4 Alternatives for Preparing Your Small Business Payroll
Paying salaries to employees (or yourself) requires more than just determining the gross amount to be paid. The Canada Revenue Agency and Revenue Quebec require that employers calculate a variety of taxes on the salaries paid, remit them to the federal and provincial governments and prepare annual reports demonstrating that the calculations are correct and all salary deductions have been paid. This can be a lot of work for business owners whose time is better spent generating sales and building their businesses. Luckily there are many options for small business owners to calculate their payroll and salary remittances, many of which simplify the process:
Nine Steps to Starting your Small Business
Starting a small business is a fairly simple process. If you are using your own given name, all you really need is a product or service that people want to a buy. Maintaining a business that is successful and meets your long term goals can be a little more difficult. In our current technological age of AI, online apps for pretty much anything and cloud computing, the tools and apps that can help you succeed are numerous to the point where they can be a bit overwhelming. You are a Google search away from being bombarded with search results, many pages deep, that provide insight, tips, tricks, mistakes and guidance on how to run a business. The difficulty arises when you have to implement them, since every small business owner’s circumstances and business goals are unique. Additionally most business owners, particularly in the startup stages, have tight budgets. With that in mind, below are the steps businesses should follow when they are first getting off the ground:
What Version of QBO Is Right for your Business
If you are thinking about upgrading from your current accounting system or spreadsheet or starting your new business venture with accounting software, QuickBooks Online is a good way to go. It is perhaps the most well known accounting software and, having used both the desktop and online versions for many years, it can be a great tool for anyone who wants to track their self employed/small business finances.
When you have made your decision, you will have to determine which version of QBO to get. This requires that you understand what features are necessary for your business.
19 Features to Consider When Selecting Small Business Accounting Software
A good accounting software can be an invaluable tool for businesses. Before choosing an accounting software it helps to have a detailed understanding of what your accounting system can do for you . This involves analysing the key aspects of your business, determining what is essential (eg. invoicing, expenses, banking, reports) and what you would like to have (eg. time tracking, credit card payments, banking downloads etc.). By reviewing your requirements in advance and building a checklist, you can make a better decision about something that goes to the very foundation of your business. Below are some important features to consider:
How To Close Your Year End (or Period End)in QBO
Doing your own accounting in accounting software such as QuickBooks Online (QBO) is relatively straightforward especially if you have set up your QBO file optimally. You periodically enter invoices, expenses, bills and allocate transactions from the banking download. And while QBO is designed for non accountants, it is also equally appreciated by many accountants for its simplicity and user friendliness (although, as with any software product, there are grievances).
There does come a point, however, when you might notice that some things don’t look right. The bank balance or credit card balance might not match to the QuickBooks balance or your income and/or expenses might seem much too high or inconsistent with previous years. The solution to identifying and fixing these discrepancies is to perform what accountants refer to as year end (or month end) closing procedures, that if done properly, should correct any discrepancies that crop up. The ultimate goal of closing the books monthly or annually is to ensure that you can rely on the integrity of your data.
Consider These Factors When Deciding Whether to Take Salary or Dividends
One of the most common questions I get asked by corporate business owners is whether to take salary or dividends and how much tax can be saved by taking only dividends. The answer unfortunately, like most issues relating to tax, is that it depends on your circumstances. The concept of integration in the Canadian tax system theoretically strives to make taxes payable the same whether you take salary or dividends or a combination of both. In reality, there is always a difference as everyone’s tax situation is distinct.
Consider These Financial and Tax Implications When Buying a Home
The Canadian real estate market has performed well in recent years, though analysts and economists have long warned of its potential overvaluation.
Potential homeowners often find themselves seduced by their vision of the perfect home in the perfect neighbourhood and often end up in a difficult situation, referred to as “house poor”, where the majority of their disposable income goes to paying down their mortgages.
This can be avoided by ensuring that you realistically assess what you can afford and being financially responsible.
Know Your Small Business Tax Deadlines In 2025
As we approach the new year, it is time to start thinking about a subject near and dear to your heart i.e. taxes (insert appropriate emoji).
Below are the deadlines that all small businesses need to know for 2025.
