Business Consulting

Negotiating and signing your commercial lease can be a substantial investment for your business. It’s critical that you’re aware of what you are committing to. While it’s tempting to save the professional fees on this process, a poorly written lease can end up costing you thousands more in the end.

The Accountant Perspective Can Help You When Negotiating Your Commercial Lease

Most commercial rental agreements are written so that you pay a base amount for the area plus a percentage of the occupancy costs of the building. These occupancy costs can include property taxes, insurance, repairs and maintenance, management fees, etc. It is this occupancy cost portion that can present your greatest financial risk.

1. Beware Management Fees

It’s normal to see some sort of management fee included in your occupancy costs.

What would be a fair fee to charge you based on the services that they provide by collecting your rents and ensuring that the building is safe and in good repair?

I’d suggest having the formula for these management fees spelled out in your lease. This formula would depend on the level of service that your landlord provides. Ideally, this formula would be based on a percentage of base rents that you pay. Simply stating that you will pay for management fees means that your landlord can pick any number they like and add it to your invoice.

2. Building Improvements VS Repairs

Does the occupancy cost section detail what is considered a building improvement vs basic repairs and maintenance?

Yes, it is reasonable that you pay for cleaning, snow removal, some light bulbs in common areas, and other reasonable maintenance costs. If your landlord decides to upgrade from commercial-grade carpet to marble tile, will you be responsible for paying for it?

Review this wording very carefully.

I think of my mechanic client that was looking to rent a condo bay. I reviewed his draft lease that would have put the tenant open to the liability of paying their portion of the Taj Mahal if the landlord chose to renovate.

3. Rights to Review the Details

Make sure that you have the right to request the details of what your landlord is charging you. I’ve encountered many horror stories where a landlord will pay service fees to their various relatives at a rate far more than the fair market value for the task. Picture paying $6,000 for someone’s child to plant a dozen petunias. Let it be known that you’re onto that game and won’t be paying for it.

1. Evaluate your business needs

Do a little homework before negotiating a lease. List your company’s current and expected future space needs, and determine your budget and preferred location.

“Ask yourself what you want to get out of moving,” Prikker says. “You can then negotiate a lease that covers everything off.” If you’re uncertain about near-term needs, consider a shorter lease (for example, two or three years). “You may pay more per square foot for a shorter lease, but at least you can walk away more easily if you need to,” Prikker says.

Source: bdc.ca

4. Review Your Rental Space

Believe it or not, landlords don’t always have an accurate handle on how much space they are renting to you. This is particularly true in larger high-rises or older buildings that have seen many renovations.

When is the last time that space had been measured or certified?

5. Personal Guarantees

Avoid them if you can. If you’re new to business your landlord may insist on you signing a personal guarantee. If this is required, ensure that this guarantee has a limit. Ensure that there is a clear maximum that you can be liable for. When you negotiate a commercial lease renewal after the first term, have them remove this personal guarantee.

6. Do Not Assume Your Landlord is Right

Your landlord likely does not have an accounting background. The people preparing your occupancy cost statement at the end of the year may or may not actually know what they are doing. They may or may not be preparing that statement in accordance with your lease. I found a prime example of this earlier in the year. The annual occupancy cost statement arrived in the form of a bill with $60 additional fees owing. Upon inspection, they were charging an incorrect management fee and the leasable area was overstated. The true result was a $3600 refund of the monthly occupancy costs paid. Examine your statement and compare it to your lease.

How to Negotiate Commercial Leases That Favor Tenants

If a landlord or leasing agent simply tells you the terms, ask for something showing the terms in writing before you submit a counteroffer. If they are reluctant to offer a letter, ask for an email or a copy of the listing for space (which will contain at least the basic leasing information).

Why is it so important to have initial terms in writing? A leasing agent acts on behalf of the interests of the landlord. If an agent either misunderstood or attempted in any way to alter the landlord’s directions, having terms in writing can show you a landlord that your counteroffer was made in good faith based on information from the leasing agent.

