Numetrica Cloud Accounting

Startups face numerous challenges, particularly in the realm of accounting. Accounting lays the groundwork for all other business operations and can be complex, but mastering it is crucial for success. Here's a condensed guide on how startups can manage their accounting needs:

**1. Importance of Accounting**

- Accounting is vital for understanding financial standing, managing expenses, sharing data with stakeholders, analyzing competitors, and identifying investment opportunities.

**2. Basic Financial Records**

- Essential financial records include bills, receipts, invoices, bank statements, credit card statements, financial statements, and tax forms.

**3. Basics of Accounting for Startups**

- Analyze Business Transactions: Track all transactions and categorize them for clarity.

- Keep All Invoices: Maintain a record of all invoices issued and received.

- Reconcile Bank Statements: Compare bank and cash balances to catch any discrepancies.

- Write Journal Entries: Use a journal to record daily purchases and sales.

- Post to Ledger Accounts: Classify entries under appropriate ledger accounts.

- Close Temporary Accounts: Zero out temporary accounts at the end of accounting cycles.

- Track Taxes: Consistently monitor taxes throughout the year.

**4. Develop a Bookkeeping System**

- DIY: Manage accounting yourself with software or Excel.

- Outsource: Hire a part-time or freelance accountant.

- Hire an Accountant: Employ a full-time accountant or team for a large operation.

**5. Startup Accounting Software**

- Accounting software like FreshBooks, QuickBooks Online, and Xero can streamline processes and facilitate analysis.

**6. Identify Your Accounting Method**

- Choose between Cash and Accrual methods depending on your preference.

Accounting is a cornerstone of business operations and should not be neglected. By carefully managing accounting needs from the outset, startups can set themselves up for future success.

For more information

Business transformation encompasses a range of objectives, from boosting efficiency and profitability to enhancing financial management and team productivity. It's about envisioning a more successful and effective business model, one that potentially saves money and optimizes costs.

Creating a system to grow and manage your business is key to realizing your vision of business transformation. This involves systemizing functions to streamline operations and free up manpower for business growth. Having a clear picture of your business goals is vital, whether that's acquiring more clients, improving reporting, or simply being more in control of your business.

While financial gains may be a primary motivator, larger factors like providing for your family, contributing to your community, or achieving personal well-being can also drive your transformation journey. Automation tools and strategies can be invaluable in this process. Some notable tools include Quickbooks Online, Wagepoint, Tsheets, Receipt Bank, Helm, and Invoice Sherpa.

Routine analysis of reports generated by these tools is crucial for tracking progress and identifying areas for improvement. While it may initially feel daunting, persistence in implementing tools and strategies will yield results over time. Each step forward, no matter how small, is a success in the journey toward business mastery.

Every business has the potential to positively impact its owners' lives, whether professionally or personally. As Tony Robbins aptly puts it, "If you do what you've always done, you'll get what you've always gotten." By committing to a personal growth plan and making changes, one can achieve the desired results and transform their business for the better.

Cash flow management is an essential aspect of business that often requires a well-thought-out strategy to ensure a company remains in the black, rather than incurring debts that could lead to its downfall. Businesses can fail when they overlook this concept, with 80% of such cases being attributed to this oversight. It's crucial that sales exceed expenses and that clients are chosen wisely to guarantee collectibility. Professionals like lawyers may request retainers to ensure timely payments.

Advancements in technology have facilitated cash flow management, and implementing certain strategies can help keep a business profitable:

1. **Track Time and Value:** Measure the time spent on client work against its value, identifying economically fruitful projects and delegating less profitable tasks. For example, tasks like sending emails can be delegated to staff members at a lower cost.

2. **Automate Invoicing:** Utilize software like Quickbooks Online or Invoice Sherpa for invoicing to streamline the process.

3. **Prioritize Payment Collection:** If feasible, collect credit card information in advance and keep it on file for faster payments.

