Tax Tips for 2021 Filings

For Canadians preparing last year's taxes will be a bit different.  Many businesses closed, emergency benefits were released, workers moved into home offices, and much more.  Here is some information that may help.

Emergency Benefits

The Canadian Emergency Response Benefit (CERB) and the Canada Emergency Student Benefit (CESB) were each released without taxes being withheld.  Look for a T4A tax reporting slip to include with your 2020 return.  The amount of the tax will vary depending on your total income, including the benefit. 

The second round of benefits released in September, Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), and Canada Recovery Caregiving Benefit (CRCB) all withheld 10% for taxes.  Depending on your overall income, this may or may not be sufficient to cover your taxes due.  With CRB you are also subject to a clawback rate of $0.50 for each CRB dollar paid over your 2020 income that exceeds $38,000.

If you received benefits to which you were not entitled and didn't repay them in 2020, those amounts will appear on your T4A.

Home Office

In order to claim home-office expenses, you will need to review all your receipts or ask for the appropriate forms from your employer.  If you have worked from home more than half (50%) of the time for at least four consecutive weeks due to COVID-19, you can claim $2 a day to a maximum of $400, a temporary flat-rate home office deduction.  There is also a detailed method for a home-office tax break.  You should use an online calculator to see which will benefit you better.

Ottawa provided a one-time, non-taxable $600 payment for disabled persons to help with the extra expenses with COVID.

Charitable Donations

Recognizing the impact of the virus through joblessness, increased domestic violence, and the struggle for many to simply survive with lower or no income, the federal and provincial governments offer tax credits for charitable donations.  Federally, there is a 15% credit on the first $200 and then 29% on anything over and above that initial $200.

As you can tell, completing your 2020 tax return may not be as cut and dried as it has been in the past.  It will be a good idea to get as much of a jump on your return as possible.  If you have not already done it, gather all your receipts and documentation into a single folder.  Catch up on all the latest releases.  There are online calculation forms that can be helpful.  Of course, there are programs for sale that will talk you through the entire return and ask appropriate questions.  If you are still confused, you may want to consult an accountant or tax preparation service.  April 30 is just around the corner and it may take you longer to navigate the forms and calculations.

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

- The Capex Team

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What to Know About Starting a Small Business

Where does a small business enterprise begin?  With an exceptional idea.  Find similar concepts and make improvements.  Differentiate yourself from others in your field or related endeavors.  Complete all testing.  Make it fail so that you can fix the problems.  Choose a name.  Be sure it does not fall into any restrictions or is being used by someone else, or even similar.  If you decided on a hybrid name, check foreign languages, just to be sure.  The name should reflect what the business will do and be memorable at the same time.  Register the name with the government.

Decide on what form of business you want like a sole proprietorship, partnership, or corporation.  That will mean looking at the different tax liabilities with each, as well as the legal implications.

When everything seems solid, start working on your business plan.  This serves two purposes.  It will show you if your idea will work as well as give you a basis to present to financiers.  This may also include making applications for grants.  Understand everything you can.  You probably won't get financing with a winning smile and pleasant personality; this isn't the movies.  You will need to understand all the financials, marketing plans including the target audience, and much more.  Investors come in many varieties and each will generally have a niche that they want to explore.  First and foremost they will want to know that you plan to be fiscally responsible and that means understanding all the reports and projections.

Once you have the money, you will need to set up a business.  That means getting a license through your local municipality.  You may also need other permits or licenses.  Check out BizPaL to see the laundry list of business documents.  You will also need a bank account, possibly a line of credit,

You will need to set up accounting and bookkeeping procedures and processes.  After all, you will need some way to account for the money that people will be paying you.  Early on, think about employees.  You will need to be sure you are legally covered to hire employees in Canada.  This will also mean payroll deductions, insurance, personnel records, policies, and procedures.

Then you can finally start marketing and selling your product or idea.  That includes a marketing strategy and plan.

All of this may sound overwhelming and it can be without support.  Start with a professional accounting firm.  They are experienced in setting up accounting, securing business and other licenses, and knowing investors.  They can also help with technology like cloud accounting that will help you stay efficient and maintain easy access to the documents you may need quickly. 

Interview various persons and firms to find the best fit for your new small business.  They need to be knowledgeable as well as a good fit personality-wise.  You need to be comfortable with them as well as confident in their abilities to help you when needed.  Most will also have relationships with other professionals like attorneys, that can help you further.

If you are in a quandary, don’t hesitate to contact us at Capex. We have Professional CPA’s in Mississauga who are happy to sit down and consult with you so that you make the best decisions possible for your business.

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

 - The Capex Team

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When Does It Make Sense For Business Owners To Hire A Tax Accountant

Timing is everything.  But sometimes it is difficult to know what is the right time to make certain investments or changes in your business practice.  For example, when is the best time to hire an accountant?

Before Opening a Business

Even in the planning stages, an accountant is a valuable asset.  They can help you create a solid business plan and show you where others have failed.  Knowing the complexities of your undertaking is the first step to success.

Accountants work with lots of different types of businesses and they understand the costs involved with each one.  Being able to estimate and project the expenses will show banks and other lenders that you are serious about how you want to run your business and allow you to accurately determine the amount of cash you will need to initiate your company.

You will need to decide what kind of structure for your company.  Everything from a sole proprietorship to incorporation.  Each has benefits and drawbacks both personally and especially for taxes.  The accountant can give you insight into each and help you choose the best option.

There will also be numerous registrations like GST/HST, Payroll, etc.  Navigating these forms will be easier with advice.

During Operation

If you have already set up your company, not worry.  An accountant can still be beneficial to your ongoing concern.

