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7 Serious Tips for Better Bookkeeping in Canada

Bookkeeping is tedious for most business owners unless you are a seasoned accountant or a fan of working with numbers. That is because businesses have a lot of financial details that need to be recorded, for instance, which supplier should be paid, outstanding customers, equipment to buy, significant purchases to make, and more. Without an accounting and bookkeeping system, you may lose essential business data, miss important goals, or make uninformed decisions that may affect your company’s finances.

Proper money-handling strategies are integral in any business as it helps you keep track of your long-term goals, improve your profits, and streamline seasonal cash flow changes. In addition, it will help your business stay out of trouble with the Internal Revenue Service or IRS.

By adopting good bookkeeping habits, you can avoid costly errors when it comes to record keeping. You can opt to have an in-house team to handle all your bookkeeping services, but this can be un-economical for small business owners. To save on cost, you can work with a bookkeeping agency, which often offers professional online and virtual services in Canada at very fair rates.

Here are seven tips for better bookkeeping for businesses in Canada.

Separate Your Business and Personal Finances

If you are a sole business owner, you should learn to separate your personal and business accounts. This will help you maintain records of every business and personal spending and help you keep the boundary to alleviate eating into the business growth finances.

For limited liability companies, the business is a separate entity from you, and your finances should be kept separate. That means you need to know which assets belong to the business and which are yours. By eliminating all personal transactions from the business accounts, you will lower the number of transactions the bookkeeper needs to categorize and reconcile. Additionally, your tax preparation and filing process will be seamless. You can find a bookkeeper in Canada to help you separate your accounts and provide outsourced business and personal bookkeeping services.

Control Your Business Credit

One of the common signs of an insolvent business is the inability to make payments promptly. The company may need better credit scores, lack of funding, or challenges in fulfilling its working capital needs.

When your business depends on bank financing to fund everyday operations, you will need help to pay back your high-interest debt. Therefore, you need to do due diligence before taking external funding.

You should set strict deadlines for your clients to pay what they owe and consider blocklisting repeat offenders that are taking advantage of you. Eliminate any late payments, as it is just like an interest-free loan. Your business may quickly become a cash-flow crisis if you lack rigorous credit control.

Track Business Expenses

Business expenses may be claimed against tax; therefore, tracking them is crucial if you want to cut overhead and maintain a healthy cash flow. You should always use a business credit card and keep records of expenses based on business activity.

Categorizing your expenses can be crucial, especially when your business is undergoing an CRA audit. The numbers on tax returns are often estimates, and these records help offer supporting evidence. Always remember that even trivial expenses will add up, and having records of everything can be helpful in the long run.

Overspending negatively affects any business; hence, keeping track of your expenses will ensure you track all your expenditures. Always remember that every dollar that you spend takes the business one step away from making a profit. Therefore, when running a business, keep a close watch on all your expenses, understand the benefit you gain from each expense, and document everything carefully. With outsourced online bookkeeping services, you can keep track of all your business expenses and maintain good records.

Schedule Routine Bookkeeping Times

As a business owner, you are handling many things at once, which can eat into the time you can use to monitor your financial record books.

The best way to keep your accounts is by consistently scheduling times to balance your books or working with a bookkeeping company in Canada. You can set aside time when your credit card statement is due and check through your monthly transactions to ensure everything is accurate. Although this task will take about one or two hours, it will simplify your life during the tax season by making tax preparation and filing much more effortless.

Create Budgets For Your Expenses And Set Financial Goals

Planning for business expenses, especially significant purchases, can help you best utilize your business resources and credit while giving you the peace of mind you need. Setting up and reviewing business budgets is directly related to the success of your business.

According to research, small businesses that regularly review their budgets on a weekly, monthly, and annual basis have success rates of 95%, 75%, and 25%, respectively. Therefore, if you want your business to succeed, you must have relatively high unused credit balances. In addition, you should also ensure your budget is monitored regularly, understand the benefits of using credit for your company, and be able to earmark the right amount of business payroll expenses.

Automate Manual Processes

One of the best accounting tips for growing businesses and start-ups is automating routine bookkeeping. Most accounting and bookkeeping activities are repetitive, and automating them will make your work easier and seamless.

Some repetitive bookkeeping processes you can automate include paying employees’ salaries monthly, following up on late invoices, and tracking invoices you send to customers. In addition, you can also automate the calculation of mileage payments for employee reimbursements and document utility bills in a central database.