It is also possible that you could misunderstand lease terms if they are not in writing. This could lead you to counter too high or too low based on the information you misunderstood.

Another reason to have the terms in writing is that it allows you time to research more about the lease, to ask an attorney about the terms, or even to compare terms to any other leases you are considering.

Asking for terms in writing is not in any way a legal commitment on your part to move forward. You always have the option of countering the terms or simply turning them down outright.

Source: thebalancesmb.com

The horror stories are endless. Have your lawyer and accountant review your draft lease to make sure you are fully aware of what you are signing. Remember to protect your interests while negotiating your commercial lease!

Covid Holiday Parties

How does Covid-19 Impact Your Company Holiday Plans?

December 2020 corporate celebrations will be drastically different than previous years. Would you typically host a party for your staff and their spouses?

These types of events are either going to be:

1. Illegal due to size restrictions, or
2. Not a wise business decision if your entire staff end up in quarantine because of exposure.

I believe that holiday celebrations (in some form) help contribute to the culture of your organization. These events help your staff to feel appreciated and offer an opportunity to create bonds (aka loyalty) to others in the group. If you needed another reason, holiday staff parties are 100% deductible for tax purposes. Canada Revenue Agency permits up to six of these 100% deductible events annually where all staff are invited. Normally, meals and entertainment are only 50% deductible for tax purposes.

If you can’t meet in person in the tradition sense, what are your options? It’s time to get creative. Here are some of my favorite ideas:

Virtual tasting experiences
There is a chocolatier in Edmonton that will deliver their product to you at home and then lead a private online tasting event for small groups. Several local businesses are offering such services for their products.

Skip the Dishes/online gaming
Have dinner delivered to your employees’ home and host a Jackbox party.

Online cooking classes
The ingredients and recipes are delivered to your employees’ home and the culinary instructor leads an interactive online cooking class. This could be a fun “date night” for your employee and their spouse.

Socially distanced experiences
Some hotels/restaurants are getting creative with offering Covid-19 friendly activities. While you still need to follow local Covid-19 protocols, one particular hotel I know of is offering a package that includes a three course meal (a separate table for each couple), dancing lessons (participants keep in their designated square in the ballroom), and a night at the hotel. With travel restrictions still tight, hotels are suffering and would probably be open to suggestions if you came up with a similar idea for a private function. I think that these types of events will become more common with people craving a unique staycation.

The holiday season is fast approaching. With 2020 providing us ample opportunity for re-evaluating our values and priorities, have your corporate holiday plans changed? What are your plans for gifting to your employees?

Here are the rules:

  • Canada Revenue Agency allows you to give your employees gifts costing up to $500 annually without tax consequence to your employee. This could include a birthday gift, a gift for the birth of a child, holiday season, etc. It’s worth noting that small items such as coffee mugs, the clothing with your company logo on it, coffee and tea don’t count toward this $500 total. If your gifting exceeds the $500 limit, the overage is a taxable benefit to your employee. A $700 annual gift would result in a $200 taxable benefit for your employee.
  • Cash and gift certificates are considered to be a form of compensation that results in a taxable benefit to your employee. While our employees may enjoy the freedom of cash stuffed in a Christmas card, they would likely prefer if they didn’t have to pay tax on a gift. With gifting cash, there is the added possibility of a denied deduction as there is zero proof of where the cash went.
  • Event tickets or vouchers qualify as non-taxable benefits as they are redeemable for a specific thing. For example, a voucher that entitles you to a Widget at XYZ Store doesn’t offer much choice to the recipient and therefore qualifies as a gift. Now that we know the parameters, the big challenge is to come up with thoughtful, creative and non-taxable gift ideas. Think about what your employees stress about. What gift can make their lives just a little bit better?

Meal subscriptions
Let’s be honest. Deciding what to have for dinner is the absolute worst part of adulting. Imagine taking a bag of ingredients out of the fridge and simply following the step by step recipe to create a decent meal. THIS is far more relaxing to me than a spa treatment. We’re talking ONGOING stress relieve here!

