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Unexpected Medical Expenses - How to recoup your loss! C2online

Medical expenses can be an unexpected expense.  Ensuring that you take advantage of every claim opportunity when filing your income tax will save you money. 

We have wrote several times on missed medical claims.  A recent article written by CBC senior writer, John Hembry about 10 medical tax deductions that can save you money, caused us to provide our readers further information.

 He says, “Most people are aware they can claim the medical expenses tax credit, but many don’t keep a running tally because they simply forget or don’t think it will add up to worthwhile savings, tax experts say. For many people, that's a potentially costly mistake.”

Hembry talks about the disability tax credit.  Darlene Lafond from C2Online, a registered public accountant adds that we need to consider, what if a family member is dependent on another family member for food or shelter or clothing – any essential life support on a routine basis: You should discuss with them if they qualify for the dis ability tax credit T2201.They may not require the disability tax credit on their taxes but if the support person needs it, they may be able to transfer any unused disability tax credit to them just because they are providing essential life support, even if the person does not live with the person providing support. Learn more to claim at How to Transfer.

 In addition, Hembry talks about travel expenses related to individuals who live in rural communities and are traveling more than 40 km one way for medical reasons can claim the trips on their personal tax return for a medical deduction.  Keeping a diary of the trips taken for medical reasons to use for a medical deduction on their personal tax return. However, it is critical to know and record the total number of kilometers driven during the year for any medical purposes when you have traveled over 40 km one way. Need a form to help you claim, check out this form Deduct the travel.  Intuit’s Turbo Tax also provides you help how to claim.

Remember when you claim medical deductions on your income tax return to always consult with you an accountant and ensure the expense you are claiming is accurate and examine if you are missing any other claims.

 


The Minimalist Guide to Getting More Customer Referrals C2online

Hands down, customers are the lifeblood of any business.


Unfortunately, when a company cuts costs, marketing is typically the first area that usually gets hit. Funds for marketing campaigns and collateral are reduced or eliminated. For small business owners, especially start-ups, budget for marketing can be hard to find.

It’s a catch-22. There’s little or no marketing budget and you need to be visible. Waiting for the next opportunity and for new clients to appear isn’t a viable option. How do you ensure you remain competitive and bring in more clients with little or no budget?

Ask for referrals

Referrals are free – and worth millions in advertising. It doesn’t get any better than that. Go back to old clients and ask for one. With new work coming in the door, always ask for a referral when the work is completed. And it’s also important to ask for a written testimonial that you can include on your website or in print materials.

So, how do you earn referrals from your customers?

Do not meet expectations, exceed them. When a client hires you for a job, always look for an opportunity where you can add value.  If you see an area or process that could be better, make suggestions for improvement.

Always work within the set budget, and if possible, reduce costs.

Make sure that you have considered the cost carefully before you present the budget to your client.  Asking for additional fees in the middle of the transaction can turn clients off. They are also keeping tabs on their expenditures.  Additional fees can affect their other projects. And may mean you aren’t the preferred choice next time.

Deliver on deadline

Always make sure that you deliver on time.  If that’s not possible, inform your clients ahead of time, and state the reason for the delay.  Make sure it’s logical and reasonable.  All business transactions are linked to each other, and any delay can potentially affect other areas of their business.

Keep your clients up-to-date about the project you’re doing for them.

When a client hires you, they are expecting to know your progress.  This is not only to appraise the quality of your work, but also to ensure they are on top of any problems that might crop up.  Always keep your clients informed; whether it’s bad or good news, they will definitely appreciate you being proactive and honest.

Be dependable

Always walk the talk.  Don’t say one thing, while meaning another. If you make a promise, keep it.

Be thankful, and thoughtful

Create a strong relationship with your client by expressing your appreciation for the work. Drop your customer a note, or better yet, phone them to express your thanks for the work and for referrals.  A small gift or token of appreciation is always welcome.

What are the other things you can think of that will drive customers to give you more referrals?

Photo Credit: DCarlton


How to End Your Relationship with a Difficult Client C2online

Let’s face it, not every client was sent from heaven. While some clients are great to work with, others can really test your mettle. If you have a difficult client, you may need to evaluate whether or not the toll this relationship takes is worth the money you’re earning.

We all have to contend with unreasonable or unpleasant clients at some point in our careers. Here are some examples of situations that can cause tension between you and a client.

 

• Invoices are not paid in a reasonable amount of time. This situation can be awkward; no one likes to chase people for money. There may be a number of reasons why payment is late. The client may be too busy to deal with their finances, the project you are working on for them may not be at the top of their priority list or they may be experiencing a cash crunch.