Business owners can make life much easier by utilizing unified accounting project management solutions to help track expenses, automatically send invoices, and generate customized reports.

Consider Hiring a Tax Accountant

Investing in a seasoned tax accountant near me can be valuable for your business, even if the professional commits just a few hours every week or month to work on your small business bookkeeping and accounting needs.

A certified bookkeeper will record income and expenses and categorize them for a specified period. Conversely, a chartered accountant will help file your business taxes and set up your business’s accounting backbone. A reputable bookkeeping company will have certified tax consultants near me ready to assist you.

With an expert bookkeeper or chartered accountant handling all financial tasks, business owners can focus entirely on their business to attract customers and satisfy existing clients. They can also develop new products and services and grow their business.

Final Thoughts

Bookkeeping is a necessary evil that businesses cannot escape because almost everything depends on it. With an accurate and robust accounting system, you will get information about the business’s cash flow, performance, and financial condition, and it will help you make informed financial decisions. With the tips mentioned above in mind, you can ensure your small business bookkeeping records are available and can make better decisions for your business. You can also eliminate the headache of bookkeeping by outsourcing this function to a certified bookkeeper to help you out. Having a safe pair of skilled hands providing bookkeeping services for small businesses will give you, as the business owner, the confidence and freedom to lead from the front by focusing more on growing your business.

Is Working From Home Right For You?

When I think about whether working from home is right for any person, I remember a story that Richard Kiosaki told in his book “Poor Dad- Rich Dad”. He talks about his two dads who had two very different mentalities about money. One had the mentality of an employee and the other of a business owner. Both dads believed they were giving correct advice although they were advising exactly the opposite.

His “poor” dad told him to choose employment because it offered job security and corporate ladder, where he could become somebody after years of being promoted. The “rich” dad asked him to choose the path of an independent business owner because that way he could work for something that he owns.

Of course when you talk to most people about starting your own business and having a passion about some new idea, you will get two main reactions.

There will be …
The Naysayers – These are the people who will tell you, “you will never make it” and that you are “stupid to attempt the impossible”.

But then you will find people who are…

The supporters – These are the people who will say go for it. They say “don’t worry” and “we will be there for you when you need us”.

While you may have your questions and even your doubts, listening to the naysayers will never get you where you want to go. Listen to those who will ask good questions, who will give you good advice and support you if your desire is to do something unique and be your own boss.
The fact is, working from home has some fantastic advantages.
1. Flexibility  When you are juggling a family and other obligations, having a work from home business is a huge bonus. Firstly, you can more easily accommodate your customers in all the different time zones.  Rather than being tied down to a regular office hour routine, having the ability to work part time or full time, takes on a whole new meaning.

2. Your overhead costs are reduced You will save money on gas, the wear and tear your vehicle (not to mention the wear and tear on your nerves), office space and utilities. The reality is that with those savings you can be a lot more flexible in how you are pricing your product.

3.  Testing,Testing When you realize that more than 50% of all new businesses fail, then testing out your new business without a lot of overhead is common sense. When you test and tweak your home business, you can determine its viability before you start investing a lot of money!

4. Tax Benefits Many people don’t realize the major tax incentives there are for having a home business and while the tax laws are different from country to country, some of the perks are:

– A percentage for rent or mortgage costs (for the space you use to operate your business)

–  A percentage for utility bills such as gas, electricity, water

– Business operating software and management tools, which also includes webpages etc.

– Phone and communications, including internet expenses

and of course the biggest tax saving

The initial investment you paid to start your business

5. Experience  A home based business will allow you to gain invaluable business experience and business skills such as internet marketing, identifying markets, learning how to market yourself and all the other traits needed to run a successful home business. This experience can be transferred to other projects that you wish to pursue.

6. Turning Creativity into a profit  Creating a home business is the ideal way to turn your hobbies or passions into a business that will be unique to your talents and what you really love to do.

You also have to be realistic in understanding what owning a home business is all about! “Working from home”, it has a wonderful sound to it doesn’t it? I bet many of you have visions in your head of sleeping in, lazing around and working when the mood strikes you right?

Like anything else there are also challenges that you should take into consideration and create a plan on tackling them. Any problem can be solved as long as you are prepared for what is coming your way.