House cleaning service voucher
This one speaks for itself.

Online cooking class/or tasting experience voucher
Many folks are craving “date night” with their significant other. With Covid-19 restrictions (travel, social outings), many couples are struggling to find opportunities to reconnect. Here is a great Covid-19 protocol compliant date night.

Subscription to a (cool product) of the month club
People like receiving mail that isn’t a bill. It’s a gift that keeps on giving!

Support local
Check out some locally crafted gifts/experiences. Support a small to medium business in your own back yard. The Greater Edmonton Area has some fantastic:

  • Craft Breweries
  • Distilleries
  • Chocolatiers
  • Ciders
  • Cookies
  • Jewelers and crafters
  • Woodworkers
  • Artists
  • Olive oils, sauces, spice blend merchants
  • Soaps and lotions
  • Many many more.

If you’re struggling to come up with a brilliant idea, you could always ask your employees for input. Small to medium business owner-operators often know their employees really well. If this is the case, ask them what they’d like. Perhaps you could give them a budget and a catalog/website to peruse. This would take some of the gifting stress off of your shoulders; the employee receives a non-taxable gift that they actually want and you get a deduction for tax purposes. Win, win, and win.

Taxable versus non-taxable benefits can be difficult to sort out. If you have got any questions about how to show your appreciation to your staff, feel free to reach out. We’re always happy to help!

The COVID-19 pandemic and resulting lockdowns have brought on a huge shift for people to work from home. Several business leaders have determined that having employees work from home is entirely possible and a great way to reduce overhead costs. Why would you force your employees to drive across town and sit in an office when they are just as productive (if not more) in their own homes? This trend has impacted our household. My husband’s automotive expenses are a fraction of what they were a year ago. On the other hand, our utilities, unlimited highest speed internet requirements, toilet paper and coffee costs have increased substantially. How does this trend impact your tax filing obligations?

Information for Employers:

If you have required your employees to work from home at least 50% of the time, they can claim some of their home office expenses on their personal tax returns. When you hand out your employees T4s, provide a completed T2200 Declaration of Conditions of Employment form. Indicate on the appropriate sections that the employee was required to work from home.

Based on the size of their home office, your employees will be able to claim a percentage of their expenses. This percentage is calculated by dividing the workspace area by the total finished area of the home. Expenses to track include: Utilities (heat, electrical, water), and maintenance (cleaning supplies, paint, plumbing, etc.) and rents. If your employee is paid commissions, they may also claim their insurance and property taxes. If home office specific expenses are incurred (fax line, increased internet capacities, office space only maintenance), the entire expense may be deductible. For example, if your household normally spent $50 per month on internet and now you spend $150 so that your ZOOM calls don’t freeze, one could argue that the $100 extra should be deductible. Similarly, if you revamped a spare room to create an office oasis (paint, shelves) you may (within reason) claim 100% of these costs.

Ensure that your employees are aware that employment expenses are often reviewed by Canada Revenue Agency. Encourage your team to keep their receipts/invoices/statements to be able to prove their claims.

Information for Business Owners:

Whether you are incorporated or a proprietor, you may also claim some home office expenses. The portion claimable is calculated in the same manner as for employees (office space divided by total finished area of your home). In calculating this percentage, it’s tempting to say that a significant portion of the home is used for business purposes. As a general rule, it’s best to keep the percentage around 10%. Any more than that and Canada Revenue Agency can argue that your home was a revenue generating property and you put your Principal Residence Exemption at risk… meaning tax implications on any gains when you sell your house. Also note that if you rent a secure commercial space, you likely cannot claim your office as well.

Keep track of your rents, heat, electricity, insurance, mortgage interest, property taxes, security monitoring fees, and maintenance costs. You can claim the calculated portion of those expenses. Consider office specific costs: the portion of internet required for the smooth running of your business, a fax line, office décor, desk, shelves, chair, chair mat, WIFI booster, etc. These office specific costs may be considered 100% for business purposes and expensed accordingly. Larger items such as furniture, computer, printers, and other office equipment would be expensed over a period of time via Capital Cost Allowance.