• Extremely high expectations and demands. For example, they may insist you call them ASAP or call you at unreasonable hours. E-mails are sent expecting an immediate answer. If you find them breathing down your neck almost every single hour of the day, it may cause damage to other excellent client relationships, taking up your valuable time..
• You and the client simply do not mesh well.

 

One choice is to grin and bear it. Another option is to change the relationship. And, the final last option is to disengage. Regardless of the cause, working with a difficult client may not be worth the effort.

One choice is to grin and bear it. Here are some tips to ease the transition:

Changing the situation:

1. Picture how you would like the relationship to work. Write down what you would like to say and practice it.

2. Discuss the situation
Talk to your client. Explain your concerns. Talk to them by phone or in person if that’s possible. Be polite and keep your explanation short. Make the conversation as pleasant as possible. Work towards a solution.

 

If you’ve decided to terminate the relationship:
1. Complete tasks
If you still have some tasks that need to be finished, like deliverables your client is expecting from you, make sure you deliver them and finish your commitments. You may have reasons to let a client go but avoid reneging on your promises. Besides, doing so would only give him/her a reason to say negative things about you and keeping your reputation intact should be one of your main objectives.

2. Replacement
If this is an option, try to find a potential replacement to finish the project. Be sure to give a reasonable explanation to your replacement about why you are making the change.

Hopefully you are never in a situation where you are required to terminate a relationship with a client but if you are, we hope these few tips will be helpful.


Photo Credit: CELALTEBER


6 Money-Saving Tips for Savvy Entrepreneurs C2online

Lowering your operating expenses is always a good thing. Take a few minutes once or twice a year to think about how you can cut back or eliminate unnecessary expenses. Over time, those saved dollars can add up to a significant amount in your bank account.

 Below are 6 tips for reducing everyday business expenses that you can implement without sacrificing too much.

 

1. Office Equipment

Using energy efficient equipment in your office gives you more bang for your buck: while saving on electric bills and extending the lifespan of office equipment, you are also protecting the environment. Consider using a laptop as it consumes less energy than a desktop.

See: Approximate Desktop, Notebook, & Netbook Power Usage by Penn Computing 

2. Communication

Review your phone plan, or your employee’s cell phone allowances. With employees using E-mail, SMS and social media, does everyone in your office really need a phone to communicate? E-mails can often be faster, less intrusive and more effective since each transaction documents the “conversation”?

    See: Minimizing Distractions: Managing Your Work Environment by MindTools

    3. Cut down on paper use

    Sometimes a totally paperless environment is not possible. If this is the case, try to use less paper. Or use both sides of bond paper for printing and don’t just throw used paper away. Remember to recycle paper.

    See: Working green: 50 tips to reduce your office's waste by Jessica Hupp

    4. Utilities

    Utility bills add up quickly. If you need to paint your office walls you might consider using lighter colors and make the room brighter, reducing the need for lighting. If possible, install timers or motion sensors that automatically turn off the light in a room when not in use. This could save a little on your electrical bill. Set your thermostat slightly lower and encourage your office staff to dress in layers. You don’t want them to be wearing mittens while typing but perhaps they can wear long sleeves or a sweater. Turn off computers when not in use or when leaving the office.

      See: How light affects colour, and tips for choosing paint by Cristina Colli

      5. Advertising

      Word of mouth is your cheapest and most cost effective way to attract customers. If a new prospect calls you, make sure you give them a positive customer experience – for example, ask questions and let them do most of the talking. Go the extra mile and over deliver and under promise. Happy customers will spread the word about you. Use social media as well such as free platforms like Facebook, Twitter, Pinterest or YouTube to create awareness about your business. Leverage your marketing initiatives by using social media.

      See: Word of mouth, social media and viral advertising by Marketing Made Simple

       6. Offer internship programs, or better yet, hire a freelancer.

      Many graduating students would be more than willing to take on any job so that they can complete their on-the-job training requirements. Not only will you pay a minimal wage, but also many interns will be keen to put their best foot forward to finish the job and their school requirements, plus impress a potential employer. Alternatively, you can hire a freelancer. Many freelancers charge less because they work from home.  As a result, you save on office space, electricity, and expenses associated with full-time office employees.

        See: Hiring Freelance Workers in Your Business by Daniel Richards

         

        Think outside the box--there are many more ways you can save money.  Be creative and reap the financial rewards.


        Are Your Internal Financial Controls Fool-Proof? C2online

          

         Protecting your assets—real estate, machinery, equipment, supplies and most importantly, cash—is crucial to running a successful business. Putting financial controls in place is one way of encouraging integrity and honesty within the workplace.   