1. Motivation It’s great to be your own boss, but with no code of conduct to follow or formal routines to keep you on track, it’s easy to fall into the trap of putting off doing your business and procrastination.  If you have an ineffective time management schedule, it makes it hard to reach your goals.

Solution
Make sure that you follow your passion and this will help you with getting motivated and working extra time when needed.
2. Lack of privacy  Unless you have a separate office set up, privacy can be a big concern. For example if you have created your office near the family room, and your house guests drop by, they will be near your work area. Your documents, work and even files can be fair game to everyone! Take that thought one step further and if you have kids, they will come in and distract you while you work
.
Solution

Create your own workspace and set your own hours. Make everyone aware that when you are working you can’t be disturbed and if anyone needs your help they need to respect your schedule like everyone else.

Finding a workplace that offers privacy can be a challenge at first. We don't recommend setting up a home office in your bathroom. CP image: guardian.co.uk
Finding a workplace that offers privacy can be a challenge at first. We don’t recommend setting up a home office in your bathroom. CP image: guardian.co.uk

3. Learning When starting a home based business, you are going to have to develop a lot of new skills, which will take time. You will be wearing many hats and in the beginning you won’t be able to afford to hire specialists who can quickly and efficiently do new tasks to you. You will have to learn things which you never thought you would need to learn.

Solution
This generally is a positive thing. You would never embark on new challenges if it wasn’t for your business. As the old saying goes, “knowledge is power” and along with building your business you are becoming an expert in new domains.

4. While its nice to be the boss, you will find that you will be facing unexpected situations you will have to deal with on your own. When you make a mistake you will be dealing with the consequences on your own.

Solution
Being the Boss is rewarding but paying unnecessary bills for unqualified decisions is not fun.

“One of the most important leadership lessons is realizing, you are not the most important person or the most intelligent person in the room at all times.”
~ Mario Btali

5. Loneliness is a huge downside to running your own business at home. In the beginning you love the fact that you can get your work done, but after a few days or weeks, you may find that you are tired of hearing your own voice.

It’s a sort of dread that happens and you might turn to such things as web surfing or chatting with friends to relieve the nervousness you may experience.

Solution

In business you need to talk to people about your ideas and brainstorm to see if they are workable. Set up a “support system” early in your business, and you will find yourself not only running into less problems, but you will have someone to exchange your ideas with and have good conversation when you need to step away from daily tasks.

6. Legalities.  Most people do not realize that whether you are “telecommuting” or creating a home based business, you need to be sure that you are covered by insurance, that you have checked zoning laws, and that you have the proper paperwork for taxes. Completing paperwork like NDA forms is important to safeguard your business.

Solution
First don’t worry about not knowing all the legalities. The Government and your suppliers will quickly communicate to you what your obligations are. They will scream loudest, and you will comply with their demands. 
7. Dependency. Most people do not realize that even as a business owner, you need to create team of people who you work with.  In case of a car accident, you still want to come back to functional business and want to have someone who can handle daily tasks where you are not around.

Solution
Have family, business partners or a team of supporters be involved early in your business, at the very least have part time bookkeeper or a person who will answer phones for you when you are away.
7. Balancing your life. Working at home can cause a lot of stress in your life, juggling the needs of your family with the needs of your work and for some people it can cause a lot of strain in their relationships. You will want to take vacations which will require someone to look after your business while you rest and recharge. You will need to plan for things like this, so you are not surprised by life, because life has a tendency to surprise us when we least expect it.

Solution
Although business is important at all times, you will not be able to benefit from it if you are stressed, tired and sick. Implement periodic holidays and time away from your work. Leave your home far enough so you can’t do anything business related while you are away. This will provide you with time to recharge.

As you can see having a home business can be a very workable solution to creating a good income. However, like anything, you need to look at all sides of the equation. Ask yourself the question, will you take the advice of the “poor” dad and be the employee or the “rich” dad and choose the path of becoming an independent business owner.

For me, I chose to be an independent owner and I have never had any regrets!

For the Silo, Bogdan Fiedur.

Supplemental– Wacky work places-  http://www.guardian.co.uk/small-business-network/direct-line-for-business-partner-zone/wacky-workplaces-unusual-home-office-gallery

Influence of COVID-19 on luxury refurbished market

The luxury market was one of the most adversely affected industries during the pandemic.

Between 2020 and 2021, people were stuck in lockdown to help prevent the spread, and as a result did not have a reason to go out purchasing luxury products.