Ensure that your claims are reasonable and justifiable. Would it pass the sniff test for Canada Revenue Agency? Was it an expense incurred to earn business income? I think my favorite COVID-19 home office question so far has got to be: With the shortage of toilet paper, do you think I can justify expensing the entire cost of the bidet seat for my toilet? This client won tons of points for creativity and making me laugh out loud during a particularly stressful time in the accounting world. My advice: I would stick to the 10% household repairs and maintenance write off on this one.

If you have any specific questions or concerns about home office expenses for either your employees or yourself as a business owner, I’m always happy to chat. Send me a message at angela@rmllp.ca.

We’re still open and here to help.  We are just not taking face to face meetings.  We can do a lot via email and our secure online portal.

With the extended tax deadline, we’d encourage people NOT to wait to get their personal taxes done.  Most families are getting refunds due to the Climate Action Incentive rebate.  That money is worth a lot more in YOUR pocket.  ***I seriously got to call a client (who has been hit hard as of late) to inform them of a $10K family tax refund… I’m pretty certain they are happy to have filed sooner rather than later***

Stay up to date

The latest information from Canada Revenue Agency is available at www.canada.ca

If you haven’t already signed up for My Account with CRA, do so as soon as possible.  This will be the best avenue to apply for EI benefits and notifying CRA of any changes to your situation.  It will not be easy to get through to a CRA agent by phone any time soon.

Available to businesses

 

What constitutes a business expense?

I get this question ALL the time from my business clients.

As a general rule, expenses must be incurred with the purpose of earning business income. The expenses must be reasonable and justifiable. I’ve compiled a list of the more common expense questions with the answers to perhaps paint a clearer picture.

Are haircuts a business expense?

This is a solid NO.

Personal grooming costs are not deductible… even though you may have to look presentable and professional to meet with customers and clients. Let’s be honest, almost everyone who is working with the general public should be somewhat groomed. This is a human thing—not a business expense.

What about clothing?

Canada Revenue has a stance that unless the clothing is considered a uniform, it is not deductible. A loose definition of a uniform is something that a normal person would not wear to a mall. (I purposely did not mention Walmart here). This means that your business suits are not deductible. There are occasions where clothing may be permitted as an expense.

  1. Clothing that is specifically required safety gear is a reasonable and justifiable deduction.
  2. Clothing that contains your logo for advertising purposes would also be considered deductible.

Go ahead and order your next golf shirt, jacket or hoodie from a promotional supply store and be a walking billboard (I personally think this would be hilarious if you had a numbered company with no real logo).

Is a home office a business expense?

If you are working out of your home, yes, a portion of the expenses can be expensed. If you are paying rent at an official business location (or own the space), you likely cannot also deduct for your home office. If you are expensing a portion of your home for business purposes, do be careful not to be too aggressive with those claims.

I’d be hesitant to claim more than 10% of your homes’ costs (mortgage interest, property taxes, repairs and maintenance, utilities, insurance, security system, etc.).

If you’re claiming more, Canada Revenue Agency deny a portion of your principal residence exemption when you go and sell your home. In other words, if you claim 40% of your home expenses for your business, CRA would argue that 40% of your home was for not for personal use and therefore, you’d have to report 40% of any gains on sale as income on your taxes.

How are telephones a business expense?

If you still have a landline in your home, you cannot deduct this for business purposes… just the specific charges for any long-distance calls related to business. Your business cell phone can be deductible. Communicate with your cell phone provider that you have a business as certain carriers have special pricing for business owners.

What about conferences?

Here is a brilliant way to make your next trip to Vegas a business expense! Find a conference that is somewhat relevant to your business operations. You can deduct up to two conferences per year.

Paying your children or spouse a wage.

This one boils down to the expense has to be reasonable and justifiable.

