Pros and Cons of Doing Your Own Accounting

Many small business owners get confused whether they should manage bookkeeping on their own or seek help from public accounting firms Edmonton. If you are also one of them, here are a few pros and cons of doing your own accounting that can help you in making the right decision.

Pros of Doing Your Own Accounting

Save Money

While conducting your own accounting, you are saving the fees that you would’ve paid to the accountant. The cost of hiring an accountant can be saved and used for other business purposes.

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Basic Accounting Principles That Business Owners Should Be Aware Of

Accounting principles are the rules and guidelines which companies need to follow while reporting financial data. Business owners may not be able to handle their accounting because it’s easy to miscalculate the expenses and taxes owed. As a firm that offers Edmonton bookkeeping services, we find that accounting your business financial transactions is vital because:

1) Know your Company's Financial Health

You need to be aware of the expenses, returns, and profits of your company. It’s a crucial information required to make key business decisions.

2) Be Tax Compliant

The Canadian Revenue Agency requires you to pay your taxes. Failing to do so, or missing out on certain tax requirements will have consequences.


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Small Business Accounting Edmonton: The Audit Preparation Checklist

Running a business and maintaining your financial accounts on a regular basis can be a difficult task. Doing your own accounting has its own pros and cons. With too many responsibilities in your hands, mistakes are bound to happen. Such mistakes create a problem for you during an annual audit. Here is an audit preparation checklist you should keep in mind when there’s an audit for your small business accounting Edmonton.

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Four Tips For Managing Accounts Payable And Receivable

Accounts receivable and accounts payable are the two main factors that affect your business cash flows. Managing both is an important skill that needs to be mastered for an effective financial stability. It also helps boost the overall performance of the company and avoid cash problems. Properly tracking accounts receivable and payable involve the creation of invoice on time, delivering the receipts, tracking the shipping orders and maintaining financial transactions. Here are a few tips that will help you in managing accounts payable and receivable in an effective and efficient manner.

1. Organize Your Transactions

Be organized and send out invoices immediately after the transaction has been completed. For a regular delivery of goods or when goods are taken on credit, send the invoices when they are due. It may be difficult to remember all the transactions for which payments are expected in future. Hence, make sure you keep a proper record system and organize all your transactions. See to it that your accountant effectively organizes all your transactions as your books contain valuable information and prevent you from forgetting or making incorrect invoices.

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Difference Between Assets And Liabilities

 

Do you find it difficult to formulate your balance sheet? Do you get confused between what are assets and liabilities? Is it that you always tend to classify your assets and liabilities in the wrong manner? Although assets and liabilities seem easy to classify, they can be quite confusing once you actually start recording them in your books of account. This article will help you in classifying your assets and liabilities and so, you will be able to manage your balance sheet in a much more efficient way. Listed below are the differences between assets and liabilities.

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Six QuickBooks Tips For Beginners

QuickBooks are for small and medium-sized accounting businesses which help them to maintain basic accounting transactions. It offers on-premises as well as cloud-based accounting application system which records business payments, pay bills, and payroll systems. If you are a beginner, here are a few tips on how to use QuickBooks.

1. Backup your Files Regularly

QuickBooks deals with your financial files, reports, and customer information. It is of utmost importance that you always save your work like you would do for any other application such as Word Documents. Backing up your files regularly will help you retain crucial data in case you delete or lose your files due to some reason.

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What Is The Difference Between Financial And Cost Accounting

Financial and cost accounting are a part of the company’s operations. Both help the company control its finances and formulate strategic organization policies. An overall picture of profit and loss is provided by financial accounting, while cost accounting provides a detailed analysis of a product’s cost.

Meaning

Financial accounting keeps track of a company’s financial transactions for a given period of time which is usually for a year. Financial transactions are recorded using a standardized format and following certain guidelines and is presented in the form of income statement or balance sheet.

Cost accounting is a system of recording all the costs incurred in a business. It includes the cost of used to calculate each overhead product-wise, such as materials, labor, direct and indirect expenses, etc.


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What Is The Importance Of Accounting Ratios

Every business can determine its profitability and efficiency based on the financial statements. Although profitability can be easily identified on financial statements, the efficiency of the organization can be understood with the help of accounting ratios.Therefore, businesses cannot neglect the importance of ratio analysis. The comparison or relationship between one accounting data-point and another helps in determining the financial condition of the company. Ratio analysis is done to compare how the company is performing with others in the industry and also to determine a company’s current performance with respect to previous years. Here are a few more reasons why accounting ratios are important.

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Difference between Capital and Revenue Expenditure

Classifying capital and revenue expenditures can be a difficult task. These expenditures directly affect in creating an accurate balance sheet and thus, you need to know how to classify them in the correct manner.

Examples of capital expenditure include the purchase of an asset or any repairs done to the asset in order to increase its life and productivity.

Examples of revenue expenditure include wages and salary, printing and stationery, electricity, repairs and maintenance, inventory, postage, insurance, taxes, etc.

To help you understand capital and revenue expenditure, here are a few points that distinguish the two expenses.


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5 Common Accounting Mistakes

Finance is the center of any business. Businesses revolve around earning and managing its finances. Therefore, a sound accounting system and practice are vital for the success of your business. As a business owner, your biggest constraint is time. With several things on your plate, overseeing accounting functions becomes difficult. While you may have a software in place to make things easier, accounting mistakes might still occur. Accounting mistakes can have a great impact on your growth and reputation, as well as, other business operations. To avoid this, here are 5 common accounting mistakes that every business owner must be aware of.

