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What Makes a Good Bookkeeper…. Good? 10 Tips for Finding a Superstar Bookkeeper C2online

We've talked about it in our previous blogs because it's something that every small business owner has to think about. Do you do your own bookkeeping or look to outsource it? It's an important decision because there's no getting around having to manage all the paperwork that comes with running a business. For a lot of entrepreneurs, there eventually comes a time when you have no choice but to invest in a bookkeeper.

But what should you look for in a bookkeeper? What makes a good bookkeeper… good? Here are 10 tips for what to look for in a superstar bookkeeper. 

1. Education and Qualifications

These are some of the main factors that you need to consider when choosing your bookkeeper. There are three types of certifications in Canada:

  • The Institute of Professional Bookkeepers of Canada (CPB - Certified Professional Bookkeeper)
  • The Canadian Institute of Bookkeeping (CB -Certified Bookkeeper)
  • The Canadian Bookkeepers Association (RPB - Registered Professional Bookkeeper)

If you want your bookkeeper to have payroll responsibilities, you will want someone who has at least a minimum certification level with the Canadian Payroll Association. 

Are they accredited by a professional association? Bookkeepers who belong to a professional organization have to abide with a code of ethics, plus you can contact the association itself in the event of a problem. 

Ask if they're doing any continuing education with additional classes or self-study. This will show their commitment to enhancing their skills and staying up to date. 

2. Experience and References

Education and training are important, but there is no substitute for experience. And even better, experience with small businesses in your particular area of business. Certain industries call for specialist knowledge and an understanding of the particular issues involved. Avoid bookkeepers who mainly work with big corporations; the issues that come up for small business are different than those that a bookkeeper would encounter with larger companies. Look for three years of full-time experience providing full-cycle bookkeeping to businesses similar to yours. 

Candidates should substantiate their claims through references. Small business clients can vouch for a bookkeeper’s timeliness, quality of service and their personality. Also ask for references from professional accountants they've worked with who can comment on their technical skills and proficiency. These accountants will know how much or how little time they had to spend cleaning up the bookkeeper's work at year end. This is also important if you already have an accountant that you want your bookkeeper to work with—check that the candidate has had good working relationships with these accountants.

3. Detail-Oriented

It's no coincidence that this is at the top of the list. It is one of those essential traits that a good bookkeeper should have and you should be looking for. Detail-oriented bookkeepers have the level of accuracy and precision that the work requires. Someone who wants to categorize every expense item as “miscellaneous,” for instance, isn’t going to do you much good at the end of the month. Being thorough in your documentation is critical to accurately reporting your financial information. Attention to detail is a must! If they come across as frazzled or disorganized, it's time to move on. 

4. Analytical Skills

The other essential trait you're looking for is their analytical skills. Once your detail-oriented bookkeeper organizes the information, they now need to analyze it. Part of their job is reviewing and deciphering this information to help you make important business decisions. Analysis of financial documents is crucial and a good bookkeeper will be able to do this well.

5. Time Management

A good bookkeeper knows how to organize their time for optimum results. They should be able to prioritize, allow time to focus on problems and solutions, and schedule frequent reviews and updates with you. If they have good time management, they will be proactive and complete tasks with a deadline such as monthly financial reports, filing taxes, claims, etc. And if problems arise, you need to know that your bookkeeper will inform you in time to do something about them. It doesn't do you much good if you need to be constantly checking up on your bookkeeper because they don't have the time management skills required for the job.

6. Excellent Communication Skills

This isn't something that is normally associated with people who talk of debits and credits, but the best bookkeepers are more than silent number crunchers. Unless you already know the ins and outs of the finances of your business, you are relying on your bookkeeper to relay this information in a manner that you'll understand. You should be making business decisions based on your finances and you must have a bookkeeper that can communicate this information so that it's useful and meaningful to you.

7. Passion and Personality

These are the less obvious personality traits that you should also consider. First, your candidate must love numbers and have a clear understanding of math. There are no maybes in summing up totals or calculating balances. And don't underestimate personality. It's not a trait most people look for in a bookkeeper but you're forming a relationship with this person to talk about what's going on in your business and what the numbers show. It's important to find someone who you can get along with and relate to.