It is probably safe to say that keeping books is one of the owner's least favorite tasks.  Actually, it can become rather complicated if you are not on top of things.  While not all accountants offer bookkeeping services, many can facilitate the work by recommending computer programs and cloud-based systems to make things easier.

Reaping the benefits of your hard work is what you are after.  However, paying yourself often slips to the bottom of the list.  Depending on the business structure, an accountant can tell you if it is better to draw a salary or to take dividends.  They can also figure out how much you can afford to pay yourself.

As your enterprise grows, an accountant can be invaluable.  There are many governmental reports you will probably need to file.  In addition to taxes, there will be government safety programs to report to as well as regular reports to any investors. 

Buying and Selling your Business

For some, it is more advantageous to simply buy an existing business and turn it into your own.  That also goes for purchasing a franchise.  Your accountant can perform the tasks necessary for due diligence so that you are sure the company is in good financial shape before you take the plunge. 

If you would like to move onto some other project or retire, accountants can produce the financials that will show a prospective buyer the value of your company.  They can also work with the accounts for the buyer to answer any questions and help the process move smoothly.

On a personal basis, they can help structure the sale using lifetime capital gains exemption to help with your own income taxes.

They can also recommend attorneys who are skilled in sales and mergers to assure that everything is in good order and appropriate.

If you are in a trouble, don’t shy to contact us at Capex. We have Professional CPA’s in Mississauga who are happy to sit down and consult with you so that you make the best decisions possible for your business.

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

- The Capex Team

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3 Tips for Running Your Business More Efficiently

At the start of new years, fiscal or calendar, it is often the practice to try and find new and better ways to operate your small or medium sized business.   

Fixes

Before jumping into upgrades and improvements, start by assessing what is broken.  That is where the first changes need.  Find what is the most inefficient process or operation and start by brainstorming.  Start with what you want to achieve.  Make it as specific as possible.  Not just “increase sales” but “increase sales by 10%”.   

Inefficiencies crop up everywhere from redundancies to outdated procedures.  Pick the worst culprit and fix that.  Don't try to implement too many changes or systems because everyone will just get confused.   

Listen to your employees.  After they identify the problem, see if any of them can come up with a solution.  Listen to all the ideas, even if they are cockamamie. 

Look at how other businesses run, even if they are not in your line of business.  Can you make things go faster by putting out an app for customers' phones? 

Look at Digital Solutions

From automated answering and VoIP, there is are often many efficiencies to be found in the digital advancements.  Automating time consuming tasks will free employees to handle more complex issues.  Just be careful to fully explain that this does not mean a loss of jobs but opportunities to increase skill levels.

Community Interaction

Just as families come in all different sizes and types, the community in which you operate can be the block where your store is located or the entire world.  If you use social media effectively, you can devise a way to find out what your customer base would like improved.  They may even have suggestions about how to go about it.  This could be a treasure trove or a Pandora's box.   

Opportunities

Keep vigilant about opportunities you may not have recognized before.  This can be re-purposing the product or service you offer to a different market segment or tweaking your offerings so that it will appeal to a broader audience.  It may mean moving out of your comfort zone or taking a risk.  Weigh the options and make your best decision.  Sometimes you can explore an opportunity in a limited segment or for a shorter period of time to see if it really works. 

Don't discount the professionals you use in your overall operation.  Your investors may have seen a similar change do wonders for another of their businesses.  Attorneys work with a variety of companies and see successes and failures.  Your accountant is one of the best resources to advise about economies of scale or investing in new technology. 

Whatever you do make sure that the change is positive, not just change because you want to shake things up.  Focus on the solution or end result.  Use collaboration whenever possible.  Trust your gut.  Look for openings and needs to fill. Think and explore.

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

- The Capex Team

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Top Apps for Small Business Expenses

If you run a small business or are thinking about starting one, you will need to choose the best financial and accounting programs to suit your business model.

Record Keeping:

QuickBooks – This is one of the most advertised software systems.  It tracks sales and expenses and will produce key financial reports.  It can also work with PayPal and track open invoices.  It can be accessed remotely with iPads, phones and tablets.

Wagepoint – This is designed to improve the efficiency of payroll, tax and benefits calculations.  It will automate payroll deductions for benefits.  It is also good for processing new employee information.  A bonus is that it is completely cloud based and sends the CRA your remittances for payroll source deductions.

FreshBooks – A nice feature is that this app will let you customize your invoices to dovetail with your business.  It can automatically bill recurring invoices and accept credit cards through a mobile device.  It works on PCs, iOS, and Android.

Wave – This is specialized for businesses with 9 or fewer employees.  It tracks sales, expenses, payments, etc.  It can generate reports and pay employees.  For stationary devices, it works on both Mac and PC and mobile operation is good on iOS and Android.

Expensify – This is a cool app that will transfer a record of charges from your credit card directly onto an expense report, or photo the receipts with your phone for it to extract the appropriate data for you to use for a manual expense report.

Payments

PayPal – This is a well established payment platform that now accepts an attached card reader to a tablet or other mobile device.  Named “PayPal Here” it will let customers pay no matter where you are.

Square – This is a point-of-sale app for iOS and Androids for quick payments in the field.  It attaches to the mobile device so you can handle cards at craft fairs, small shops, or other events.  Its “Square Register” will work in traditional brick-and-mortar shops.

Time Management:

RescueTime – Instead of wondering where your time went during the day, this program tracks the minutes (or hours) spent viewing websites or other applications and gives you a daily report.  It can also ring an alarm when you have reached a specified amount of time on social networking sites, etc.  It is designed to work with Mac, PC, Android and Linux.

OmniFocus – Organize your projects into a to-do list with this app that syncs devices.  Works with iPhones, iPads, Macs and Apple Watches.  Since these are devices you access frequently, your task agenda is readily visible as a gentle reminder.

