Tools To Keep Your Small Business Safe

Are you among the small businesses that have not put thought into Worker’s Compensation and the Occupational Health and Safety Act?

If you haven’t, remember, it’s not only the law but the right thing to do! Don’t wait until there is an accident. BE PROTECTED!

If you have employees, no matter the environment they are working in, you should be inquiring with the Workers' Compensation Board.

Here is a quick Small Business Safety Toolkit provided by the WCB in Nova Scotia. See what the law requires from you and go from there: http://www.workplace-safety-toolkit.ca/toolkit.aspx

Link to Canadian Tax Packages for All Years

Each package includes the guide, the return, related schedules, and the provincial or territorial schedules, information, and forms (except Quebec).

Click here to access this resource on the government of Canada website.

Bookkeepers and Accountants Are Not the Same

Your successful small business needs both a bookkeeper and an accountant. And there’s a reason why they won’t be the same person.

While some skilled bookkeepers and accountants may, in fact, be capable of doing each other’s work, an accountant’s services cost considerably more than a bookkeeper. There are other significant differences to be aware of.

A bookkeeper helps you maintain the ongoing financial recording of transactions to keep your business running smoothly. Specifically, they might:

• Process and record invoices, receipts, payments, and other transactions
• Process transactions for payroll and maintain those systems
• Set up, maintain and review accounting systems and processes

Some bookkeepers (including me) may also look after these additional activities for you:

• Reconcile accounts and prepare reconciliation reports
• Manage accounts receivable and accounts payable
• Prepare working financial statements

An accountant, on the other hand, provides analysis and professional advice, and keeps you compliant with laws and regulations. Specific activities which an accountant might do are:

• Analyze performance and create financial projections
• Provide tax advice and planning
• Help with new business set-up
• Audit records for compliance
• Prepare financial reports
• Give financial management advice

Both roles are extremely important to the success of your small business. They need to communicate well with each other in order for you to maximize on their contributions.

Can You Negotiate Lower Prices From Your Vendors?

Missed opportunities result from complacency. Occasionally questioning the prices you pay for products and services makes sense for businesses of all sizes. The trouble is that small businesses are more likely to lack the skills and experience to do this.

"What you've been paying your vendors does not have to be the final word on what you continue paying. Ultimately, vendors want to stay in business, too, and they're dealing with a tough economy just as you are. Many are often willing to negotiate lower prices rather than lose a regular customer."

- Ian Aronovich, GovernmentAuctions.org

An article by Kevin Brown on Hubspot's blog offers several excellent tips for negotiating better deals with vendors. Here are a few highlights:

• You don't know what you don't know. Do background research.
• Learn what the other person needs most.
• Recognize that for most companies, keeping you as a customer is cheaper than gaining a new customer. This is leverage in your favour.
• Start when there is no deadline to avoid negotiating under one.

Most importantly, recognize the fine line that will keep the negotiations from impacting your long term business relationship.

How long has it been since you reviewed the prices you pay to your key vendors? Perhaps it's time.

Are You Unknowingly Part Of The Underground Economy?

"Can't I just pay my employees with cash?" We still hear some version of this question now and then.

Moonlighting or "working under the table" is the basis for the underground economy in Canada. According to the Canada Revenue Agency (CRA), this can include:

bartering, failing to file tax returns, omitting an entire business activity from your tax return, skimming a portion of business income from what you report on your taxes, and not reporting a portion of employment income, like tips and gratuities.

CRA is actively searching for and fighting these activities. Click here to read more about this important topic.

If you aren't sure if your small business might be unknowingly contributing to the underground economy, stop now and give it some serious consideration.

Do you have questions about how to set up your small business so you can keep yourself safe? Get in touch.

Beyond Data Entry

It’s good you’ve invested in having someone (an employee or a contractor) dedicated to doing your routine entry of invoices and vendor payments. You’re too important to your business to do that stuff yourself.

Now that you aren’t seeing all the details, though, you might be finding it more difficult to make decisions about day-to-day operations and expenses.

Perhaps there’s another role you need to fill: someone to do your payroll, reconciliations and monthly financial statements. If you have a qualified, experienced person looking after these activities, they can help get your head out of the trees and help you see the forest… with valuable insight on how your business is doing. A good person in this role will notice concerning trends and bring them to your attention before they become a problem.

Where can you find such an experienced person? Ask me... or your accountant.

Should I Buy or Should I Lease My Next Vehicle?

As a business owner, I have debated this question many times over the years. I have both leased and purchased, and I like to get a new vehicle every 3 or 4 years... whether I really need it or not.

My advice about making this decision is: speak with your accountant.

There are many ways to handle both the usage and the HST (Nova Scotia) you can claim. Factors, such as whether you are a Sole Proprietor or Corporation, will impact this decision.

• Purchased vehicles become assets and part of your net worth.
• Lease payments become expenses which can be written off using the CRA rules.

Lease payments are generally lower than your payments if you buy, which makes them attractive. Buying might have higher payments but you are making payments on an asset that eventually will be paid off, meaning you will be debt free until you require a new vehicle.

Ideally you don't want to take out a loan to pay off a vehicle that is not expected to last at least as long as the term of the loan. Dealerships may offer longer terms for repayment to make you think the cost is reasonable (smaller payments), however after 5-6 years, the warranty is gone and problems start. A vehicle will depreciate if it's an asset, and generally by 30% in the first year.

Leases have mileage limitations so, based on your future use of the vehicle, this must be considered. There are also penalties if you wish to get out of a lease sooner that its term. Sometimes the lease rates are higher than purchase rates.

Here is a calculator from CRA which will help you compare the costs.