  1. Can you pay your 3 year old $10,000 a year for sweeping out the garage?
    • No. This is not reasonable.
  2. Can you pay your husband $150,000 per year for sorting receipts?
    • Likely no—because you wouldn’t pay someone you weren’t related to that kind of amount.
  3. Can you pay your teen minimum wage for sweeping out your shop? Or pay your spouse fair market value for administrative work?
    • Yes. This would probably be considered reasonable.

Keep a detailed timesheet to document and justify the expense…just as you would to any other employee that wasn’t closely related to you or sharing your bed.

How do meals and entertainment factor into business expenses?

Yes, these are deductible expenses… but don’t go too crazy.

  • Go for lunch with that potential referral partner.
  • Buy a coffee for the potential new client.
  • Take the staff out to celebrate completing a major project.
  • Order dinner in house when key staff are staying late to get the job done.

Don’t try and expense every single meal you eat through your company. Similarly, your personal groceries are not deductible. Again, these expenses need to be reasonable and justifiable.

For example, an oilfield contractor would have a tough time justifying how Oilers season tickets were a legit expense to earn business income. On the other hand, if you typically dealt with many customers and relied on referrals, perhaps you could deduct some of those hockey tickets because you gave them to clients or associates as a thank you for referring new business. Documentation is key in this case. Who got the ticket and why?

Every business is unique. If you have specific questions of what types of expenses would be considered reasonable and justifiable for your operations, feel free to contact us.

Choosing the right account is important.

In a previous article, I discussed what CPA means and why it is important to choose an accountant with the CPA designation. Now I want to talk about other considerations when choosing an CPA that is the right fit for you or your company.

Does your accountant have relevant experience?

First, I would like to talk about experience.

  • How long have they been working in public practice?
  • Have they been around for many years or did they just decide to open up shop one day and may be gone the next?
  • What about the type of clients and industry they have past or current experience with?

When meeting with a potential new accountant, you should feel free to ask how long they have been in practice. You should also ask about their existing client base to find comfort that they have experience in your industry.

What is the accountant’s availability and communication like?

Another important consideration is availability.

  • Does your accountant return your phone calls and emails in a timely manner?
  • Do they have a partner or staff that can assist you with urgent matters if they are on holidays?

It is imperative to know that if something unforeseeable happens that prevents your accountant from continuing their practice that there is someone available to assist you.

Does the accountant have a strong professional network?

It can be beneficial to clients when an accountant has a team of people that they can rely on to take care of the needs of their clients.

  • What about their contact sphere?
  • Do they have other professionals they trust and work with regularly that you may also need?
  • If you find yourself in need of a new bookkeeper or a corporate lawyer, does your accountant have connections that may help you?

Are you comfortable discussing hard topics with the accountant?

Now let’s discuss comfort level.

You only need to talk to your accountant once a year so it doesn’t matter if you like them and feel comfortable with them, right? Wrong!

Your accountant should know all your confidential financial information and you should be comfortable to discuss this with them. The more your accountant knows about you, the more likely they will be able ensure that you are utilizing all the tax credits and deductions available to you. The more comfortable you are with your accountant, the more likely you also are to ask questions if you do not understand something.

It is important for a taxpayer to have some basic understanding of their financial statements and income tax return.

The partners of Richardson Miller LLP Chartered Professional Accountants have a combined 35 years of experience in public practice in several different industries. Our clients are important to us and we pride ourselves in our client relationships. We know that the world of tax is complex and confusing, so we aim to educate our clients in a way that is understandable and relevant to them.

CPA makes a difference in your protection

Have you ever looked for an accounting firm and been overwhelmed by the number of businesses to choose from? Have you ever noticed some of these companies are Chartered Professional Accountants and some are not? What does Chartered Professional Accountant, or CPA, even mean?

Let us help shed some light on this.

Chartered Professional Accountants Association aka CPA

The Chartered Professional Accountants Association is a professional regulatory body that focuses on protecting the public. What does CPA stand for? When an accountant has CPA after their name that means they have completed:

  • a university degree (or equivalent);
  • a couple of years of practical work experience;
  • and professional level exams in order to receive the CPA designation.