TripIt – This is great for the person who travels a great deal.  It syncs all your travel plans into one itinerary, no matter which site you bought your ticket on.  It will also provide information about delays and weather.

There are a number of other applications that can be used to help you become more organized, track packages, or track a project’s progress.  Time is money so try to save both with some of these terrific programs available.

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

- The Capex Team

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How to Improve Company Culture

Company culture is the general work environment of an enterprise.  It can include goals and attitudes as well as amenities such as educational opportunities, facilities, and advancement.  Shared values are important to an employer and employees because it will allow the company to attract and retain workers who will help the company succeed.  The employees will appreciate the atmosphere and stay to help the company grow.  Lower turnover means a stable and productive work force and people who are happy to come to work each day. 

The company attitude also reflects in how your employees deal with customers.  Your clientele will recognize a good working relationship and that should improve your branding, which should result in more customers and more revenue.

There are some things you can do to establish or improve current company culture:

Values and Goals – Make sure that the people you work with or who work for you understand the ultimate goal of the company as well as the values that you feel are important.  That will give them a clear vision of how you want your company and its business handled.

Flexibility – Many companies can offer flexible schedules, job sharing, or the ability to work remotely.  Especially if your employees work through breaks or lunch, it is nice if you allow extra time for medical appointments or difficulties with child care.  If this is not possible, consider comp time where they have the ability to make up lost hours.

Encouragement – Everyone wants to know they are doing a good job.  Don’t assume they will recognize this.  Mention it on occasion.  If there is room for improvement, do it one on one and with kindness and suggestions on how improvements can be made.  When they have done better, mention it.

Listen – Oftentimes employees will spot a problem before management, or they have realistic suggestions for improving efficiency or service.  If you truly give consideration to what they are saying, you may save yourself some headaches.  This includes frequent communication and even team building exercises.

Teams – The relationships between employees are as important as your relationship to each person.  If there are conflicts, resolve them quickly and reasonably.  Teams are different from just people working together.  If you have concerns, there are a number of books and research articles to help you turn your work force into a solid group.

Bonus – Everyone appreciates a year-end bonus.  Not all extras need to be monetary.  It can come in the form of allowing people to leave early when bad weather is setting in, or allowing casual attire (if appropriate to the company business) or recognizing birthdays or job anniversaries.  How about an impromptu donut day or end-of-project pizza party?  Profit sharing can be an incentive.  If so, be sure that your calculations are transparent.  Show the employees the company results and let them know how the profits are allocated.  This is important so that your employees won’t think the amounts are arbitrary or show partiality.

Running a small business means that you need to keep a wide range of actions in process at all times.  Keeping your company’s culture thriving is one of them you should not ignore.

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

- The Capex Team

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Where Can I Find a CPA Near Me?

A good accountant can be a boon to a small or medium sized business.  Bookkeepers are great for making entries into the accounts, but a CPA will help you navigate tax laws, provide financial advice, and help with other business decisions.  The problem is how to find a CPA near you that’s appropriate for your business.

Ask Around

Networking is not just for generating new business.  It can also lead you to professionals who can help you in corporate maintenance, like accounting.  When you ask about who the CPA firm is, also ask why the other person/company likes them.  Had they worked with anyone else and if so, why did they change.   

If you don’t get any good leads, try the internet.  Search for accountants that deal specifically with the size of your business and, if possible, the field or industry you serve.  If you opt for cold calling, ask the receptionist those same questions so you can narrow your possibilities.

Questions

Prepare a list of questions you want to ask prospective CPA firms.  That should include billing rates, how they are determined.  What if you have a quick question?  Will that be included in the billing or separately?  How about emails?  While you are at it, ask about the accountant’s availability, like their phone call or email policy.

Choose candidates that deal with your line of business or related issues.  For instance, if you do international business, be sure the choices are those familiar with other tax laws.  If you do business over the internet, the selections should be people who thoroughly understand ecommerce.

Find out what other related services they might offer like how to develop selling strategies or how to locate investors.

Make Appointments

Once you have narrowed down your group to four or five, finish the research by finding out about their educational background (CA or CGA) and professional associations to verify qualifications and assure there are no outstanding issues.

Then arrange for a face-to-face introductory meeting, which should be at no cost to you.  Ask your questions and any others that crop up during the conversation.  See if you are both comfortable with each other.

Be sure to bring along your last tax return and any other pertinent financials like balance sheet, etc.  That will give the accountant an idea of where you are in the business picture.

Conclusion

At the end of all this work, you should be able to make a reasonable decision about a good accountant that can help you build for the future.  At that point you can arrange for regular meetings.  You should physically meet with your CPA at least annually and more often if necessary.  You need to receive regular updates about any changes in the tax laws and how they might affect your business operations.  By working with your accountant mid year, you can adjust your strategic plan with an eye toward saving at tax time.

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

- The Capex Team

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5 Tips That Will Save Business Owners Money

As a business owner you have a responsibility to monitor expenses.  It is not being miserly; it is sound business acumen.  There are always approaches that you may have dismissed in the past or simply haven’t considered.  Here are some things to ponder.

Negotiate

Working with suppliers, it doesn’t hurt to try to negotiate a better deal.  It isn’t necessarily a lower price, but sometimes more favorable terms like having an extra month within which to remit payment, or a discount for paying early.  Even if you have used the same vendors for years, check out their competition and see if you are really paying the best rate for the products or services you need.

Purchases

There’s an app for pretty much anything these days.  One valuable tool are applications like Ebates and browser alerts to let you know when prices on designated items are being lowered.  It is like your grandma using grocery store coupons or watching the ads for sales.  It may be even more savings if you purchase those items in bulk.  However, there are some criteria like making sure it is something you actually need and use in the regular course of your business; the price is really lower than any other you can get; you will use the product in a timely manner before it spoils, expires, etc.; and it won’t cost you anything for storage.

