How to Set Up a Small Business Accounting System
Many small business owners (myself included) tend to focus on the more glamourous aspects of their business eg. sales, marketing and product/service development. As a result, accounting often does not get the attention it deserves. In addition to the perception that an accounting system does not necessarily add value, it can also be a little intimidating. However, there are numerous benefits to setting up an accounting system and it can actually be fairly straightforward especially if you have some help with setting it up. A good accounting software tends to handle most of the complexity of accounting as long as the data is compiled and entered accurately.
Are you Ready to Make the Transition to Self-Employment
There are many of to whom the promise of being one’s own boss as a self employed business owner seems extremely appealing (particularly if have an extensive set of "leisure"wear). You might crave the feeling of accomplishment that is no longer possible at your current place of employment or you seek greater flexibility and love the idea of working from home. Perhaps you feel that you are not being compensated adequately for your skills or the value that you add to your organization. Or you simply might find yourself bored and uninspired, scouring social media sites for hours on end, and realize that you need a change of pace.
7 Reasons Why Debt is Good for Your Business
Debt is often perceived negatively. Debt can be “evil”, “crippling” and an “unforgiving master”( the last one from the Google query “Debt is…”;). It suggests a lack of sufficient cash flow and an inability to fulfil your funding requirements. It also an indication of increased risk, as if you are unable to service your debt repayments, it could have dire consequences for your business (see American Apparel). There is however another side to debt. The majority of large corporations have some level of debt. It can be a great way for individuals to earn a return on their investment. And of course it is an integral part of the engine that drives the world economy. For small business owners, debt can actually provide some great benefits as long as it is managed responsibly. Some of these are discussed below:
Understanding Payroll Deductions: Personal Income Tax Rates, CPP/QPP, EI and Basic Exemption
The automation of the tax preparation and filing process has been a boon to individuals and tax preparers alike. Gone are the days of struggling to find the right box on the return, adding everything up 5 times and still getting different results, and hoping that the CRA can read your chicken scrawl. Present day tax software not only guides you through every step of the process, it also helps to optimize your allocations thereby reducing your taxes payable. There is however at least one downside to automation: Since we are more removed from the actual calculations, our understanding of our tax situation is somewhat diminished. We have an idea of what we expect to pay, which we can see every week on our paycheques (or for self employed individuals, the breathtaking moment when we see the final result on our tax return), but often we are not really sure how these amounts are derived. Below is a discussion of the tax rates, deductions and maximums to improve our comprehension of this somewhat complex topic:
Quebec Parental Benefits for Self Employed Workers
In Canada parental benefits are administered by Service Canada. Since they fall under the EI program, self employed workers must opt in tothe EI plan for self employed individuals to receive benefits. In Quebec however, unlike the rest of Canada (a common theme with Quebec), parental benefits are administered by the Quebec Parental Insurance Plan (QPIP), which does not specifically require opt in. Instead all workers in Quebec whether self employed or employees are required to pay premiums, based (similar to QPP) on their insurable earnings. For the self employed, premiums are payable at a rate of 0.86% upto maximum insurable earnings of $62,000, and are reflected in your annual tax return. As such all workers in Quebec are eligible for Parental Benefits.
What to Do When your Tax Obligations are Overdue
The Many Hats of Self Employment
Being self employed comes with many benefits. You can sleep in, work in your pyjamas and go shopping in the middle of the day. You no longer have to report to a boss who doesn't really understand what you do or deal with mindless workplace politics. It all sounds wonderful, but unfortunately there are also many challenges. Small business owners have to deal with uncertainty and risk. They need to be disciplined and deal with the many demands that being self employed can impose upon us. In the early stages of self employment, most of us have to take on the responsiblity of fulfilling the administrative functions that you find in a more established business. Some of the skills that you need to develop are:
Breaking Up with a (Likeable) Client
Many of us have clients who are annoying, cheap, stupid , high maintenance or some combination thereof. As a new business owner, we are often stuck with these clients because we need them. However, we look forward to the day when we will have the thriving business that we so deserve, and fantasize about the spectacular way in which are going to fire them (you can shove your business into your rear orifice etc.) This is actually a productive fantasy as can help to channel and concentrate anger. Of course, in the majority of cases, a firing should be conducted with slightly less vigour.
Small Business Survival Statistics and 9 Steps to Improve Your Chances of Sticking Around
The temptation to start a small business or venture into self employment can be strong particularly for those who are unhappy with their existing employment situation. The freedom and flexibility that being your own boss seems to offer can be seductive, as is the potential for growth which you, as the business owner, can have full control over. You may have an idea or a particular skill that you believe is desirable to a specific target market and you are confident that once this target market is aware of your existence they will all be banging down your door. Consequently, you start your business by offering an amazing product or services, only to realize that building up a customer base is more challenging than you thought. Additionally, there are a number of other obstacles for which you do not have the expertise (done by another department when you were an employee) whether it is marketing, website development, legal research and accounting. Finally, you realize that you actually need a fairly sizable source of cash to maintain the business, deal with growth opportunities, whilst ensuring that you are able to support yourself.
CJAD Finance Segment with Tommy Schnurmacher – Everything You Want to Know about Small Business
3 Invoicing Options for Small Businesses and Freelancers
If you are running a business of any size, it is essential that you have a system in place that allows you to get paid. A system can range in sophistication from a handwritten receipt to a software generated invoice which is part of an entity wide CRM system. To meet this need there are countless invoicing solutions available and many billions of dollars are spent annually on setting up systems to meet each business’ unique needs.
Almost all accounting software geared to small business owners and freelancers have built-in invoicing modules that integrate with your accounting. This is very useful when doing your books as you don’t have to worry about entering your invoicing manually and it allows you to track your accounts receivable and deposits into your bank account. There are also invoicing solutions that are not full-fledged accounting systems; however they usually integrate with the more popular software.
How to Update Wave Accounting for the 2012 QST Rate Increase
As of January 1st, 2012 the Quebec Sales Tax (QST Rate) which had gone up from 7.5% to 8.5% on January 1, 2011 will now increase to 9.5%. The effective sales tax in Quebec will go up from 13.925% to 14.975%. Since QST is calculated on the net amount + GST, the rate is not 14.5% but 14.975% . In other words the effective QST rate is 9.75%. Business owners will need to update their invoicing and accounting systems accordingly to ensure that the rate is properly reflected.
If you are using Wave Accounting, the update to the rates is fairly straightforward, with one little quirk. Since Wave, unlike Quickbooks, does not allow for the QST to be calculated on the GST, the effective rate has to entered manually. This is done as follows:
To update Quickbooks for the tax rate increase, please see “Updating Quickbooks for the 2011 QST Increase”. The procedure is essentially identical except for rates.
Quickbooks Online Banking: Setting Up, Deleting Matched Transactions and Manually Uploading Web Connect or Excel Files
15 Canadian Small Business Facts and Figures