An ongoing 40 hours a year of professional development is required to maintain the CPA letters. The Association protects the public by ensuring its members meet their high professional and ethical standards and they continue to monitor CPA firms to ensure ongoing competency.

Who is regulating the non-CPA firm to ensure they are qualified as well?

Unfortunately, in Alberta, there is no law to prevent anyone from calling themselves an “accountant”. It is the old “buyer beware”; if there is no CPA in the firm name or behind the accountant’s name, there is no one regulating the work being performed.

If the strict monitoring of a CPA firm isn’t enough to help you make a choice, you should also consider current and future financing. Depending on the level of financing, financial institutions may require a company’s financial statements to be prepared by Chartered Professional Accountant.

Check out the CPA Alberta website for more information on protecting the public or to verify that an accountant, or a firm, is registered with the CPA Alberta Association.

Profit and Loss Statements Don’t Tell The Whole Story

Your profit and loss statement showing you positive numbers. Yet you are struggling to find the cash to pay your bills on time. Or perhaps your sales volume has increased but you have less cash than ever? Sound familiar? Cashflow (defined as the net amount of cash being transferred in and out of a business) can make or break a profitable business. Poor cash flow can cripple a businesses ability to increase sales volume or if prolonged, can result in bankruptcy.

How to Improve Cashflow

  1. Get Paid Faster. It doesn’t matter how high your revenues are if your customers don’t pay you. Check out the article for some tips on how to speed up the collection process.
  2. Structure loan repayment terms appropriately. Are you trying to aggressively pay off that equipment loan in only a year or two? Talk to your accountant and banker about appropriately structuring that debt over the useful life of the asset.
  3. Take advantage of free credit. Are you paying your bills as soon as they arrive in the mail? Try waiting until the date that the payment is due or negotiate longer payment terms.
  4. Monitor inventory. Keep inventory at a reasonable level for your business. Several months’ worth of product sitting in your warehouse isn’t going to help when your checks start bouncing.
  5. Monitor overhead costs. Every little bit helps. Take the time to carefully review your subscription costs, telephone bills, vendors. Are you paying for things that you no longer need? Are there opportunities to negotiate a better deal?

How NOT to improve Cashflow

  1. Postpone filing and paying your source deductions with Canada Revenue Agency. The penalties and interest are not deductible for tax purposes and can add up in a real hurry. Continual late payments can also get you flagged for a payroll audit.
  2. Postpone filing and paying your GST/HST. Similar to your payroll, Canada Revenue Agency gets pretty cranky when these payments are late. Not paying GST on time is a great way to get your bank accounts seized.

Cashflow Analysis

Have you ever analyzed your cash flow?

A full analysis can be an eye-opening experience to realize the health… or the limitations of your current business operations.

Can You Afford to Grow Your Business?
  • Does your business incur direct costs prior to receiving payment from customers?
  • When are you required to pay your vendors/employees?
  • Compare this timeline to when you typically receive payment from your customers. How long are you required to finance your sales?

This gap between paying for costs and receiving money from your customers is referred to as your working capital days. The greater your working capital days, the greater your requirement to finance when you increase your revenues.

Do you know how many working capital days you’re currently financing in a line of credit? How much financing is required to grow your sales volume by $100? A detailed professional analysis can provide insight.

Example:

Picture a trucking company in Alberta. The typical customer tends to pay within 65 days from the invoice date. The company must pay its employees at the end of the month. During busy times, management relies on subcontract drivers who also demand payment by month-end. The company must also pay for fuel, repairs and various other costs within a timely basis. On average, the company must pay its’ costs within 25 days.

Based on current operations, this company must finance the costs of their sales for a full 40 days before receiving payment. The company relies on lines of credit and reserve savings to finance these sales. When sales volume increases, a larger line of credit is required. Consider additional costs associated with grown (equipment, staffing, etc.) combined with a larger line of credit. At a certain sales level, if cash flow is not carefully monitored, the company may simply not be able to obtain enough financing to grow.