        As a business owner, it is your responsibility to ensure the integrity and the credibility of your company and employees. This includes being knowledgeable about the types of fraud that can be committed by your employees, suppliers and even customers and preventative steps you can take.

        Most types of fraud can be avoided by knowing the day-to-day financial details of your business. Over time, financial patterns develop which should be reviewed. Seasonality will affect activities like sales and expenses but the pattern should be somewhat predictable. Forecasts can also be valuable. Further analysis is warranted if gaps in revenue seem to develop and changes in the existing business were minimal.

        To prevent fraud, internal controls need to be implemented.  Handling and managing cash is one area where this is a must. One solution it to make more than one person responsible for doing cash related tasks. Giving too much control to one employee opens the door for potential fraud to occur. For handling cash, clear lines responsibilities should be developed.

        Employees should be made aware where their job responsibility begins and where it ends. The bookkeeper can be responsible to record all the business transactions in the company general ledger. Assign someone to deal with customers, another person who accepts money as payments for sale of goods or services, someone else who disburses payment to suppliers, and someone to do the banking and bank reconciliations each month. These are just a few of the many processes that occur before a financial transaction is complete.

        The individual responsible for a particular process should manage each process consistently.

        Having financial controls in place will provide greater peace of mind and allow you control over the solid financial management of your company.


        The Zen of Preparing for the Year-End Financial Reports C2online

        Each year as summer ends and fall is ushered in, the change in weather is accompanied by year-end preparation for many companies.


        Before December 31st arrives, usually sooner than expected, bookkeepers and employees can use this checklist to help track and create year-end financial and tax reports:

         

        1. Year-end inventory – Purchase supplies for doing the year-end inventory.  You may need racks, crates or boxes for finished products or labels for the items when doing the physical inventory count. You can even look for temporary storage units if necessary.  Develop a schedule for kicking off your inventory count.  Note the number of staff you’ll need to get this job done.

         

        2. Tax Forms – Check to see which tax forms you’ll need for your year-end. Make a list to keep tabs on all the paperwork required.  Take note of all the needed supporting documents.

         

        3. Tax and other licensing requirements – Begin a tax and licenses review.  Diarize all important dates for taxes and business licenses renewal or face late penalty charges.

         

        4. Ask employees to update all their tax exemption requirements – Did any of your employees get married this year?  Did any employees have a baby or adopt a child?  Ensure their exemption status is updated so that they don’t get over-taxed

         

        5. Begin creating next year’s budgets – Start a list of all potential capital expenditures next year and the associated costs.  This is a good way to avoid over-spending. Developing budgets for next year encourages communication between all departments so plans can be made for the upcoming year. 

         

        6. Analyze your financial reports for the previous months - The end of the 3rd quarter of the year is the best time to re-assess your financial position to determine if your business will be in a profit or a loss situation at the fiscal year-end.

         

        Keep on track with this checklist and be ahead of the game with your year-end!


        7 Tax Tips That Can Save You Money C2online

        Taxes and death are inevitable. We can’t avoid either of them. But, do we really have to pay so much to settle our tax obligations?

        One way to maximize profits is to learn how to reduce taxes effectively. Any tax deduction properly recognized is a dollar saved and a dollar saved……

        Below are seven tips that small business owners can implement to save money:

        1. Plan ahead

        You don’t have to wait until the 11th hour to see the impact your transactions have on your tax obligations. At crunch time, the chances of missing important factors, like the effect of asset acquisitions on your tax declaration, may be forgotten.

        Plan ahead so you can analyze how various financial transactions will affect the taxes you pay.

        2. Entertainment Expenses

        Don’t forget to keep your receipts whenever you dine out with clients. These expenses are 50 percent tax deductible.

        Check with your bookkeeper or accountant for exceptions. For example, if you take your entire staff out for dinner (no one is excluded), then the deduction is 100 percent.

        3. Home Office Expenses

        If you operate a home-based business, you can include some expenses related to your home office for tax purposes. This may include rent, utilities, repairs, etc. The idea is not to charge the full amount but a proportionate amount in relation to the size of your home office within your house.

        4. Expenses incurred for doing business

        Once you incur any expenses in the course of doing business, no matter how small, be sure to record them and keep all your receipts. Many of those expenses may be tax deductible. Check with your accountant or bookkeeper. Even small tax deductions add up.

        5. Pay family members’ salaries

        If your teenage daughter does simple administrative tasks, or your spouse helps you manage the business, make sure you pay them a salary. You should be able touse these expenses as tax deductions.