5 Reasons to Change Your GST/HST/QST Reporting Period and How to Do It
When starting a business the selection of the GST/HST or QST reporting period i.e. how often to file your sales tax returns is often based on new business considerations. Many new business owners are quite enthusiastic and/or orderly and therefore would prefer to file their reports and pay the balance owing on a more regular basis. Conversely owners might be concentrating on the other aspects of running their business and do not want to be bothered with the administrative hassle of regular monthly or quarterly reporting. In this case, you might select the annual reporting option to make the year end reporting requirements as simple as possible. As time passes and your business evolves, you might realize that the option that you initially selected may no longer be the most optimal.
Why a Separate Bank Account is Essential for Your Small Business
If you are self employed or a small business owner taking care of your own accounting and business finances, you have probably discovered that this can be time consuming and occasionally frustrating. It can sometimes be difficult to know if you are doing things correctly. Consequently, you procrastinate, which makes things worse at year end or tax time. To combat the problem it is important to have tools in place to facilitate the process and make it less painful, which could include accounting software and/or a bookkeeper as well as a good organization system for your documents, whether you have a paperless office or a manual filing system. Another very simple measure that you can take is to have a separate bank and credit card account for your business.
10 Year End Financial and Tax Tips for Your Small Business
As the end of the year approaches, some of us find ourselves overwhelmed by top 10 lists, the shopping masses and endless renditions of Christmas Music. Businesses tend to experience a slowdown, which makes it the perfect time for small business owners to take a closer look at their overall business, financial and tax situation. When you are not buying gifts for your customers, family and friends, a review and analysis of your business will allow you to optimize your current financial situation, implement some beneficial changes that can help avoid last minute tax preparation stress and also prepare for the future.
Revenue Canada Interest, Penalties and Payment Arrangements for Income Tax and GST/HST Returns
Whether you are an individual or a business in Canada, taxes are an inescapable part of your existence. All sources of income need to be calculated, tax returns needs to be filed and taxes owing must be paid. This is somewhat facilitated if you are an employee as your employer tends to take care of the majority of remittances. Self-employed individuals, sole proprietorships, partnerships and corporations on the other hand, must account for their income and expenses , determine taxes payable and remit the appropriate amounts. Additionally, businesses are also responsible for other filings including GST/HST and QST and payroll. A lack of knowledge, imperfect accounting systems and the business of running a business sometimes interfere with the timeliness of filings. The Canada Revenue Agency attempts to curb these tardy behaviours by imposing penalties and interest on late filings as follows:
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Is the Quick Method of Reporting GST/HST & QST the Right Choice for your Small Business
If you are self employed or a small business with annual sales between $30,000 and $400,000, it might make sense to select the Quick Method of reporting your GST/HST and QST, which is essentially a simplified method of reporting sales taxes . While regular reporting of sales taxes requires that you calculate all amounts collected and paid on eligible expenses, the quick method (or simplified method as it is also referred to)requires the application of a single reduced rate to your sales while GST/HST and QST paid on expenses is not deductible. The key details of the Quick Method and its suitability for your business are discussed below:
How The CRA AII Program Increases the Tax Deduction for Computers and Other Fixed Assets
In the fall of 2018, the federal government decided to introduce a tax incentive called the Accelerated Investment Incentive (AII). The purpose of this program was to stimulate business investment by increasing the amount of capital cost allowance (CCA) on depreciable property (the terminology, sadly, is a bit less stimulating). In layman’s terms, it means you could claim a higher amount of depreciation on assets such as computer, equipment, furniture etc, in the year of purchase, thereby reducing your taxes in the short term.
10 Payment Alternatives to Help Small Businesses Get Paid Faster
One of the numerous ways in which technology has benefitted small businesses has been to increase the number of payment options available. While conventional methods of payment like cash and cheque still exist, there are also a variety of other options like debit cards, internet transfers and mobile payments that have greatly facilitated payment infrastructure and made financial management significantly more flexible. Every business owner must wade through the alternatives and decide what type of payment options are right for their customers. This is based on several factors including their industry, common practices, location and of course business specific considerations. For example, a retailer will usually allow for payment by credit and debit cards, cash and possibly some form of mobile payment. Conversely, a law office may not offer a credit card option, but request payments via cheque or bank transfer.