The Power of One

The power of one (as part of a professional cash flow analysis) can be a useful tool in truly realizing the impact of minor changes in your business operations.

What would your cash balance/income/value of the business be if you:

  • Collected your accounts receivables just one day sooner
  • Paid vendors just one day later
  • Increased your sales volume by 1%
  • Increased your prices by 1%
  • Decreased your cost of sales by 1%
  • Decreased the cost of your overhead by 1%

These tiny amounts can equate to significant differences in the health of an organization. Perhaps that line of credit could turn into a positive cash balance. Quite often, this illustration can aid in management decision making.

Sometimes that decision is: We can’t afford not to hire extra office staff to help us keep on top of invoicing and collections.

Call me to discuss how a professional cash flow analysis can benefit your company.

New Entrepreneur Check List:

  • Brilliant idea?  Check.
  • Endless passion?  Check.
  • Supernatural ambition?  Check.
  • Nerves of steel?  Check.
  • A clear vision of success?  Check.
  • An accountant?  …. WHAT? WHY? …I haven’t made any money yet.  Why do I need to worry about accounting?

That is a fantastic question.

You don’t know what you don’t know.  When you don’t know what you don’t know, it’s easy to overthink the unknown.

Does it make sense to incorporate?  How do I incorporate? Do I need to register for GST?  Payroll vs Dividends? What can I deduct? How do I track my information?  When do corporate taxes need to be filed? Paid? How much to save for tax and GST?  Who should own shares in the corporation?

At this point, new entrepreneurs will generally do one of the following:

  1. Spend countless hours online trying to find information.
    There are endless sources of information online. Is it true?  Is it understandable? Is it relevant? How much time was spent researching stuff that you really don’t care about?
  2. Procrastinate.
    It’s easy to become overwhelmed at the thought of all those questions and vow to deal with it soon… very soon… next month for sure. Ignoring Canada Revenue Agency and it’s various filing requirements rarely ends well.  Consequences can range from penalties and interest to CRA seizing your bank accounts. It’s difficult to run a business when CRA strips your bank account of every penny each time you make a deposit.
  3. Ask friends and relatives. I can’t tell you how many times I’ve heard my clients say, “But my neighbour said I could claim all of my personal grooming expense in my business because I have to look presentable and presentable”.Or “My brother in law says he claims______________ ***insert ridiculous personal expenses here***_______”   All is well and good until there is an audit. At this point, you’re dead in the water.

Bringing an accountant from day 1 can:

Save you time.

  • More time to focus on your business—and less time is taken away from your family and loved ones.

Save Money.

  • Procrastination can be extremely expensive in late penalties
  • Also, save by coming up with a tax plan custom to YOUR business and personal situation
  • Perhaps there are certain elections you’d qualify for… or grants

Gain knowledge.

  •  An accountant can offer a bird’s eye view on your business idea.  What haven’t you thought about? Insurance? Financing? Are you partnering up with someone without a unanimous shareholder agreement?  What sorts of things can you deduct as it pertains to YOUR industry?

Assist in creating a strategic plan.  

  • Should you incorporate?  If incorporation is a logical choice, when should you incorporate?  Perhaps you’d be better off operating as a proprietor for a year or two first.  What would be an appropriate corporate fiscal year end date? People assume that December 31 is the obvious choice for a fiscal year-end.  The reality is, you can choose any date for a year-end and a non-December year end allows for so much more flexibility in tax planning.
  • When are the various government filings due?  Avoid surprises and prepare in advance.
  • How are you going to maintain your records?  Can you manage the documents yourself?  What tools/software and applications are available?  Do you need to hire a bookkeeper? What documents should be kept and for how long?  What are your options for the organization?
  • How are you going to pay yourself?  How much do you need to set aside for tax?
  • How are you going to manage your cash flow?  An accountant can assist with some strategies to make sure there is money in the bank.

Gain Peace of Mind:  – carry on your first year KNOWING that you’ve got a plan of action.

If you have questions about getting started, comment below or contact us.