4. **Use Cash Flow Applications:** Applications like Helm can be used to monitor cash flow in real-time.

5. **Budgeting Tools:** Applications such as Budgeto can provide insight into cash needs and help with forecasting.

6. **Offer Additional Services:** Provide complementary services to increase revenue.

By leveraging technology and adopting these strategies, a business can enhance its cash flow management and maintain a healthy financial standing.

Cloud accounting software works exactly just like the traditional accounting software, only the cloud accounting software just like QuickBooks online is hosted on remote servers of QBO Transaction data is sent into “the cloud,” where it is processed and returned to the user. 

All application functions are performed off-site, not on the user’s desktop. Which enables you to use the platform from any devise as long as you can log in to QBO. In cloud accounting, users access software applications remotely through the Internet or other network via a cloud application service provider.

Using cloud accounting software frees the business from having to install, maintain and upgrade software on individual desktop computers.

Cloud accounting solutions also allow employees in other departments, remote or branch offices to access the same data and the same version of the software.

How is Business, Really How is The Business?

Maybe it was an idea that struck you out of nowhere, or perhaps your small business’ inspiration was an idea and plan that was years in the making. Whichever it was, your small business is your baby, and running it successfully is something that is of paramount importance to you. With that being said, there are so many aspects to successfully running your small business that it can make even an experienced entrepreneur’s head spin. 

It is vital that a business owner has an intimate knowledge and relationship of the inner workings of their company, from local and global supply and demand to marketing strategies, and perhaps most importantly, the financial blueprint for their small business. 

Today, we want to share with you some focus areas that will ensure that you are leading your business to growth and success. By honing in on these tips and growing your knowledge in these areas, as well as knowing when to reach outside your office walls for assistance, you will be well on your way to small business achievement.

Running a small business is no easy feat by any means. It requires daily effort, vision, and drive, among many other things. But one area where the mastery of small business finds most owners caught between a rock and a hard place is in the financial management of their operations. This area can affect every other facet of their business and make any normal person mad.

There are so many things to think about, let alone to manage. Do I hire an accounting services firm to help? Which cloud accounting software is the best for the needs of my business? And that’s not all you need to be thinking of with your business.

Getting a handle on your business’ financial structure and management early on in the life of it has a direct impact on how it fairs in the future. Businesses that start healthy financial management early create far more opportunities for growth and innovation than businesses that fall quickly into financial mismanagement. Keeping your business in a state of thriving and growth is a direct correlation to how you’re handling the financial health.

Today, we want to dive into some tips and ways you can start mastering your small business by focusing on the financial management of your business.

Journey from Inception to Success

It is extremely important for start-ups, entrepreneurs and even business pros to keep track of their business expenses. These expenses will reduce your taxes when it comes to file your personal tax returns (t1) or corporate tax returns *T2).  When tax season starts the deductions will help and forms your strategic plans to perform tax planning, maximize tax deductions and minimize tax owing. So here are some categories that already exist. All you have to do is take advantage of any or all of the following expenses that apply to your business.

Startup costs

Startup costs are the initial costs that you have made.  Which includes:

·        Incorporation fees,

·        Franchise fees and purchase of an existing business or assets,

·        Opening your business location,

·        Market research and analysis,

·        Business plans write ups,

·        Marketing and advertising,

·        Employee training,

·        Professional fees, such as lawyers, accountants,

·        Initial travel expenses

·        Website development

·        Assets roll-overs to the business

·        Goodwill

·        Home office expenses

5 deciding features in selecting a professional to prepare your personal tax return (T1)

Consider these factors when you are looking for a tax professional, please get a professional to help you if your taxes are complicated.

1.                   Education and training

There are different levels of professionals who prepare tax returns. Some are CPAs meaning they are university graduates who have passed the rigorous CPA exams. None designated accountants who have graduated from college or university but have taxation knowledge. Lastly, there are individuals who have some basic training in preparing a tax return or have learnt to use taxation software to prepare returns. More education and training definitely means more competencies.

