Tax For The Self-Employed: How Much Do You Know?

Did you know that almost 3 million of Canada’s population is self-employed? Whether it is online or a physical store, those who engage in a business relationship with clients who pay are self-employed. Compared to those who work for a company, individuals who are self-employed are in charge of when what and how the payer is going to pay for the goods or services that they offer. Such terms of business may involve incorporation while there are others who choose to be sole proprietors of their business.

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Four Types Of Payroll Systems

As an entrepreneur, when you run a business, there are various aspects you need to look into. From keeping track of business functions to keeping your employees happy, it takes a lot to maintain the smooth running of your business. One factor which highly affects the happiness of your employees is how well you manage their payroll. Apart from maintaining a basic record of the salary given to your employees, there is a comprehensive system that each business needs to have in place for a well-managed payroll. To help you know more about it, here are some common types of payroll systems listed by experts of payroll services in Edmonton.

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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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Four Things You Need To Look For When Hiring A Public Accounting Firm

Public accounting firms Edmonton hire Certified Public Accountants (CPAs) who look after the accounting process, the finances of a company, the auditing, and the tax filing process. Several small businesses, startups, and public companies hire these professionals to look after their accounting and bookkeeping.

However, if you do not want wish to hire a professional accountant, then there are firms who provide accounting services. Choosing a reliable and certified accounting firm is very important to handle your business accounts accurately. If you are planning to hire a reliable public accounting firm, you must consider the following things.

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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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Business Owners: How to Pay Yourself

It is good to have your own business. It gives you a sense of independence. It is good to be the boss. But what about your salary? You have put in a good amount of capital investment, and your business has started running. The question on your mind now is how to pay yourself. Accountants Edmonton recommends a few tips to help business owners to pay for themselves.

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Why is Financial Accounting Important for your Business

There are multiple transactions that take place during the year therefore, it is important to have a record of those transactions. Financial accounting helps internal and external stakeholders make better business decisions. Without financial accounting, decision-making can have a negative impact on the company’s performance. Here’s why the importance of financial accounting cannot be neglected.

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What Are The Objectives Of Accounting

Accounting allows you to keep a record of all the financial transactions of a business. Each and every expense incurred by the firm and the income received is recorded in a timely manner with the help of accounting. Accounting is a must for all types of businesses irrespective of their size and niche. The objectives of accounting are explained as follows.

Systematic Record of Statements

The most basic objective of accounting is to maintain all the transaction data that includes all the inflow of money and the various expenses incurred by your business on a day-to-day basis. Maintaining these records manually is a tough job and can lead to several miscalculations. Plus, you may miss out on certain transactions if they are not maintained properly. Thus, accounting saves a lot of time and efforts and ensures that there are no errors in your accounting statements.

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How To Fix Accounting Errors

When an error is discovered in the auditing process, it should be corrected immediately to prevent the proceeding of wrong data as it results in unreliable financial statements. Mistakes due to the error in calculations, etc. require immediate corrections. But how you correct it, depends on the type of error and whether or not the error can be counterbalanced.

Accounting errors can have an impact on the financial aspect of working capital, cash flow, tax and so forth for your business. However, these accounting errors are not counted as frauds. Errors happen unintentionally, whereas accounting frauds are deliberate. There are numerous reasons behind these errors. We have listed a few common accounting errors and how you can make a correction of errors in accounting.


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How To Conduct An Audit Of Financial Statements

 

 

An accounting audit is a process of examining a company's financial position. It also places emphasis on ensuring compliance with relevant reporting standards, cash handling policies, and internal controls. Accounting audit is an effective way to understand the financial health of a company. It also plays a vital role in creating and maintaining investor’s confidence and unlocking the valuable insights of business. Here’s how you perform a basic accounting audit.

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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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Salary vs. Dividends: Dilemma for Small Business Owners

How you would pay yourself as a small business owner is a question that requires contemplation. You can pay yourself a salary, or can receive dividends, or a combination of both. However, the decision on salary vs dividend is influenced by a variety of factors such as personal and corporate tax structure. Considering this, each way of paying yourself comes with pros and cons. Moreover, in almost all cases there is a discrepancy of a percentage or two that can work in your favor or against you, and this potentially influences your decision on how to compensate yourself. To provide you with clarity on the subject here is a comparison of paying yourself in salary vs dividend.

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