Tax Implications if you are an NRI stuck in India due to COVID Lockdown -  Tax and accounting services for domestic and overseas Indians | GKMTax.in

This naturally affected the sales of the luxury market, as jobs were being lost and the priority shifting from spending money to saving money. Luxury products are still desired, however getting access to brand new products was not manageable for the vast majority. This is where the business model, coined by Simon Kronenfeld came into play, which helped more individuals get access to luxury products.   

If you’re wondering who Simion Kronenfeld is, he is a business expert known for his revolutionary approach of re-selling refurbished products.

His business model had a strong impact towards the luxury market. Prior to 2001, consumers were only able to gain access to new luxury products and if the products had any damages they would be returned to the company. This created a problem as the company could no longer sell these unpackaged products. Nevertheless, Simon Kronenfeld found a solution. (Kronenfeld is a man with humble beginnings, who came from Israel to Canada and started off as a dishwasher.) In 2001, Kronenfeld founded Electronic Liquidators, which not only revolutionized the electronics market, but the entire resale market, which had a tremendous impact on the luxury market. 

Kronenfeld.

Simon Kronenfeld discovered that up until 2001, nobody was working on repackaging the products that were returned to a company.

Recognizing this gap in the market, Kronenfeld started his very own business focusing on this sector specifically. Simon Kronenfeld started repackaging the products that were returned to a company labeling them as refurbished products. These refurbished products were then sold at the second-tier shops, transforming these financially burdened products into a multi million dollar business in just the span of two years. This same business model was replicated by many other companies following the positive impact this model brought both on a financial level and on an environmental level. In this day and age, sustainability is everything, so this concept has become a multi million-dollar formula for businesses. In fact, most companies are now earning billions of dollars annually by repackaging the return products and selling these refurbished products. 

This had a massive positive effect on the luxury market, as the luxury market was losing millions of dollars every year because of returned products.

Now, however, revenue could be generated from refurbished products, and turn a profit.  There are a lot of platforms online that promote luxury resale at much more affordable costs, benefiting all parties involved, especially now during the pandemic where people are not actively buying new luxury products, opting for refurbished products seems to be the best solution since they come at more affordable prices yet still offer the practicality.  

While a number of industries were negatively impacted, the refurbished market mitigated the losses in the luxury market while also offering sustainability. The refurbished market focuses on a big portion of the population in virtually any country, as in reality a tiny percentage of the population is able to indulge in these luxuries. This model gives more people access to a higher lifestyle for less, while still expanding the business market and creating more jobs as a result of this niche. These refurbished products are much more appreciated in common households and provide a good source of revenue to the sellers capitalizing on this market and offering a win-win situation.  For the Silo, Michael Adams.

eBay Canada Set Sights On Kijiji Shoppers With Test Integration Project

Back in 2017, eBay Canada and Kijiji Canada launched a test to bring increased visibility to Canadian eBay inventory: eBay listings for certain items located in Canada were integrated into search results on Kijiji – the #1 classifieds site in the country. Kijiji buyers were given the opportunity to connect with relevant eBay inventory, and eBay sellers were able to gain exposure to Kijiji’s more than 16 million unique monthly visitors.

Listing Ads Served Within Listing Ads

This inventory integration project was part of ongoing global efforts to create synergies across eBay Inc.’s businesses.

Canadian eBay sellers were asked to keep the following in mind regarding the inventory integration test:

#1. It was a test. We were adjusting listing integration parameters based on a variety of criteria – including Kijiji buyer behaviour and eBay listing performance – to ensure we are delivering the best possible experience for eBay sellers and Kijiji buyers. This test would evolve based on our learnings.

#2. The test was small-scale. Only one or two eBay items were shown in any given Kijiji result set, and only for selected searches.

#3. eBay sellers did not need to do anything at the time. eBay listings for inventory located in Canada were automatically made eligible for exposure in Kijiji search results. There was no opt-in process required; there were no additional fees required; and there were no account settings that needed to be adjusted.

Fast forward to today- if you are a Kijiji Canada user you may be surprised by how many eBay ads are now served as the test is now a permanent fixture. For the Silo, Russ Patterson, COO and Director of Product Management, eBay Canada.

Supplemental- Collectibles market has been hit hard.

Mr. Thrifter: eBay vs craigslist vs kijiji vs Amazon – Where should I sell my stuff?