2. Experience.

In any professional fields, experience is extremely important. Generally, a professional with 20 years of experience can help you more in comparison with less experienced professional. In my experience, when I’m asked with a tax question, I can provide the answer right away and don’t need to research it, meaning less time spent on clients file. Time is money. Experience is also provides the preparer with a high level view on the preparation of the tax returns, meaning strategies can be built.

3. Complexity of the tax return

Some tax returns are more complex than other. There may be interest income, stock trades, rental properties, foreign income, disabilities, tax splitting, employment expenses, Use of home, use of auto, or self-employments, ensure to ask about a tax professional’s experience and knowledge related to your particular tax situation to ensure they will be able to handle your return. We prepare all the above and also prepare corporate taxes (T2) and SRED (scientific Research and Experimental tax return) and also trust returns (T3).

4. Relationship

As a dentist running your own practice in Canada, tax planning is an important part of managing your finances. Your choices about business structure, deductions, income smoothing, and retirement savings accounts can significantly impact how much you pay in taxes each year.

 An optimized tax strategy can lead to substantial savings over your career. Before delving into key options around your taxes, consult with both a tax professional and a financial advisor to ensure coordination. Tax rules can differ by province, so be sure to understand both federal and provincial regulations that apply to your practice.

 Let’s take a closer look at some of the top dentist tax planning realities in Canada – and how you should approach them to maximize your savings.

Dentists in Canada have two main options for how they structure their practice, and this choice significantly impacts how they file their taxes:

Forget dividends, it is a trap! John is a lawyer and asked me to review his financial statements. While I was reviewing the income statements, I noticed that the total salary for the 12-month period was 45K.

Here is my interview with Kristy Cameron about the CEBA LOAN on CFRA.

Consequences of businesses getting closed if they don't pay the CEBA loan.

Ottawa-based accountant Moe Tabesh has started an online petition that is quickly gaining traction. With over 13,000 signatures already, he is calling on the feds to consider forgiveness for unpaid CEBA loans. At the very least, Moe wants the Trudeau government to entertain a negotiating process with Canadian businesses who are struggling to find the money. He joins Kristy Cameron to explain further https://chng.it/rYSRm8JbQ7

As a business consultant, I have witnessed firsthand the struggles of my clients who have borrowed funds through the Canada Emergency Business Account (CEBA) to keep their businesses afloat amidst the economic turmoil caused by the pandemic. These are hardworking individuals who contribute significantly to our economy, yet they find themselves unable to repay these loans due to continued financial hardship.
The CEBA was designed as a lifeline for small businesses during an unprecedented crisis. However, with over 800,000 approved applications and nearly $35 billion disbursed as of January 2021 according to data from Export Development Canada (EDC), it has become clear that many businesses are still struggling and may not be able to repay these loans.
We must remember that behind every business there is a person or family whose livelihood depends on its success. The inability to repay these loans can lead not only to financial ruin but also immense personal stress and anxiety.

Nearly 900,000 businesses were approved for the program, which distributed just over $49 billion in loans. About a fifth had paid their loans in full by the end of June.

According to a recent survey, 16 per cent of CFIB member businesses said they would be seeking an additional loan from their financial institution to meet the forgiveness deadline. Another 9 per cent said they were considering using home equity to help pay off CEBA on time.
Therefore, we call upon our government representatives and relevant authorities for compassion and understanding in this matter. We urge them to consider loan forgiveness for CEBA borrowers who continue facing financial difficulties despite their best efforts. By doing so, we can help ensure that our local economies remain vibrant while supporting those entrepreneurs who have been hit hardest by this crisis.

https://chng.it/VJ82wKQW2m

Salary, Dividends, Due to/from shareholder, Draw - What form of income should I take out?

Which is which?

Which is better?

One thing for sure, don't go for dividends unless you know what is going on.

