Up-to-date bookkeeping can also help you to identify your accounts receivable and your accounts payable. It can also provide you with information about the PST, GST, and income taxes that your business might owe. Bookkeeping can help you to see how much money your business has on hand and to project the amount of money that it will need over the next quarter or year.
Bookkeeping helps you to stay in compliance with the requirements of the CRA. When your bookkeeping is accurate, you can avoid late penalties and reduce the likelihood that your business will be audited. Finally, up-to-date and accurate bookkeeping can help your business to obtain financing if it is needed.
The next step you should take is to determine the level of bookkeeping that you need. Your choices include the following:
Our financial professionals can help you to figure out the features and functionality of your bookkeeping services that will work the best for your business. You will need to understand what it is that you want to get from your bookkeeping system.
When you categorize your transactions, you should make it simple. Keeping your categories simple will make your financial reports much easier for you to read. The most common categories that businesses use include the following:
Under the Income Tax Act, you are generally allowed to deduct the reasonable current expenses that you incur to earn income through your business. By contrast, capital expenses are deducted over a period of years since they provide benefits that last for more than one year. Current expenses are expenses that recur after a shorter time. An example of a current expense would be the cost of your telephone bill. The current expenses must also be incurred to help your business to earn income and must be reasonable.
Certain expenses have specific rules and exceptions that apply. For meals and entertainment costs that are incurred for business reasons, they are only deductible at 50%. You should also track the business purpose of this type of expense and who you ate with or entertained.
For vehicles, you are allowed to deduct expenses that you have to operate a motor vehicle that is used to earn income for your business. Personal use of the vehicle cannot be deducted.
If you have a home-based business, you are allowed to deduct the expenses that are related to your home office as long as the room or space is your principal place of business and you only use it to earn income for your business. If your home office qualifies, you can deduct a percentage of your property taxes, utility costs, mortgage interest, and maintenance costs.
Whether you choose to do bookkeeping for your business on your own or to hire a professional, it has to be completed. If you fail to perform bookkeeping, you will be operating your company in the dark and will likely encounter problems when it is time to file your corporate income tax return.
While some business owners choose to perform their bookkeeping themselves, doing so may not be a good idea. Performing your bookkeeping will take a lot of time that you may not have to devote to your books. Outsourcing your bookkeeping allows you to attend to your business operations while helping to ensure that your books are up-to-date and accurate. Outsourcing is also less costly than hiring a dedicated bookkeeper to work in-house at your company.
Outsourcing your company’s small business bookkeeping will cost more than completing it yourself. However, it can free up your time so that you can work to help your business grow. Professional accountants and bookkeepers also have the training and expertise that are needed to ensure the accuracy of your books and financial reports, making it a better option for many businesses.
Hiring a bookkeeper to work as one of your employees will cost the most out of your options. You will need to pay a fair wage. If your bookkeeper will work full time, you will also need to figure in the cost of benefits. An internal bookkeeper might need training. After you have spent money to get the training that your bookkeeper needs, he or she might leave for a different job and cause added costs.
Some business owners that have attempted to complete the bookkeeping on their own may have books that are woefully inaccurate or incomplete.
When this occurs, the businesses need to get help with bookkeeping cleanup. Our financial professionals have the expertise needed to help your company to clean up your books so that they will be accurate and up-to-date.
Bookkeeping in Vancouver, just like many other places, is a headache for many small business owners. When you run a small business, you may have substantial time constraints and simply not have enough time to perform your bookkeeping. You also may not have the training that you need to perform bookkeeping on your own without making mistakes. By partnering with us, you can feel confident that your books will be up-to-date and accurate.
You can also derive benefits from the financial reports that we provide. Contact us today to schedule a consultation so that you can learn more about how our bookkeeping services in Vancouver can help your company.
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