Hiring

The hiring process is time consuming.  Finding the right fit of skills and personality, especially in a small business, can be tricky.  Then there is the time investment in training and cross training, just to have them leave the company (voluntarily or not) within a few months.  If you offer benefits to your employees, this increases the paperwork and the cost.  Some alternatives are to use freelancers or part-time employees, who are less expensive. 

Equipment

You need the right tools to do the job correctly.  However, that doesn’t mean everything needs to be factory fresh.  There are a lot of good sites like eBay that offer good, relatively new equipment at better prices.  There are also some charities that accept donations from companies upgrading equipment and then the charity resells to other companies.  Just because you are buying something pre-owned does not mean you need to buy something in poor condition or so out of date you will be sorry.  Before you pay for it, make sure you can return the equipment if there are serious problems. 

Payables

Pay bills on time.  Late fees and interest payments can really add up over time.  Reminders help to get the check in the mail promptly as well as to contact anyone on your receivables list.  If you can get your customers to pay as quickly as you do, you stand a better chance of having a positive cash flow.

These are only a few ideas.  Check with your accountant in Mississauga or Brampton about more money saving tactics that you can implement.  He or she will most likely have a number of ideas for your business that can prove beneficial over the short and long haul.

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

- The Capex Team

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Business Performance Indicators to Watch For

There are a number of tools available to business owners to keep tabs on its status.  These are generally known as Key Performance Indicators (KPI).  Some of them track financial issues but others deal with marketing or customer service.

Net Promoter
This comes in a number of forms.  For telephonic service, there is usually a message to please stay on the line for a quick survey after the completion of your transaction.  Restaurants and department stores will provide a code at the bottom of your receipt that includes an inducement with the promise of a discount or chance to win cash.  People are more likely to respond if it is quick and painless.  If it is immediate, they will probably rely on gut feeling and you will have a more accurate response.  Anything that comes in the mail or needs to be handled at home has less of a chance to be answered.

Then you need to review the responses.  The easiest is a numeric (1 worst; 10 best).  You can establish your own yardstick.  For instance, a rating of 7 or below would involve some further research.  Consistent low marks means you are heading for serious problems.  Look at the low scores and see if there are any patterns, like an automated phone routing system that needs upgrading, or a particular employee that needs training.  If warranted, you may want a personal phone call to the customer to get to the heart of the issue. 

Lost Customers
This is a simple percentage of customers you no longer do business with compared with the total number of customers you have.  Some attrition is expected, but keep tabs on this number.  It is nice to have new shoppers, but you want a firm percentage of return clients to maintain a solid business.

If possible, follow up with lost customers to find out whether they are simply not a good fit for your product, or you have more serious issues afoot.

Conversions
For an online business, this is easy.  Find the number of hits to your site as compared to the number of orders.  Service industries have it a little tougher.  If you have a sales force that works on commission, this should give you some idea.  You might need to be creative to find out the numbers so you have solid information. 

If you are concerned, check the standards in your field to see what your competitors are sensing.  Then you can analyse what you are (or are not) doing to move inquiries into sales. 

Customer Value
Often companies will rely on a key client to generate revenue.  It is a good idea to examine your lesser clients, especially if they are the cash flow that keeps you going during lean times, sometimes referred to as bread and butter revenue.  Check to see if these individuals or companies are still providing the same or increased revenue as they have in the past.  If not, it may be time to do a little marketing.

If you want to be successful, it is critical that you monitor these key indicators along with all the financials recommended by your accounting firm.

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

- The Capex Team

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Should I DIY My Bookkeeping?

At some point in their business set up, every small business owner asks if they should DIY their bookkeeping.  Each business operation is different as is their owner.  In the end you need to decide what is right for you, your business, and the economic situation a the time. 

Money

The thought of outlaying funds for something you can very well accomplish on your own is often what drives business owners to completing their own bookkeeping and taxes.  It depends upon how much you value your own time and effort.  It will probably take some time on a weekly basis, or possibly a bit longer on a monthly basis, to keep all your records in order and have the necessary reporting to know if you are financially stable or not.  It will take several days, or a weekend, to complete the tax returns.

If you have a good understanding of accounting principles and have the dedication to keeping your records error free, you should definitely tackle the project on your own.  However, if you have any concerns about filings, the fees you pay an accountant will certainly outweigh the penalties and interest involved in errors. 

While doing your own books will certainly keep you in closer connection with your financials, if you hire a good accountant, they should alert you to any irregularities.  They should also be available for questions or concerns.

Who to Hire

You can be reluctant to hire a bookkeeper if you have had a bad experience in the past.  Not everyone who calls themselves a bookkeeper is really good at it.  Ask around for recommendations on Bookkeeping Services and interview them to see if it is a good fit.  If you already use an accountant, see if they have any suggestions.  Proper bookkeeping should save you money and/or make your business more profitable. 

Time and Money

Of course, hiring a bookkeeper, even part time, will cost some money.  If you are already having cash flow problems, this could be an issue.  However, when the burden of tracking all the numbers is off your plate, you may be able to devote time to growing the business.

Timing is another issue.  You will have more hours to look at daily operation and you won’t have to catch up all at once. 

If you are struggling with keeping all the numbers up to date and making sense, or if you dread the hours it will take to do the quarterly reporting, annual taxes, and financial statements, finding a reliable and professional bookkeeper is a real option. 

On the other hand, if you want to maintain strict control over all aspects of the business, then you need to find a way to carve out the time to make the entries and see that everything balances.  At the end of it all, you need to make the decision that makes the most economic sense for you and your business.