Most business owners debate about taking salary, dividends, draw and so on.
In this episode, we talk about how much money to draw at a minimum in a form of salary 

What to watch our for making draws from the company and section 15 of Income Tax Act (ITA) 

Also what is your plan, do you plan to count on Canada Pension Plan? 

Eleven Tax Deductions Every Startup Should Know About Specially The Initial Investments

It is extremely important for start-ups, entrepreneurs and even business pros to keep track of their business expenses. These expenses will reduce your taxes when it comes to file your personal tax returns (t1) or corporate tax returns (T2).  When tax season starts the deductions will help and forms your strategic plans to perform tax planning, maximize tax deductions and minimize tax owing. So here are some categories that already exist. All you must do is take advantage of any or all of the following expenses that apply to your business.

Startup Costs

Startup costs are the initial costs that you have made.  Which includes:

• Incorporation fees,
• Franchise fees and purchase of an existing business or assets,
• Opening your business location,
• Market research and analysis,
• Business plans write ups,
• Marketing and advertising,
• Employee training,
• Professional fees, such as lawyers, accountants,
• Initial travel expenses
• Website development
• Assets roll-overs to the business
• Goodwill
• Home office expenses

SRED (read as SHRED) or SR&ED Scientific Research and Experimental Development Tax Credit

Accelerated CCA Calculations

Professional Fees

Home Office

Home office expenses include almost any of the physical costs of running an office, such as interest mortgage, property taxes, lease costs, utilities, office supplies, cleaning services and internet fees, home phone. However, there are specific rules for you home space to qualify as a legitimate home office. A home office must be a principal place for doing business and a site that you use on a regular basis.  To calculate the costs, for some it is very straight forward, for example if WIFI is used for the business significantly then it is 100% expensed however for others, what you need to do is measure the total area of your home and your office.  Obtain the percentage for home office, ie, 20% then 20% of your home costs can be expensed. One more note, create a habit of calculating these costs on a monthly basis and sending an expense report to your company/corporation and get reimbursed.  To make this easy for our clients, we have created an excel template which includes a lot of possible items that could potentially be used in the business. When they had the data, the spreadsheeted gives them the total and calculates the HST.  This practice also creates a great audit trail in case CRA is asking for details of home office expense.

Sub-contractor Costs

Software Subscription Fees

Any software subscription fees that you are using in your business can be written off. For instance, Microsoft, antivirus, QBO fees, Receipt bank fees, google G Suits, …

I suggest that you go through your credit card statements and flag fees that you are uncertain and tell us what the fees are for. We will have a look and can tell you if you can claim them or not.

Holiday Parties

Travel

Travels in relation to running, managing, and growing your business is considered tax deductible. I.e., driving to see your accountant, lawyers, marketing expert, going to the bank, post office, network parties, trade shows, seminars … you can also claim the miles you drive to meet clients and for other business purposes.

Marketing and Advertising

Banking and Interest Expenses

HST is a topic that many entrepreneurs are interested in learning more about, and it's confusing for them. Our host will talk about HST in this new episode of the Numetrica Accounting and Business Podcast.

What is HST?

HST is a service tax that we charge for our services and products. The number one thing you need to know is there's a threshold. If you ever go over $30,000 in your invoices or product sales, you have to charge HST. Whenever you're registered, you have no choice. Even if you make no sales, you have to report your HST. If you were a startup, you probably paid for some services that you needed to operate your business or open your business. You paid professionals like lawyers, accountants, and you bought equipment. You will get those HST back. The HST that you have paid out is the ITC portion.

If you had sent an invoice for $1000, there was $130 of HST. Before your sales were $1,000, your sales were $1130 because that 130 you are not eligible to either pay or collect becomes income—same with your expenses. You paid someone $1,000 for their service, and there was an HST on that. So before, your expense was $1000, but because you were not allowed to pay, your HST becomes $1130. It's extremely important in your business to pay attention to your HST, your payroll, and your business numbers.