        Of course, you should pay them an amount that has a value in direct proportion to what they do. Paying them more than what is reasonable just to get away with paying bigger taxes can cause problems with the taxman.

        6. Depreciation expenses

        You can amortize most capital expenses by allocating depreciation amount based on the useful life of the asset.

        Be sure to talk to your accountant about the best amortization method and how it could impact your income statement and balance sheet in the long run.

        7. Hire a professional accountant

        If you are thinking about cutting costs you may want to hire a professional accountant. The value of their expertise may far exceed the amount you pay them in the short term.

        Keeping your financial statements in order is an important part of your business. Working with an accountant and following their recommendations will help you increase the profitability of your company.

         

        Photo credit: forwardcom  


        4 Reasons Why You Should Hire a Bookkeeper C2online

        Bookkeeping   

         

         

         

         

         

         

         

        If you are starting a small business it is important to keep expenses to a minimum. Profits will happen eventually but often not within the first few months.

        Some business owners will try to cut costs by not hiring a bookkeeper. Instead they will get admin staff to manage the financial records. Although expenses are reduced in the short term this could be a mistake.

        Off-the-shelf accounting software may be easy to buy but it isn’t necessarily easy to use - properly. By hiring a good bookkeeper you will avoid some mistakes listed below.

        1. Invoicing Incorrectly

        Incorrect invoicing may entail a lot of extra time reconciling your products sold or services rendered, thus resulting in inability to collect from your customers on time. Also, if not done on time, invoicing can strain your cash flow.

        A good bookkeeper will ensure that invoices are correct and prepared in a timely manner. They can also monitor “aging of accounts” to make sure that receivables are collected from customers on time.

        2. Unknowingly Missing Deadlines

        There are specific dates for filing your taxes and other requirements to the government. Missing a date,
        no matter how unintentional, can cost you penalties and other charges. With a good bookkeeper, the
        only thing that you have to worry about is getting all the pertinent information to them on time. They’ll
        take care of the rest.

        3. Incorrectly Classifying Items for Taxation Purposes

        Tax laws are revised and updated periodically. What is classified as an item under a particular tax
        bracket or rule may change.

        A good bookkeeper is always abreast with the latest tax rules. They also have a clear understanding of
        items that may be tax deductible for your business. Trust your bookkeeper and take advantage of their
        knowledge. In the long run you will save money and headaches.

        4. Lack of Know-How in Using Accounting Software

        Inaccuracies in handling the accounting side of the business can potentially lead to more losses than you
        think - Not to mention government penalties. It sounds obvious, but accounting software works best if
        the correct data is inputted. What you put into the system, is proportionate to the output.

        A good bookkeeper understands this perfectly. The advantage for you is that you don’t have to worry at
        the end of your fiscal year.

        Ensuring proper handling of your company’s bookkeeping needs is paramount to your business success.
        Doing bookkeeping by yourself may prove to be not only dangerous, but even fatal, for your business health. 

        Photo Credit: psd


        5 Tips on How to be a Good Client for Your Bookkeeper C2online

        We recently looked at the characteristics of a good bookkeeper. But what about being a good client?

        As a general rule, a bookkeeper will be more diligent with the clients that they love and respect. So what do you need to do as a client to get the highest level of performance from your bookkeeper? Below are 5 tips for you to remember when working with your bookkeeper.

        1. It's Not Their Fault
        Bookkeepers can make mistakes - they are human - but not that often. Bookkeepers love what they do because they have great attention to detail and they like to see things add up correctly and balance. Often they are quick, as well as being thorough. As a rule, they are hard wired to do things right.

        Most likely the blame for incorrect entries and 'mistakes' are because of miscommunication or misunderstanding. So try your best to understand what your bookkeeper needs.

        2. Send Material on Time
        We all live with deadlines. Bookkeepers have lots of deadlines for multiple clients so be aware of when they need things such as getting bank statements from you.

        If you have specific dates in a month when you want to review your financial statements, let your bookkeeper know. They will let you know what their requirements are to deliver on time.

        If you don't know ask. If there is a mix-up, write an email to make your needs clear.

        3. Listen to Suggestions
        Bookkeepers know what they are doing and they work with lots of clients. They know how to improve processes and how to make things run smoothly. Ask for suggestions, listen, and be sure you understand their suggestions. You will learn a thing or two which will help to improve the bottom line.

        4. Pay Your Bills on Time
        No one likes a staler. If you want great service from your bookkeeper then be sure to pay them well and pay then on time. Just do it.

        5. Show Your Appreciation
        This is obvious but so easy to forget. Show your appreciation for all the things your bookkeeper does and the effort they put in to deliver your books on time - consistently. You don't need to do something special every month but what about every quarter or twice a year.