8. Trust and Security

You are sharing sensitive financial information so client confidentiality is crucial. It only makes sense that you trust the person you're handing over confidential numbers and bank account information to. Ask what security and privacy measures they have. Is the data that they hold for your business secure?  

9. Technically Inclined

Today’s bookkeeping is automated, even for the smallest of businesses. So it doesn’t make sense to partner with someone who is not technologically inclined. They should be familiar with Word, Excel, email, the internet and some kind of bookkeeping software. Bookkeeping software allows for much simpler, faster, and more sophisticated analysis of your company’s information. It will also improve the productivity and performance of your bookkeeper's work. (More efficient work means less hours charged to you!) The right bookkeeper will have the skills to accomplish this. And your financial data should be kept on a hard drive, not on a shelf.

10. Rates

At the bottom of our list, but hardly an insignificant question, is how much they charge. And what does this include? Rates can be a wide range anywhere from $15 per hour to $100 per hour depending on their skill level and experience… as well as the complexity and volume of work your business requires. Some bookkeepers will offer fixed fees per month. With bookkeeping, as with most other services, you generally get what you pay for. Ine
xpensive rates can turn out to be more expensive if the bookkeeper takes more hours than someone at a higher rate. Remember that this as an investment that will save you more money over the long run.

Ask about any additional costs such as:

  • Set-up fees. Setting up a new client can be a very time-consuming process so get a cost on this.
  • Retainers. Some bookkeepers charge in arrears for their services.
  • Miscellaneous charges. Ask about additional charges for photocopying, printing, files, binders, courier, faxes, etc.  

Preparation, knowing what your business' requirements are, and knowing what to ask candidates will guide you in your search. Put the time and effort into finding that superstar bookkeeper - it will benefit you and your business in the long run.

We have a new directory to assist you in your search. C2online's North American Bookkeeper Directory: www.c2online.ca/BookkeeperDirectory.aspx



Bookkeeping Basics for the New Entrepreneur and the 5 Mistakes You Need To Avoid C2online



As a small business owner, are you in touch with your finances? And I don't mean just an income statement and filing your taxes. Are you really in touch with the ins and outs of your business' financial operations? As an entrepreneur of any type of business, whether you're running a bakery, starting a coffee roasting company or offering dog walking services, you can't live without financial management. It's an essential part of your business operations.

To have good financial management, you need good bookkeeping. So what exactly is bookkeeping and why do you need it? Bookkeeping is a system of recording the financial transactions of a business. It looks at all aspects of the comings and goings of your cash flow and transactions. Here are some basic bookkeeping terms defined: Basic ABC's of Bookkeeping

Small business bookkeeping is necessary for a couple of reasons:

1. Record data, organize it and prepare financial statements.

You need to track your revenues and expenses and record this information in an organized manner with a chart of accounts. This is where you file away all of your business transactions (expenses, income, assets, liabilities, equity, etc.). With this data, you'll need to prepare essential statements, and of course, for tax time to file your tax return and make claims.

2. Management & Growth of Business

Owners should understand that bookkeeping is not just about paying taxes or reporting results. Management and growth is an area of financial management that can be easily overlooked by business owners. This takes time and for most entrepreneurs, time is not readily available. However, if you want to give your small business the best chance for success, then you can't overlook this. Think about it. With the financial data you've recorded and organized, you now need to analyze how aspects of your business are performing, and create valuable reports to guide your business.

Now that you have a basic understanding of bookkeeping and why you need it, we want to get you off to a good start. So keep these in mind:

5 Small Business Bookkeeping Mistakes to Avoid

1. Save money on bookkeeping.

One way to save money is by doing the bookkeeping yourself, manually. Yes, it can be done. But it takes time. And if you want to do it properly, it takes a lot of time. Unless you're an expert at Excel—a topic we discussed in a previous blog: Why Excel May Be Bad for Your Business—you need to invest in some other options. You can purchase a software package, invest in online bookkeeping software, or hire a bookkeeper.

2. Not making informed decisions based on your numbers.

You need to understand your finances and make decisions based on solid financial management. Your financials are an essential tool to better manage where your business is headed tomorrow. You need to know what's selling, what's most profitable, who's buying and who owes money.

3. Poor record keeping.

As discussed above, your numbers are crucial in so many aspects. So what good are they if they're not accurate? Don't underestimate the value of keeping good records; it will catch up with you and will misguide you if not done properly.