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

- The Capex Team

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Reasons Why an Accountant Can Save You Money

You have had such a great idea and it really paid off.  You have started your own small business and people love it.  Unfortunately, you now need to deal with all the details, like bookkeeping and tax preparation.

Tax law is complicated and few entrepreneurs understand the documentation they need to keep, what is allowable and what is not.  It is important to take advantage of any deductions and credits, but you are busy working on the business and it becomes difficult to do everything.

The best solution is to hire an accountant.  He or she will be able to help you organize your records to give you the best advantage with the CRA.

Experience

When you hire an accountant or an accounting firm, you are paying for their expertise.  They understand the complexities of the tax system and know where and how to save you money by minimizing the tax and maximizing any refund. 

You may be able to handle matters on your own, but you probably won’t have the time or resources to carefully research all of the deductions and credits allowable.  An accountant deals with small businesses daily and is able to do the best job for your needs.

Efficiency

It will take you far less time to accumulate and send the necessary paperwork to your accountant than it will take you to actually prepare and file tax returns.  That means you would be robbing your business of precious hours that could be better spent growing the enterprise or resolving other issues.  It also means you will have more time to spend with your family or in leisure activities.

Yes, you will be paying the accountant a fee, but part of that money goes toward the efficiency you will gain.

Prioritizing

As a small business owner, it is often difficult to carve out enough time each day to take care of important decisions and even less time for mundane tasks like bookkeeping, even though they are critical to the success of your business. 

Working with an accountant that uses cloud services, makes everything simpler. 

Peace of Mind

Using a qualified accountant gives you the ability to stay composed.  You have the confidence that matters are in professional hands and you can just wait for their resulting report.  This means you can focus on the operation of your company and leave the bookkeeping to those who understand the importance of this task and are working for your benefit. 

Fewer Errors

A small error in tax preparation can mean a significant monetary loss.  Avoiding penalties and interest payment should be a priority.  Using an accountant means they will be on top of all the critical elements involved in your tax preparation.  Their knowledge of the tax laws and regulations will help avoid problems and save you money in the long run. 

The bottom line is that the stakes are high and you need the best professional advice and operation possible. 

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

- The Capex Team

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Habits of Successful People That You Can Learn From

Sometimes we all look at successful people and wonder how they got there.  Besides hard work, a strong sense of self seems to be a consistent quality.  Add to that some ambition and generally, you have a recipe for success.  Looking at these individuals, there are some habits they have cultivated that can help anyone flourish 

Goals

Create exact and specific goals.  Have a mental view of where you want to be.  Create the steps to get there.  Write it down and be specific.  Instead of “I will increase my sales calls” try “I will speak with 5 potential buyers this week in order to increase my revenue this month by 25%”.  This may seem overly detailed, but it is precise, detailed, and quantifiable.

At the end of each day, you can also record your achievements.  Even if you didn’t completely reach the goal, you can write down the movements toward your goal.  Journaling is an effective way to improve your outlook as long as you keep all statements positive.  Another technique is to create a vision board.   

Also realize that goals change.  As human beings we also change and evolve.  Be sure you take that into consideration as you move toward your objectives.

It’s Not Work

Work has the connotation of drudgery.  Instead consider productivity.  Start by allocating a specific amount of time to complete a task.  This will keep you focused and result in a satisfying conclusion. 

Keep time available for creative thinking and processing.  Eliminate distractions and interruptions and let yourself be open to possibilities. 

Giving Back

Reserve some time to give back to the community.  Writing a check is great, but giving your time and energy is better.  Former President Jimmy Carter favored Habitat for Humanity, driving nails and putting up walls.  You can choose to be a mentor to a student or volunteer at a food bank.  It depends on your interests and skill set. 

The important thing is to think about someone other than yourself and how you can be of assistance.

Uncomfortability

Most successful people push to get out of their comfort zones.  Whether it is public speaking or trying a new sport, attempting something new is helpful to provide perspective.  You won’t be perfect at everything, and in fact you might fail miserably.  However, we can learn as much from what doesn’t work as what is great.

This will definitely be scary and feel totally unnatural.  Once you put aside ego and pride, you may find some real accomplishments. 

Questions

Ask questions; actually, ask great questions.  Curiosity gives rise to solutions.  Focus on a result rather than a cause.  Creating a dynamic conversation with others is a great way to learn new things. 

It can also help to understand who you are and where you really want to go.  Find your own path and formula to get there. 

While these are habits of successful people, they may or may not be your prescription.  Find what makes you happy and how to achieve that goal first. 

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

- The Capex Team

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A Freelance Worker’s Guide to Filing Taxes

Working as a freelancer is very popular.  The money earned is, of course, taxable, no matter how little.  Failure to declare this income will mean a 10% fine on the amount you concealed.  The good news is that the Canadian Revenue Agency (CRA) has provided all the tools you need on their website.  Here is an overview. 

Preliminaries

If you start with the basics, it all becomes considerably simpler at tax time.  First, you need to decide whether you will work under your own, legal name.  If so, then you do not need to register as a business.  However, if you want to work under a company name, you will need to register as a business name and open a separate bank account in that name.

In either event, you will need to keep an ongoing record of all income and expenses.  This could be as simple as an Excel spreadsheet or one of their templates.  There are also a number of good programs available for small business enterprises.   

Keep a folder (either paper or electronic, or both) of all receipts. 

Expenses

The CRA allows the deduction of certain expenses to offset the amount of revenue.  There are actually a lot of items that fall into this category.  Check the website to review, but here are some of the more common ones:

• Supplies and equipment. This will include any new laptop, upgraded equipment like microphone or scanner. You can also include marketing items like online ads or flyers.

• Phone. It would probably be best to have a phone dedicated to the freelancing so that you can track any charges.

• Travel. If you need to travel to see a client, you can deduct the gas cost or train ticket. You can also charge the meals while out of town.