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How does a Holding Company Work

When investing in securities issued by corporations, you may have come across a term called a holding company. While you might wonder what it is, you would be surprised to know that most successful companies in the world are holding companies. A holding company is a parent corporation that holds various businesses under it. Such a company does not do anything by itself, but instead, it is designed to hold investments in the form of stocks, bonds, mutual funds, gold, silver, real estate, trademark, patents, licenses, copyrights, or anything of value. A holding company holds enough investment in other entities to manage and control them.


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How can you Estimate your Inventory

Inventory management is a crucial part of accounting, especially for those businesses dealing in physical goods. Companies sometimes need to estimate the value of their inventory during a financial year. It may be  for maintaining periodic financial records or to estimate damage or theft of inventory. While it may not be difficult for those dealing in a few products, but for large companies where the physical count is impossible, you need techniques to estimate the value of your inventory. There are two procedures to calculate, namely inventory- gross profit method and retail method.


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6 Tips to Get More Tax Refund

As you near the close of the financial year, you start anticipating taxes. When filing taxes most of us are looking to pay no more than we owe or rather boost our tax refunds. Tax refund is a boon, which helps you secure yours as well as your family’s future by saving more. While you are obliged to pay taxes, there are ways that will help you reduce your tax liability. Here are 6 tips through which you can get more tax refund.

Make Donations

Making charitable contributions to tax-exempt organization allows you to claim a substantial amount of non-refundable tax credit. Such tax-exempt organizations include religious organizations, charitable organizations, community groups, colleges, non-profit hospitals and more. When you make donations to the listed organizations, you are generally able to claim all or part of the amount, up to the limit of 75% of your net income.

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What To Do With Overdue Invoices?

Do you have some clients who always delay your payments? Are unpaid invoices affecting your cash flow? Is your client always busy or comes up with an excuse when you ask about the payment? Well, these are some of the commonly faced problems by small businesses. An untimely or worse unpaid invoice not only affects the profitability of your organization but also causes other problems in your finances. So how do you deal with overdue invoices? Here’s what you should do to overcome the problem of overdue invoices.


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How Can Your Business Manage Checks?

Many small businesses deal with the hassle of inflow and outflow of checks on a daily basis. As a business owner, you are involved in several aspects of business operations. Signing and depositing checks seem like a daunting task in your busy schedule. In a fast-paced era, a traditional approach for check management is time-consuming. Investing in technology and keeping up with safety measure makes for a more efficient way of managing checks. Here are a few accounting tips for small business that allow better check management.

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How To Account For Overhead Costs?

Reducing cost is one of the ways to increase your bottom-line. However, it is not easy to reduce cost. For this purpose, it is important to know about the different kinds of costs incurred by the business. The overhead cost that includes rent, repairs, office supplies, insurance, advertising, and interest is one such cost incurred by the business. These costs do not generate revenue directly but are necessary to carry out the business operations. If you want to maximize your revenue, you can do so by reducing your overhead cost. But how do you account for the overhead cost? The following are ways to account for overhead cost.

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4 Reasons To Outsource Your Bookkeeping

Are you able to manage your accounts effectively? Are you aware of all the latest tax policies and accounting standards? If the answer to both those questions is no, then no need to panic. You would rather want to focus on your core business activity than keep up with the latest updates on manage your business accounts. Rather, it would benefit you if you outsourced your bookkeeping to a bookkeeping service in Alberta. Apart from this, here are a few more benefits of outsourcing bookkeeping services.

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Why Should You Have A Christmas Party?

Your employees would be eagerly waiting for some celebration during the holiday season. For small or medium businesses, parties can indeed be a costly affair. So even if you plan an office party, you might cut down on certain things and minimize the cost. However, this may not be a good idea if your party lacks certain elements (the ones that cost more than others like some fine delicacy or drinks, live DJ). Such parties tend to be boring and it would’ve been much better if you didn’t have one instead. In fact, having a good party has many benefits for the organization. Since Christmas is near, you can have a Christmas party for your employees. Here are some of the benefits why you should celebrate Christmas at the office.

Enhances Employee Engagement

One of the reasons to have a Christmas celebration at the office is because it enhances the employee engagement. Parties act as an ice-breaker and employees socialize with each other. Moreover, as people begin to talk to each other it helps to develop a good rapport among the employees. This leads to increasing the morale of the employees. So having a Christmas party has some long-term benefits for your organization.

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How To Save Taxes On Your Home?

Taxes can indeed take a large chunk of your profits. Your profits minus the tax may leave you with very little money for yourself. This is, even more, a worrying sign for self-employed people who operate from their home. However, with the help of home office tax deduction, you can get home business tax saving. Thus, you are able to reduce your tax amount. But, how do you reduce it? An accounting assistance in Edmonton will be able to help you to get the home office tax deduction. Some of the ways to get home business tax saving are mentioned as follows.

Deductible Expenses

When you operate from your home, you are allowed to deduct some of the expenses such as a part of the electricity cost, heating, and maintenance. Some of the expenses that would not be deductible include mortgage interest, home insurance, capital cost allowance and property taxes. So if you have missed out on the deductible expenses before, make sure you add them to the deductible taxable amount to get the exemptions


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Estate Planning Strategies For Small Business Owners

Are you concerned about what will happen to your family owned business after your death?  You want to ensure your family’s future is secured even after your death. For this purpose, estate planning for family owned business is crucial. An estate plan describes how your company assets are passed on to your family members in the most cost effective way as possible. The estate plan you create now can affect the accounts and finance your business substantially.

Here’s some estate planning strategies that you can use to plan for your estate accordingly.

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