Examination

What they need from you is your ten highest invoices, which you would send to them, your GL listing, that's the list of every HST that you've collected or paid. You get this from your accounting software, and when they review this, hopefully, everything is good, everything matches, everything ties in, they're all legit, so you get your refund.

Cash Flows

One of the things that I advise clients to set up a savings account. Most banks notice and call it a trust account because you want to park their money there. And the way CRA looks at HST, they would say this is not your money, and this is the money you're collecting on behalf of us. Many people look at that HST as I sent the bill for $1000 and I got $130 HST so my income is $1130. No, your income is $1000. That HST belongs to the federal government or provinces because HST means Harmonized Sales Tax. So the mixed GST and HST portions are provincial, and a portion of it is federal.

Register for HST

Whenever you register for HST, you get letters from CRA. They’ll say thank you for the registry, this is your HST, this is your filing period, and these are your codes. They give you four-digit codes, you put in the four-digit code, and you can file it.

HST could be “I just want to make a payment.” The other one is, I'm going to file my HST and I'd make a payment, or one of them would say, I want to make airier payments. The other one is GST payment only, and this basically means this is current, or you could even sit as installments. The other one is HST Return Payment. With this one, you can file and make payments. You probably get three pages of options because there are so many things that corporations can pay to CRA.

“Am I supposed to charge HST on this or not?”

You can call number 1-800-959-8287. An experienced CRA HST staff answers this, and they're very knowledgeable. You ask them a question; they give you the answer right away because they're the experts in HST.

Two methods for HST

There's the quick method of HST and the standard or accounting method of HST. Some companies should file on quick method, mostly IT consultants. On the quick method, it says, "I have a few small expenses, but I'm not going to calculate all of this HST." So the CRA will tell you that whatever HST you have is no longer eligible for an ITC. We get 88 percent of the HSC that you collect. You can only claim an ITC if you purchase a capital asset.

How to set up and file your HST and Payroll Source Deduction Via Bank 

HST Questions

HST for services provided to the US. 

US State Sales Tax From Canada
US State Sales Tax from your Canadian Shopify, Amazon, ...   

How and Why to Delegate

We all have heard, work on your business not in it. 

What does it mean? 

or Delegate. 

But how and why and which tasks. I'm the only one in the business. 

In this episode we look at a few philosophy from a few business titans:

Year-end checklist Corporate tax return checklist

Running a small business is no easy feat by any means. It requires daily effort, vision, and drive, among many other things. But one area where the mastery of small business finds most owners caught between a rock and a hard place is in the financial management of their operations. This area can affect every other facet of their business and make any normal person mad.

Learn how to earmark funds from your sales and deposit so that you can actually see where the profit goes, save money for taxes and payroll and pay your expenses. 

Here is a discussion with Kaitlin Kirk

How to save more time with QBO Time formerly T Sheets,

Simply, T sheets keeps track of employees work hours.

It has a few great features.

1) where and when the employee started working. This is great if you are sending your staff to different locations and you are not there to see when they started their work

2) Verify the employee. T-sheet kiosk can take a picture of the employee at the sign in time.

3) keeps track of lunch and breaks

4) keeps track of sick days

5) Keep track of hours worked by projects, so you know how much time you are spending on each client.
   On web, on application and time clock

6) Scheduling can be easily implemented in T-Sheets/QB Time

7) reports hours worked to QBO payroll after your approve them.

So forget about keeping track of working hours in paper or spreadsheet

If you have a few employees and each report their time by an hour of so difference, you are bleeding cash

example, 10 employee rounding their hours of work by 30 minutes per day. so 10 employees, 30 minutes = 300 minutes per day

25 days of work = 25 X 300 = 7,500 minutes 

7,500 divided by 60 = 125 hours per month 

125 hours X $20 = $2,500 per month
$30,000 per year

This will be saved plus all the hassle of keeping track of the hours. 

Save time, save money.