• Professional Associations. This will include charges incurred when attending a conference.

Budget

With every payment you receive, reserve 25% to cover the annual taxes due.  If you do it as an ongoing chore, you won’t be surprised at the end of the year, and you will have the cash reserves to cover any taxes. 

Taxes

You will need to continue to complete a T1 but as a freelancer you will need to add a T2125 to provide the detailed list of income and expenses.  You will need to include your spreadsheet and receipts with the filing. 

You may be subject to Goods and Services Tax (GST), which is federal taxation on Canadian goods and services.  The Harmonized Sales Tax (HST) and Provincial Sales Tax (PST) are provincial levies similar to GST.

However, you also get to claim a credit on all GST/HST that you paid in order to run your business.  Just remember that it is critical that you file regular GST/HST forms and pay those fees. 

If the gross (total amount before deducting expenses) business revenue is less than $30,000 for the tax year, the business is exempt from the GST/HST.  Check the CRA website for more information. 

If you have any concerns, contact the CRA or consult with an accountant about the best choices for you and your freelance business. 

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

- The Capex Team

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Estate Freeze Trust Tips

An estate freeze is a tactic available in Canada to fix the current value and taxes of assets of a person but give the future growth to someone else.  This means the original person gets to continue controlling the asset but someone else to benefit (and pay the taxes) at a later date.

This is something that usually involves a small business or a family-owned enterprise.  It lets the original owner to keep control during their lifetime, but after their passing, the asset goes to the named person or persons who are liable for the taxes.  So it basically defers or delays the payment of taxes but the new owners get to reap the benefits of an increase in value.

Reasons for implementing this technique include:

• Reduce and delay tax, including probate fees.

• Using up all lifetime capital gains exemption (LCGE) or you have a spouse or child(ren) who have not used their LCGEs.

• Keep the business in the family or in the hands of a trusted friend or employee.

This is not some form that you can simply download from the internet.  It takes careful planning.  If it is something you are even remotely considering, first contact your accountant and attorney.  It will involve corporate law experts and estate planners.  Your Will must be written to ensure that the freeze is set up when you die.  It could also involve matrimonial issues.

If the estate freeze is not set up properly, it could create an income tax nightmare.

With the complexity of this choice, you will probably have to pay additional fees to your attorney and accountant.  It may be that you need to secure the services of specialists in the field of estate freeze trusts.  Once it is set up, the regular corporate accounting fees may also increase.

Timing is another critical issue.  If the freeze trust will last longer than 21 years, there are other tax and legal implications.  If you consider selling the asset, there could be problems.

If there is a family trust already established, this further complicates the whole issue.

In general, it is a good idea to avoid having a U.S. citizen as the beneficiary in this arrangement.  The United States Internal Revenue Service has very specific regulations surrounding gift taxes and trusts.  If you are determined to include a U.S. citizen, you should add an attorney from across the border into the discussions.

When new shareholders come into the estate freeze, there should be a shareholders agreement put into play.  This would ensure that there are conditions for the sale or transfer of those shares.  It may also include any restrictions that the original owner may impose.  

While this is certainly a complex procedure, it can also be a very effective estate planning tool.  If you have questions or are interested in the prospects of this arrangement, please feel free to contact us.  We will be happy to set up an appointment and discuss the options and possibilities.

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

- The Capex Team

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Tips for Hiring an Employee or Consultant

The CRA views employees and consultants (or contractors) very differently.  When you are using the services of another person, you need to seriously consider which would be better for your company…to hire the person as an employee or contract as a consultant.

Contractors

For the employer, a contractor is less paperwork.  The contractor is not entitled to any benefit packages, pensions, insurance, or other common benefits.  Payments to the contractor will not involve any income tax withholding or employment insurance (EI).  You also get to assume that the contractor is thoroughly skilled at their job, so you don’t need to worry about offering ongoing education or in-service training.

You have the ability to use them or not.  So, if your business is in a slump (seasonal or otherwise), you can simply discontinue the consultant’s services.  The downside of that is when your business picks up again, they may or may not be available to work for you.  You would then need to find and orient another consultant.

While you only pay them for the time or work produced, they can take on other clients, including your competitors.  They may also decline a project or take time off (like vacation or sick leave) without your permission.  A lot of it depends on the contract you negotiate.

Employees

For an employee, there is a defined relationship called “boss/worker” that lets the employer have control over the individuals work.  The employer is also responsible for complying with all legislation dealing with minimum wages, holidays, leave status, etc.  The employer is also responsible to deduct for taxes and other items.

Employees fall into two basic categories.  Indefinite is when the individual has a specific start date and goes on until either the employer or employee terminates.  Fixed Term is when the individual has both a start date and end date, like for seasonal employees.  Either Indefinite or Fixed Term can be part time or full time.

Problems

A serious situation can develop if you have an individual that you think is a contractor but is later determined to be an employee.  In that case you, as the employer, will need to deal with any unpaid taxes, CPP, EI, and possibly penalties and interest.  For the individual, they would be liable for any business expenses they claimed but are no longer entitled to. 

Status

The CRA has some criteria to decide if the person is an employee or not. 

• Control – For an employee status, the employer decides the salary and where and how the work is done. A contractor gets to choose the hours they will work and planning on how it will be completed.

• Tools – It depends on who owns the “tools”. For someone in a repair or construction line of work, this is pretty obvious. However, for an office employee that could mean who owns the computer/laptop, phone and other devices.

• Finances – If you are responsible for your own operating costs and take responsibility to have anything repaired, you are a contractor.

• Integration – If you have multiple clients, this is a pretty good indication that you are a consultant/contractor. If you only have a single client, the area is rather grey.