4. Pay attention only at tax time.

This is a mistake on multiple levels. First, you need to maintain good records throughout the year for when tax time arrives. As well, how can you make those informed business decisions if you're not continually paying attention and are staying attuned with your finances. Make it part of your daily routine so you don't fall behind. If you’ve hired a bookkeeper, have them keep you informed on a continuous basis; be in constant contact with them.

5. Make your accountant do all of the work.

An accountant essentially takes over after bookkeeping ends. You provide them with your bookkeeping and they utilize that information for their services. So if you don't want to spend a lot of money on an accountant, you must send the necessary business documents and information to your accountant in an organized way. (Hence, having good record keeping.) Missing documentation will slow them down and cost you money.

You want to get your new business off to a good start. Even if numbers and financials are not your area of expertise (and quite frankly, makes your head spin), don’t forget to still give it the attention it deserves. The success of your business depends on it.


Why Excel May Be Bad For Your Business C2online

Many companies are using MS Excel for their bookkeeping needs and services. It makes sense because the program already comes bundled with the PC you bought, so it’s cheaper than buying bookkeeping software. And really, if your current bookkeeping system utilizes shoeboxes and file folders, then Excel would be a huge improvement for you.

However, when it’s time to move on from the most basic of cash book type record, you’ll need a proper bookkeeping tool that’s built for your needs. As business grows, it also outgrows the use of Excel for bookkeeping.

Here are some common arguments for using Excel… and the problems associated with them.

It’s familiar and I already know how to use it.

Sure, most users know how to do some of the basic tasks but Excel is not simple and the more advanced features require some proper learning and experience. A bookkeeping software is already set up for all the normal accounting things one will need to do.

I can create almost unlimited reports and graphs.

You’re free to do anything you want with your data; there’s a whole range of financial and statistical functions, formulas, charts, and numerous ways to analyse your data. However, you can end up with multiple worksheets, complex formulas and a headache trying to figure it all out.

It’s free because it’s already on my computer.

If not used properly, it could be a waste of time… and money. Because Excel is so complex, there is a steep learning curve to becoming proficient. There is also a huge potential for error with every formula, data entry, calculation, and so on. This inaccuracy could cost your business a lot of money. Sometimes what looks like the cheaper or simpler option may turn out to be the opposite in the long run.

Everybody has Excel so I can easily share it with others.

Excel can be very difficult for others to interpret and understand. There is little consistency between spreadsheets produced by different people and therefore can be extremely difficult to understand the logic of a spreadsheet created by another person.  

So many people use Excel, it must do everything.

There are functions that Excel can’t provide like audit trails, invoicing, bank feeds & reconciliation, contacts, payroll, time billing, reports and more. You could probably create a workable solution for some of these functions but it would take a lot of time and training.


There’s nothing wrong with Excel if it works for you. Have a look at your business and your goals and decide if you should you should be using this program or if it’s time to move towards a dedicated bookkeeping software.

HIRING CREDIT FOR SMALL BUSINESS (HCSB) Lisa Patrick
For 2011 and 2012 Canada Revenue Agency is granting up to $1000 credit on employment insurance premium of your employee costs.  HIRING CREDIT FOR SMALL BUSINESS. (HCSB)

The HCSB gives small businesses relief from the employer's share of employment insurance (EI) premiums paid in a year. It does this by crediting up to $1,000 on the payroll account, based on the increase in an employer's EI premiums paid in one year over those paid in the year before. 

Canada Revenue Agency is doing the paperwork to determine your qualifications: HIRING CREDIT FOR SMALL BUSINESS. (HCSB)

There is no application form to complete.

If you are eligible, the CRA will automatically calculate the amount of your HCSB using the
EI information from the T4 slips you filed with your 2010 and 2011 T4 information returns.
The amount to be credited to your payroll account will be greater than $2, but no more than
$1,000.

