Frequently Asked Questions2020-06-05T20:17:30+00:00

Frequently Asked Questions

QUESTIONS & ANSWERS

Do you need some help with your accounting, or do you have an urgent taxation question that you need answered pronto? Just click on one of Frequently asked accounting and taxation questions below to find the answer…

Is Now the Right Time to Incorporate?2019-10-18T08:56:46+00:00

If you’re considering incorporating your business, first ask yourself if your personal assets are protected from any legal liability. Incorporating your business offers some protection of your personal assets in the case of legal action. Corporate income tax rates are lower in Canada than personal tax rates. Incorporating your business can have tax deferral benefits if the companies income is exceeding your personal needs as an owner. Incorporating is the right decision if your company is generating healthy revenue, if growth is in your business plan and if you want liability protection.

Rental Activity: What items to track.2019-10-18T09:02:25+00:00

When it comes to rental properties you are going to have to report any income made. The good news is that you can also claim any expenses related to that property as tax deductions. Some of these items are:

● Home Insurance premiums on the property for rent
● Advertising costs
● Maintenance, repair and improvement costs
● Travel expenses to inspect the property or show it to potential tenants
● Office or administrative costs
● Property tax for the rental property (You can only claim the percentage of the property that is rental housing)
● Utilities used in the portion of the property for rent
● Mortgage interest

Should I do my own bookkeeping?2019-10-18T08:59:35+00:00

Many business owners prefer to do their own bookkeeping so that they save money and remain in control of their companies books. Managing a companies financial records takes up a lot of time you could be using to grow your business, or create deeper relationships with clients. It is important to ask yourself as a business owner if you have the time and the interest to keep accurate and detailed books. Finding a reliable bookkeeper or contracting to an accountant doesn’t mean you lose access to your companies books and financial documentation, it just means you free yourself up for other important tasks. Although most business owners are perfectly capable of handling their own bookkeeping, we do recommend hiring a bookkeeper when your company grows too big to reasonably handle the financials on your own.

Business Activity: What do I need to track?2019-10-18T09:00:57+00:00

Tracking your business activity, aka the numbers, can help you understand areas for improvement in your business, trends and what could be on the horizon.

● Cash Flow: Keeping an eye on this helps you catch leaks.
● Sales: Where is the money coming from. You can organize this by department, client, sales representative, whatever makes the most sense for you.
● Net Income: This is a great number to calculate monthly to know if you’re loosing or gaining money after all expenses are paid.
● Profit and Loss records: These numbers help companies to predict success or the ability to reach their goals. Good accountants understand the importance of monitoring your companies profits and loss statement.
● Gross Margin: When you buy a product and sell it at a percentage of mark-up your gross margin is the money you made after your subtract the original cost of the product. The gross margin has to be able to cover your business expenses.

Do I need a separate bank account and credit card for my business?2019-10-18T09:01:47+00:00

Yes! Having a bank account specific to your business helps you to maintain clean and accurate bookkeeping and accounting records. You will also require a separate business bank account to become incorporated or to apply for a business loan. Having a separate bank account for your business is important for taxation purposes as well as looking professional to clients and employees.

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