Whether you hire a person as an employee or contractor, or want to be an employee or consultant, depends on the way you want to conduct your business and how you want to deal with the financial aspects and benefits.  If you have any concerns, just contact us to set up a consultation.

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

- The Capex Team

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Why Cloud Accounting Should Be a Priority for Every Small Business

Fiscal responsibility should be the primary concern for all small businesses.  However, too often the excitement of a new idea and adventure takes over and suddenly the small business owner feels overwhelmed.

From the outset, every new business owner should take control of the financial reporting.  Many operations are turning to cloud accounting as a solution and there are a number of good reasons to do so.

Access and Multiple Users

Keeping books manually is a recipe for disaster.  Keeping them all on a single computer is almost as bad.  That means only one person has access and it must be on that particular unit. 

Cloud accounting offers the flexibility for you to handle bookkeeping and accounting matters anywhere at any time as long as you have a device that has internet connection and real time data.  That means you can have multiple users.  So, someone can be issuing invoices or you can order a report without waiting for the computer to be free.  It also means the convenience of sharing the information immediately with your accountant or financial consultant.

Updates

Cloud accounting software updates automatically without hampering current activities.  So, not only is there no downtime, but you are assured of always working with the latest version. 

Cost Effective

Understanding small business needs, cloud accounting packages can be structured so that you only pay for what you need.  Then as your business expands and you need more features, they are easily added.  Using a cloud means that you won’t need fancy hardware, or an IT consultant.  This is an easy money saver.

Security

If you are worried about hacks or breaches, you should realize that cloud storage is one of the safest places to store your confidential information.  Providers use the latest in protection.  In fact, if one of your computers gets infected, you have the benefit of simply moving to another device.  Your business continues as usual.  When you have cleared the problem with the initial computer, you are fully ready to use that device again.

Data Backup

While everyone is aware of the importance of backing up your systems, too often it is simply omitted from the to-do list.  Using cloud accounting assures that periodic backups are performed as well as access to the data if it becomes necessary to retrieve it. 

In addition cloud servers are equipped with strong anti-viral programs.  They have an IT staff to monitor the safety all day every day.  With the most up-to-date electronic surveillance programs and equipment, you are assured that your data will be secure. 

Conclusion

Cloud accounting is essentially an online accounting service.  Instead of installing a bookkeeping or accounting program onto a desktop in your office, you can manage all of your financials from any device and by anyone you authorize to do so.  It is secure from outside interference and all updates and backups are automatic. 

If it is something you have thought about but not yet acted on, consult with a reputable accounting firm that promotes cloud accounting and see how it can benefit you and your small business.

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

- The Capex Team

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Ways to Advertise Your Small Business for Free

For the small business owner, budgets are tight.  However, it is imperative that the new enterprise get the word out about their service, products, and availability.  Seldom is there any room to hire a slick advertising company.  While it may mean a little extra investment in time, it will be worth the effort to take advantage of some of the free services. 

Search Engines

Google – This is a result of a Google search where your listing will appear in Google My Business.  It will reflect your location, hours of operation and directions.  You need to claim the listing and then you can customize it with additional content.  With downloading photos and other pertinent data, you can appear as sophisticated as your big-time competitors. 

Bing – You may as well cover as many search engines as possible.  Claim your spot on Bing Places for Business.  This is Bing’s version of Google My Business.  In fact, once you have a Google listing, you can simply import it into Bing. 

Others – You can also list on Apple Maps.  While DuckDuckGo does not offer a business listing, it does draw on Apple Maps, so you can get hits that way too. 

Social Media

Facebook – Establish a Page.  Then you can post frequently especially if something new is happening.  Facebook offers “call to action” buttons that can help.  If you want to invest some money, you can take out one of their ads.

Instagram – This is not ideal for directing hits to your site, but it is perfect for visuals.  Post photos and videos.  If you are selling custom products like furniture, clothing, or food, it is likely that a lot of people will seek you out.  Obviously the shots need to be good quality. 

Twitter – This is popular for freelancers and consultants.  

YouTube – If you are a good on-screen personality, you can get a lot of action from how-to presentations or discussions when you declare yourself an influencer.

There are other sites like Pinterest, LinkedIn, and Reddit.  See what best fits your personality and product line.  Start with one media site and set up some regular posts to get your business name out there.  Then you can expand to others if you want.

Blogs

Make the most of your website by posting short articles or stories.  Your blog will have the greatest value to attract customers if you use search engine optimization (SEO).  This takes a bit of practice, but basically it is using keywords (words that will most likely send a user to your site) and coding them properly.  When a user searches, he or she will find your article, leading to a hit on your site and a potential buyer.  Trade some value by becoming a guest blogger on another site and inviting them to guest blog on yours. 

WordPress is the primary vehicle to get to your SEO coding goal.  Yoast SEO plugin will give you some instructions.

Ask other business owners how they manage their accounts and see if you can pick up some tips and tricks.  Other good sources are your legal and accounting advisors to see if they have worked with other small businesses in similar circumstances.  Learn as much as you can and then take the plunge.

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

- The Capex Team

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Tools To Help You Manage And Market Your Small Business

As a small business owner or entrepreneur, you have your hands full with accounting, administration and general issues.  You keep hearing that you need to expand marketing but you find it hard to allocate the time or financial resources.  Here are some things to consider that are free or very low cost.

Google Tools

Google offers you a number of free programs that can help you get more viewers to your site.  Analytics gives you data on how users are accessing your pages and where the viewers are coming from.  This gives you a perspective from which you can adjust any pages and post blogs. 

Trends gives you a heads up on current subject matter and catchphrases so that you can incorporate them into your posts.  The theory is that it will give your business attention in the midst of the active buzz.

My Business is another tool that provides visibility and easy access to your hours, maps, and AdWords. 