For more information, please search the following link at Canada Revenue Agency.
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/hwpyrllwrks/stps/hrng/hcsb-eng.html
HCSB for 2011 <http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/hwpyrllwrks/stps/hrng/hcsb-2011-eng.html#business_income>
HCSB for 2012 <http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/hwpyrllwrks/stps/hrng/hcsb-2012-eng.html>

DO REMEMBER TO INCLUDE THE CREDIT TO YOUR EMPLOYER REMITTANCES OR YOU WILL NOT BALANCE WHEN YOU DO YOUR T4 SUMMARY.
HCSB is business income

Remember, If you receive the HCSB, you have to claim that amount as income or reduce your EI expense when you file your business return, even if we transferred some or all of this credit to pay off a debt.

Contact us for more information

 

Darlene Lafond R.P.A.


16 Business Points - For Small Business Owners and Small Business Bookkeepers Lisa Patrick

When you developing your business or you are compiling your information for bookkeeping as a bookkeeper or as a small business owner, several discussions generally can occur with your accountant.  Several discussions and facts you may need to know are listed below.

1.                  GST registration compulsory after any 12 month period of $30,000 of revenue.  1-800-959-5525 government business enquiry line.

2.                  If you are using space in your home for work or business there is the opportunity for you to receive rent or just a reimbursement of what it cost.  C2 Online provides a word document for free; office in home.  C2online also provides an excel document that calculates the inputted amounts and provides a total.  The cost is $4.95 on our website www.c2online.ca

3.                  You use a cash account - treat amounts paid by cash like another bank account.  Name it “Your name” in the company books.  It is used for items paid by cash and other proceeds not actually company money but a person’s name.

4.                  You use a charge account - treat amounts paid by charge card like a bank account in the company books, use one charge card specifically for the company purchases.   The interest charges are an obvious business expense.  When company expenses and personal charges are mixed together, it is a huge exercise to determine what interest is business related.  If you require a ledger for this purpose C2online has a tool for $2.95, interest for business purchases on statement.
           
5.                  Construction companies are required to file a T5018.  This must be filed by the 6th month after the year end.   Do the contractors information slips based on January to December and file it by June 30.  Go to link at the government website…
t5018 contractor payments.

6.                  How to handle meals claims:
a.  shift exceeding 12 hours could include travel time = one meal a day write “shift over 12 hours” on receipt
b.  client visit: write “client name, agenda, time” on receipt
c. over night travel meals write “client name, agenda” on receipt

7.                  How to maintain a vehicle log of kilometers traveled.
State the date of use, how many kilometers, reason for travel, destination of travel.

8.                  How to deal with tools and equipment and supplies owned before the company started.  Some of these items would be start up costs and some would be fair market value.
In regards to the start up costs – when did the company start ?  At the time you incur expenses with expectations of generating income. 

 

When you have supplies for start up not processed through the company bank: use those receipts and use the cash account.

 
When tools and equipment for start up processed through the company bank: use those receipts and use cash account.

When owned and used for other relationship before business: Supplies listed at fair market value not processed through the company bank, use those estimated lists or estimate receipts and use cash account.

Tools and equipment listed at fair market value processed through the company bank: use those estimated lists or estimate receipts and use cash account.
 
9.  Financial reports necessary to do year end: To do a quality control always provide summary reports that show totals only for the first visit about the report.

Profit & loss, balance sheet, summary of trial balance:  Print the detailed trial balance (all accounts report) when we are completed so you have a print out of all the accounts from start to finish of year.  This detailed trial balance report (all  accounts report) is only needed once entirely for government backup.

Financial statements defined briefly:
A balance sheet: Provides an account of what the company actually owns & owes
An assets: is what the company owns.
Current assets are bank, charge cards (sometimes a negative asset), cash accounts
Capital assets(fixed) are equipment & vehicles & tools & furniture, other assets (not usually a physical touchy feely thing) incorporation costs or franchise agreements.
Liability is what the company owes.  

Equity is net value of ownership.
Profit & loss: (income stmt) is the operating accounts that show how much you made and how much it cost to make it, including depreciation (capital cost allowance) of 20% or 30%, of fixed assets.
Business packet handout - statement of professional & business activities provides accounts for persons with business.

General index of Financial information (GIFI) is for corporations.