        Your appreciation could be a simple phone call to say thanks or maybe a gift certificate for two at a nearby restaurant. Who doesn't like eating out once in a while?

        We hope that these suggestions are helpful to you as a client who has hired a bookkeeper. Make a comment and let us know what you think.


        Don't Overestimate Your Emailing Skills - Time to Brush Up On Your Email Etiquette C2online

        We've talked about how important communication is in bookkeeping in one of our previous blogs, Stand Out as a Bookkeeper: 10 Tips for Superior Communication Skills. If you're operating your bookkeeping business out of the house (or anywhere, really) email is most likely your most common form of communication with your clients. 

        Email is like an old and faithful friend; it certainly hasn't gone anywhere and doesn't seem to be fading away. But because it's been a common tool for so long now, have we forgotten our etiquette? Are we so focused on tweeting that email has fallen to the back burner? We thought a refresher on email etiquette wouldn't hurt - especially if it's your dominant communication medium.

        Your Professional Email Address

        It all starts here since there isn't much emailing without it. Your email address is like a first impression so it should be professional; a branded email account linked to your business. Something like, imaproudsoccermom_97@hotmail.ca, won't do you any favours so keep the cutesy stuff for your personal account. If you have a website with your own domain, use that for your email. If not, you may want to consider paying for domain name registration and hosting. Or use Google Apps for Business which allows you to use an email address with a domain, as well as other business tools.

        To, Cc, Bcc - Who Goes Where

        'To' is the direct recipient(s). Seems simple enough but there are still some tips to keep in mind. If you're sending to a group, don't put your entire address book into one email. It's an eye sore to have an endless string of email addresses in your message. As well, if you're sending out to a group who don't know each other, they may not want their email being shared with the masses. Consider sending separate emails or use bcc.

        Cc is carbon copy for recipients who are involved yet the email is not directed towards them. Consider who is being cc'd and if they need to be included in the email. 

        Bcc is blind carbon copy. The direct recipient won't see the bcc so it's a bit sneaky. Basically, this is used to keep someone in the loop. They're not involved in the conversation and it's not necessary for the recipient (for whom the email is directed to) to know.

        Subject - A Strategically Chosen Few Words

        This needs some good content so don't leave it at "Hi." For business purposes, ensure the subject is meaningful and reflects the content of the message. A lot of people rely on the subject line to look for past emails and for filing them.

        The Crux of it All: The Message

        Various aspects of the message to be aware of:

        • Tone. First, consider who the recipient is. Do you know them well? Is this a new client? This will set the tone of your email which is hard to do since this can get lost in an email. For example, if your message is too short. If you're too much to the point and don't take any time for salutations or closing, you can come across as terse. And then there's the all caps. STOP YELLING AT ME! All caps implies yelling and most times, is not well perceived by your reader. Best to avoid it.
        • Length. If it's too long, you'll appear as rambling on. Your reader may lose interest and your message will get lost in the rambling. You want to get your point across but not be terse (it's a fine line…).
        • Spelling & Grammar. Your professionalism shows in your writing. Use proper sentence structure and correct spelling. Email is not a tweet. Or a text. Avoid slang, abbreviations and acronyms that look unprofessional. Anything beyond FYI may lose your reader.
        • Formatting. This will help you get your message across. It will make it easy to read by laying it out properly with paragraphs, bullet points, etc. An organized message will also make emailing more efficient: if the recipient understands you, it pre-empts further questions and eliminates unnecessary back and forth emails.

        Email Tag Alongs: Attachments

        Ensure that whatever you're attaching to your email is relevant and useful. Try to limit the number of attachments by collating them, if possible. Check the file size and compress it before sending - nobody wants a 7MB incoming email bogging down their inbox and freezing up their system. And don't forget the attachment(s) when you send your email… this is where proof-reading will help you.

        Following Up With Email Replies

        All the same rules apply as above. When replying to an email, check that you've answered all of the questions in the original email. Don't give your client the impression that you're not interested in them or giving them the time they deserve. In their minds, if you're brushing over their emails, what else are you brushing over?

        Reply All. Use this carefully and think about who needs to see your reply. Just because you were sent a message with other recipients doesn't mean everyone needs to see a reply from you. And—very important—do not hit 'reply all' when you've intended to hit 'reply.' You can accidentally send something that shouldn't be seen by someone and could get you into a lot of trouble. Always check before you hit send.

        Brushing up on your email etiquette will help you maintain a good email relationship with your clients. So don't overestimate your emailing skills and underestimate the importance of good communication. 



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