Social Media

This can be a two-edged sword.  Use it judiciously.  It is important to keep up Instagram and Twitter posts, but being too clever can explode back into silly memes.  It is still important to keep the posts going so that you are kept in the forefront of your customers.

Email

Although it seems somewhat “old school,” it is still an effective tool especially in announcing special pricing or promotions.  There are some inexpensive tools like MailChimp that helps with automation and response data to help you adjust your program.

Blog

Not just hawking your wares, like an ad, but providing valuable information like comparisons of product types (i.e. latex paint versus oil based, etc.) will increase readership.  Regular posts are seen by the public as reliable.  If writing is not in the skill set of your company, there are a number of freelancers who will be happy to help.

Logo

If you are trying to develop a unique logo or your current one needs some updating, look at Spaces.  This is a free program that helps you design your own branding from hundreds of fonts, frames and icons.

Video Ads

As long as it is a short and concise ad, consumers seem to respond favorably when it comes time to purchase.  Using an app like VideoBoost and a good camera that will produce an HD image, you can come up with some effective material.

Advisors

Don’t overlook the human element in all of this.  Engage your customers in friendly conversation and see if you can find out what attracted them to your site, store or service.  Check out your competitors and see what their marketing efforts look like.  Remember to look at those competitors who are not as successful as you to find out what doesn’t work.  Find a friend or relative who is in the demographic you are trying to attract and see what they say about how they shop and their preferences in marketing. 

There are a lot of free or low cost alternatives that can move your business from scraping by to booming.

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

- The Capex Team

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How Hiring an Accountant Can Save You Money

Small businesses, especially those just starting up, are always looking for ways to save money.  Most start out by saving a bit by handling the financials on their own.  Frequently it starts with a simple spreadsheet and then migrates to a software package.  There are some drawbacks to self accounting.

Time – Time is always a premium when you are a business owner.  The hours you spend on the books means less time for marketing, planning, and customer service.  

Errors – For accountants, dealing with taxes and financial issues is their only business concern.  For the small business manager, there are daily distractions.  Here are some of the common mistakes when an owner deals with accounting without professional help.

• Missing HST/GST registration or collection

• Not taking all deductions available

• Failing to account for depreciation

• Missing province-specific benefits

• Causing the CRA to question entries and trigger an audit

Keeping Organized – The tax and other accounting functions require a lot of back up materials.  It also means handling these matters at least weekly and sometimes more frequently.  If all the documents are not easily accessible, there is a considerable waste of energy.

On the other hand, the fee you will pay to an accountant will get you these benefits: 

Knowledge Base – An accountant has the education and experience to easily deal with the basics of cash flow management, taxes, and other critical functions.

Keeping Tabs – An accountant uses a system to help you with bookkeeping and general record keeping.  This means you have the ability to review where your money is coming and how it is being spent.  It also helps you see what services or products are doing well and which may need a boost or to be dropped.  These trends are frequently something an accountant can notify you about so that you can create the appropriate strategies for spending.

Taxes – An accounting firm is able to help you keep on top of all the due dates for remittances.  They are also experts at knowing how to complete the tax forms to the best interest of your company.  Accountants keep up to date on all the regulations and nuances of the law.  Penalties can add up quickly.

Advice – The accountant is a valuable resource for information and counsel when you are trying to make business decisions.  They are able to discuss profitability and can guide you in the best direction for your company.  They are able to help revise your business plan and suggest strategies to increase your returns on investments.

Reliable – As a third party, they have an objective viewpoint on your operations and are happy to help find ways to increase your profits.  They are also able to guide you toward reasonable targets.

Connections – If you are looking for investors or are considering applying for a loan, the accountant may have ideas of individuals or companies who are most likely to consider investing in your type of business.  They will also help you gather all the financial records and prepare the reports necessary for you to complete the business plan.  They may even let you do a dry run of your presentation and help with suggestions.

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

- The Capex Team

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Ways To Spring Clean Your Small Business

After a long and dreary winter, spring comes along and you feel invigorated.  You probably spend more time outdoors puttering in the yard, or putting on the golf course.  As a small business owner, this is also a good time to assess your business and give it some sprucing up.

Electronic Presence

This is a good time to freshen your website.  Replace photos and have some new copy written; use a different font or color combination.  Be sure everything is in working order and your potential customers are not receiving messages like “Page Not Found”. 

If you are not on social media accounts, you should be.  Especially if you have introduced new products or service, it is a good time to post photos.  Even if nothing has changed, post something positive about your customer service; show smiling faces and a relaxed atmosphere.

How long has it been since you looked at your email list.  It may need some culling.  Offer discounts or specials for loyal clients.  Make your company sound exciting and fresh.

Goals and Plans

Take a look at your business plan.  In fact, if you have it, dust off the original plan you started with.  It is likely things have changed over a year or few but remembering why you started your business and what made you happy can go a long way toward looking at the future.  Revisit your long-term goals. 

Budgets are never fun to do, but think about a zero budget, where you start from scratch.  It will help you decide where your priorities lie and where you can trim some expenses.  It might mean rearranging staff or prompt you into letting underperformers find new employment.

Analyses

Many companies use Google Analytics or similar programs.  This might be the time to see how your customers are finding you and where they are searching on your website.  It can spawn ideas for improvements or new product lines.

Find out how satisfied your customers are with a survey.  If you tag on an incentive, like a percentage discount with their next order, you are more likely to engage their interest and actually receive a response.

Speak with your employees and really listen to what they are saying.  You could learn some very interesting things.

Consult with your accountant, attorney, mentor, and other business advisors.  They can be valuable partners in your search for information about how to improve your company, its worth, and your dreams.

If you're looking for an accountant in Brampton or Mississauga, Contact our team at CapexCPA today for more information.

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

- The Capex Team

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