10. Employment insurance now offering a program for self employed people.
Employment Insurance Benefits for Self-Employed People <http://www.servicecanada.gc.ca/eng/sc/ei/self_employed_workers.shtml>
 
11. CPP contributions are paid:
a.         when you file your taxes as a partnership or proprietorship business; by a compulsory automatic calculation on your net profit.
So when you have a tax return completed, this return will combine the cpp and tax (federal & provincial) on one bill thru your sin number

b.         when you are actually working for your corporation.  Paid by the corporation through a payroll and eventually recorded to you through a T4.
A corporation business has to remit employer payroll remittances in order for this to be paid to their social insurance number for tax or cpp.

12. Tax pre - payments (installments) through your social insurance number.  When no net income estimate available, - consider 15% of all earnings as an installment.
That paid to your social insurance number at Canada Revenue Agency will also help pre – pay your Canada Pension Plan payment.
 
13. Three essential bookkeeping points:

  • Match what the paper work to what you claim.
  • Balance the account that the paper work is from.
  • Consistency with what you do with what paperwork is essential to compiling the totals to the accounts.

13. Four mistakes you can make in bookkeeping:
      1. Most mistakes in bookkeeping by owner.
      2. Claiming too much business use of a shared personal and business use item
      3. Claiming a purchase of equipment or tools, as 100% instead of treating like an asset that (capital cost allowance- depreciation applies)
and vice a versa, claiming an expense as equipment, like a tire purchases are repair and maintenance
     4. Claiming a meal expense in wrong account -  meals paid with a hotel receipt when traveling for business is still meals.  Always claim the meal expense in its own named account, for instance; meals & entertainment, meals – travel, meals – staff, meals for living out.  Do not put meal expense under travel – meals must be identified as meals.  The tax accountant may need to complete an income tax & GST adjustment.  (50% may be disallowed)

14.       www.cra.gc.ca  free forms, courses, General Index of Financial Information, and Business Guides.
 

15.       Government seminars for small business
Edmonton     Alberta - Events <http://www.cra-arc.gc.ca/vnts/ab/menu-eng.html>
·        
GST/HST New Registrant Seminar <http://www.cra-arc.gc.ca/vnts/ab/dm-gst-eng.html>  
·        Small business information seminar <http://www.cra-arc.gc.ca/vnts/ab/dm-smll-eng.html>
·        Tax Information Sessions <http://www.cra-arc.gc.ca/vnts/ab/dm-nf-eng.html>  
·        New Employer's Information Session <http://www.cra-arc.gc.ca/vnts/ab/dm-nw-eng.html>
·        Taxable Benefit Information Seminar <http://www.cra-arc.gc.ca/vnts/ab/dm-tbis-eng.html>
·        SR&ED Public Information Sessions <http://www.cra-arc.gc.ca/txcrdt/sred-rsde/cntcts/srdpr-eng.html>


16.  Office Appointment types…
If your yearend totals are ready for tax prep, your appointment scheduling type would be for taxes and yearend.
 
If you need the totals or adjustments in your bookkeeping totals for the year and you have some questions, you appointment would be for year end only First.
 
If you know you need bookkeeping adjustments made, your appointment would be for a bookkeeping meeting.

 

Darlene Lafond. R.P.A., C.P.C.

 


Revenue Canada taking too much money from you? Lisa Patrick

 Your accountant should be providing you strategies. In fact, if you don't take the time to analyze your business you could be missing out on thousands of dollars in business tax deductions and thousands more in savings.

Most accountants don't utilize the tax deduction offered from CRA for a convention for your business. Part of the problem is that you must have the paperwork to coincide with your vacation to prove that while you vacationed you worked on building success in your business.

All you need is some multiple choice agenda's that deal with the day to day operations of your business. We provide the tools necessary to deduct your vacation 100%. All you do go on your vacaction, fill out your agenda's and return them to your accountant for your deduction.

To leaarn more and to start saving money click here.


Biz-Boom: Maintain and Grow your Business to Success Lisa Patrick

 

Dan Sumner Economist from ATB, will provide insight into the current state of Alberta’s economy and what we can expect in the future.

Also in this seminar you will learn more about proven business strategies and free & fee business tools and templates that assist you to position your business financially for success.

Some of the topics discussed:
1. Is my business set up properly and am I receiving the most tax advantages possible.
2. Tax Tips - how to save more of your money.
3. Business tools and templates.
4. How to read a financial statement.

Gladys Molly from ATB Financial will be providing an overview of business banking options to suit all business industry's.

 

R.S.V.P. Now


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