This is a sponsored post to help people with tax preparation Abbotsford BC from our friends at Numbers Unlimited.
Canadian tax legislation can be a little complicated, but the right bookkeeping or accounting service can work with you to help you make sure that you understand your rights and obligations, ensuring you are paying the right about tax, and certainly not more than you need to. Often families and small businesses think they can’t afford to work with an accountant but having someone who knows how to help make the tax system work for you can make a huge difference both personally and professionally.
Bookkeeper or Accountant?
It is not surprising that there is confusion as to what the exact difference between a bookkeeper and an accountant really is, as there is often much overlap between the roles. Often bookkeepers and accountants will also work together, as they do at Numbers Unlimited, to ensure a complete service is offered to clients with the most efficiency, most accuracy, and in the most cost-efficient manner. A good accountant should save you money, not cost you money.
A bookkeeper is generally responsible for ‘keeping the books’. That is, recording and reconciling day to day transactions. Often a business will have someone in-house to do the majority of the record keeping work in a spreadsheet or specialist accountant software, and at the end of each month, a bookkeeper will go through and ensure that everything balances, reconciles and is coded correctly. Then when the end of year tax return comes around these files are sent to an accountant who understands how to best interpret the financial data to create end of year reports for shareholders, personal tax summaries and file tax returns with the CRA.
Accountancy Needs in Abbotsford
Because of its proximity to the Canadian-American border, often businesses in Abbotsford need assistance with multicurrency transactions, international exchanges and tax laws as well as tax refunds that change because the originating transaction was in the United States.
How Can An Accountant Save Me Money?
Did you know that hiring an accountant, and the fees you pay an accountant are actually tax detectable expenses? How many other areas could you be claiming as a tax-deductible expense for your business? People in small and medium businesses don’t generally have a full-time tax law specialist on staff, which means they are often missing out on vital information about what they can claim against on their end of year tax returns.
Each business type has a unique set of expenses that are legitimate deductions. A hairdresser might be able to claim the hairstyle magazines that not only keep them up to date with the latest trends but also aid their clients in getting the haircut and style they desire. While a building contractor likely knows they can claim their tools, are they able to claim their portable radio that all tradespeople have or their first aid kit?
It is not only in knowing the tax law around deductions that can save you money. Obviously not facing penalties from filing incorrect returns or late returns is a saving. However, a good accountant will also be able to sit with you and work out the best way to structure your business. Whether you are a sole trader working with a casual staff member as needed, or a registered corporate entity that has several employees, how you structure your business can make a difference to what type of taxes you pay and how you need to pay them.
Another area that an accountant can advise you on is your cashflow. While most small businesses, particularly when they are starting up, try to keep expenses to a minimum, sometimes the old adage “you need to spend money to make money” is true, however, where does that money come from? If you speak to a qualified accountant who knows your area and your industry that will be able to offer insights in where to go to increase your business to the next level. Or how to ensure that your business continues to flourish when times are more difficult.
The Canadian Revenue Association requires that all businesses keep financial records for at least six years. This includes all receipts (both paper and electronic), all records of your expenses, all records of your sales, any taxes that you have paid (or collected) and details of your staff payroll. https://canadabusiness.ca/managing-your-business/day-to-day-operations/managing-your-finances/bookkeeping-and-accounting/
You may be relying on your email to keep an archive of your electronic receipts – but how often have you backed this up? This isn’t part of the role of an accountant, but they will likely remind you that you need to ensure your records are kept safe, and if you’re not backing up your servers will probably suggest, very strongly, that you start now.
Single, Double, Receivable, Payable
One of the big reasons to talk to an accountant as soon as you can is to ensure that you understand your obligations, but to also ensure that you understand the terms and processes. You don’t really need to know the difference between single-entry bookkeeping and double-entry bookkeeping. However, you do need to understand how you are recording your transactions and that you are doing so in a way that the accountant will be able to translate into a useful end of year report. If the accountant has to go through a pile of receipts and transactions that have been recorded in multiple ways depending on your mood you will end up with a very large bill that there really is no need for.
Likewise, mixing up your accounts payable and accounts receivable is probably one of the most common reconciliation errors (next to the misplaced decimal point). Talking to you bookkeeper should help make sure that you have systems in place to make the whole accounting system run smoothly for you.
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