The best advice anyone could give to you regarding taxes is to keep all your receipts!

If you decide you want to cash in this tax season to try to make some money back, when it comes to your mode of transportation, it is best always to hold every receipt or piece of document you can to claim business expenses the right way.

Though many of these rules and guides may seem tedious and easy to forget, make sure you are taking a few minutes every day to tuck away any receipts in your console or documents folder. Which depict most vehicle expenses, will give you the best chance at feeling like a winner during tax season.

Connect with an accountant today!  Click on this link —> https://capexcpa.com/contact

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When To Register for GST/HST

If you are in the midst of starting up a small business, it might be the right time to think about when the best time is to register for GST.

GST is something that any profitable business has to sign up for at some point. Whether you are a contractor, consultant, sole proprietor, or entrepreneur, when you hit a fluctuation in your revenue that exceeds $30,000 in over four quarters, you then must have to register for your first ever GST/HST number.

It is good to note that there are different registration requirements when filing for GST/HST.

Suppose your company is a non-profit, public service body, or taxi/ride-sharing operation. In that case, you must review the CRA website to see what category your company falls in, or you may prefer to speak with your accounting professional to decipher what next steps you'll need to take.

What Is GST/HST?

A GST/HST is a goods and service tax that business owners or service providers must charge for any item or service they sell or provide to customers while being within Canada.

You will notice this tax is included in the final prices of commodities and is always paid by the customer, never the business owner. Instead, your job as the owner is to then pass it on to the government.

After you register your company, your GST/HST number will be part of your 'business number,' which the Canada Revenue Agency holds. You can easily register for that number online at Canada.ca by either fax, mail, or telephone at 1-800-567-4692.

What do You need for Registration?

There are four things you need on hand when registering for GST/HST These things include:

1. Effective Date of Registration – The effective date can usually be the day you've stopped being considered a small supplier.

2. Fiscal Year for GST/HST purposes – Usually, the fiscal year for GST purposes is generally the same as your income tax year.

3. Total Annual Revenue – This is a complete sum of the revenue you have made in a year; if you are a newer business, it's possible to give CRA a reasonable estimate.

4. Basic information – This means your general personal information.

Once you have all four of these, registering can be done much more efficiently and will take up less time.

Are There Any Benefits to Registering?

In the end, you have no real choice in whether or not you want to register. However, to counterbalance the money you've lost in paying the government taxes, you as the business owner can claim sales tax that is chosen from a wide variety of expenses that relate to your business.

This is a pretty cool aspect that should be thought about because by submitting these sales tax you are essentially reducing the amount of GST/HST you must give to the CRA.

At Capex, we work to help clients get ahead financially by using modern cloud technology designed to streamline their accounting. Together, we can track all your business expenses, putting you on the right track towards fulfilling your government tax filing obligations.

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8 Tax Tips for Older Adults

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Paying taxes can feel daunting, even if you're an older adult who's been doing it for years. However, it's an inevitable fact of life - a task everyone has to perform. Canadian laws around taxes can get complicated, and unless you're an accountant, you might struggle to keep up. Fortunately, there are ways you can make paying taxes less burdensome and more fruitful. 

As an older adult, you can ask your adult children for assistance as they are likely to be more updated with the latest tax changes. If that's not an option, or if you still would like to learn by yourself, there are useful tips you can follow.

Register for direct deposit and file online

You can get refunds faster and reduce delays if you file your income tax and benefit return online, register for direct deposit, and update your address and personal information. If you want to easily view and manage your tax and benefit information, it's strongly advised that you sign up for My Account, which trivializes this. For more information on online filing, deadlines, and other guidelines, you should visit Canada Revenue Agency's (CRA) Get Ready page.

Sign up for email notifications

The last thing you want is to fall prey to fraud, scams, and identity theft. To prevent being a victim, sign up for email notifications from the CRA, so you can be notified when you have new mail in your My Account or when critical personal information is changed on CRA records.

The CRA also has a page dedicated to providing information to help Canadians avoid scams and fraud.

Reach out to a professional

Free assistance from your relatives or volunteers is good, but nothing beats the work of a professional. If you've got a complicated tax situation on your hands, your best bet is to work with a financial professional. Unlike an accountant, financial advisors can see more of your finances and help you not only with taxes but also with investments and retirement funding. A financial advisor can help you navigate your way through financial decisions that have tax implications.

Use a tax return software

For those with a simple tax situation, hiring a financial advisor may not be worth it. Fortunately, you can learn to use tax return software. Tax return software can simplify the filing of taxes with a significantly smaller price tag compared to a financial professional. Learning to use one will allow you to save a lot of money in the long run. There are different tax return software out there, each offering a free and paid version. When deciding which to use, keep an eye out for features such as ease of use, OS compatibility, and languages supported. You also want software that offers a generous suite of features for its free version. Most of all, the software should be NETFILE approved. 

File your taxes on time

This one sounds like a no-brainer, but a lot of people keep making this mistake. Yes, filing taxes can be stressful, but pushing it aside and filing it late can result in more problems and more stress. Interest is charged on the penalties you accrue, and it can quickly pile up, surprising you in the worst time possible. Not only will it cost you more, but it will also require you to do more work. 

As in everything, the best practice is to avoid procrastination. If you're scared of dealing with taxes thinking you can't afford to pay them, know that you can set up a payment plan on taxes you owe, but you can't do this if you haven't filed up to date. Also, remember that it's not a crime to owe taxes, but it's a crime not to file them as they're akin to tax evasion. 

Managing your taxes is one thing; getting the most out of them is another. Aside from contributing to your country's funds, there are other benefits you can get out of your taxes, and below are some practices you can apply. 

Report tips and gratuities 

If you receive direct tips or gratuities in your line of work, you can report them to reap financial benefits. It can boost your total income, which can help you immensely down the road. With a higher total income, you can qualify for larger amounts of loans or mortgages. The contribution limit for your registered retirement savings plan will be higher. Lastly, if you decide to pay Canada Pension Plan or Quebec Pension Plan on tips and gratuities, you can raise the pension amount you can collect upon retirement.

Claim eligible medical expenses

Getting older is often tied to more health problems, hence more medical expenses. Given that specific criteria are fulfilled, you can get non-refundable tax credits for eligible medical expenses made throughout the year. Keep in mind that the expenses must be eligible in accordance with guidelines. The expenses need to have been made during the tax year and haven't been reimbursed previously. The amount should either be equal to three percent or more of your income or be larger than $2,397.

Split your pension income

If you make significantly more than your spouse, or vice-versa, pension income splitting can give you an advantage tax-wise. Those who are eligible can split up to 50 percent of their pension income with their spouse. Another advantageous situation is when one is working while the other is retired. While this practice can reap benefits, it can make paying taxes in retirement difficult to manage, so working with a financial advisor is recommended.

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