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.

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.

Options for Financing Your Small Business Growth

Have you ever been in a situation where your company is in a growth cycle? Notice how the cash flow becomes such a challenge? If you don't have the cash to purchase the goods up front, or cash to make payroll prior to getting the job completed and paid for, what do you do? If you don't do the project, how do you grow. It can be pretty stressful and tough to get through.

There are options out there. I know because I have been in this situation.

What was that? You say the banks turned you down because they wanted security... in cash? If we had the cash, we wouldn't need the bank!

There is nothing wrong with getting the help you need to get some working capital - as long as the funds are used for the purpose you are borrowing them for.

Resources are available through your local branches of CBDC and BDC. Their interest rates might be a tad higher than a bank, however they are the easiest people to deal with on repayment plans, longer amortization periods and, if you need to take a break for a month, they are just a phone call away.

Depending on the relationship, you might also get financing for a single project. Then, when you have been paid for that project, you can pay off the loan; or you can keep making payments and use the extra cash to finance another project.

There are also resources through the federal and provincial governments to assist with employee skills training, and programs to hire Nova Scotians who require work experience (e.g. START, WIPSI, WEI and Skills Online NS. Student employment programs, such as SCEI, are also available.

Here are links to some Province of Nova Scotia financing options:

• http://workplaceinitiatives.novascotia.ca/workplace-eduction/
• http://www.coursepark.com/ns
• http://novascotia.ca/programs/workplace-innovation-productivity-skills-incentive/
• https://novascotia.ca/programs/co-op-education-incentive/

Keep in mind, an updated set of financials is essential when applying for funding. If you need some assistance with updating your records, please get in touch!

Don't Mix Business with Personal

Here are 3 reasons why keeping your personal and business finances separate will also help keep you and your business healthy.

Finding, tracking, posting, filing, and reconciling your bank, credit card, and PayPal accounts - paper and electronic - becomes much more onerous and time consuming. You'll often have to chase down personal statements and dig through old purses for receipts to explain debits and credits. If you wait too long, the disappearing ink will confound your efforts even more. All of these things are guaranteed to make you feel overwhelmed.

Accurate information about your expenses on a regular basis will help you make better business decisions, otherwise you're flying by the seat of your pants. When your business and personal finances are muddled, you won't have a clear picture until tax time. Once a year is not the only time you need to make decisions. Inaccurate information can cause insecurity and indecision, detrimental to small business success.

If you keep your finances separate, you'll also find tax season much less stressful. Since less stress is good for your health, keeping personal and business systems separate also contributes to a healthy lifestyle. The impact of "tax stress" can be more than you might think.

If you are already suffering from these accounting ailments, get in touch. Untangling messes is one of my specialties.

5 Resolutions for Your Bookkeeping New Year

We all make promises to ourselves that in the New Year we will do things better. Here are 5 worthwhile activities that will make your accounting processes easier for yourself and your bookkeeper. These are all quick to implement or easy to stick to.

#1. Log all the important dates in your calendar.
This only takes a few minutes and might include dates for payroll input, Canada Revenue dates for HST filings, corporate income tax filings, and even personal income tax filings. Acting on these dates in a timely manner will keep your bookkeeper happy and ensure your books stay up to date!

#2. Book an appointment to see your accountant.
Do it now and meet soon. This will allow you to review how you did financially in 2016 and if there are any tax breaks you can take advantage of before filing your tax returns.

#3. If you are a person who lives with spreadsheets and tracks your expenses that way, STOP.
Get bookkeeping software to manage your revenue and expenses. Need help figuring out which application would work best for you? Please call me!

#4. Put a simple filing system in place and ditch the shoebox.
Does a box sit in the corner with receipts in it waiting to be sorted? Take just a little time to put an organized system in place - it will reduce your stress!

• In a file box or file drawer, place file folders labelled for each month of the new year. This way, your receipts will be sorted by month at the end of the year.
• If those receipts relate to bank statements or credit card statements, match them up as you go and staple them to the back of the statements. It's a great way to know if you are missing something!

#5. Finally, pay attention to your financial statements. They tell a huge story about how your business is doing. If you need help understanding these reports, give me a ring!

File HST Returns even for Zero Sales

After you register for an HST number when setting up your business, you are required by law to send in your remittances even if you have zero sales.

When you start a business, unless you are expecting sales right away, or under $30,000 in sales for the first year, you do not need to register your business to collect HST. When you do decide to register, here's a story you should know about.

A recent client of mine had registered their business two years ago with the intention of proactively looking for business. This client had not had any sales in those two years. However, when they called CRA to register for HST, the start date was backdated instead of beginning when he called. We are uncertain why. This client was then responsible to file returns for the previous reporting periods. Because they didn't know this, CRA assessed him for what they believe they owed them. They received a bill in the mail they were expected to pay. When they finally realized they had to file all the returns backdated, they filed all of the zero returns so they could claim HST on expenses they had incurred for the start up. Because they hadn't filed previously, CRA took their credit and applied it to the outstanding amount. When they called asking why they owed money on a zero sales return, CRA said it was because of the penalties for not filing his returns!

Lessons learned?

1. Always file your HST returns, even if there are no sales!
2. When calling to set up an HST account number, ensure they date the paperwork for the date you are applying. Keep an eye on the mail and check for confirmation of the reports due.
3. Although it does look professional when you charge HST, unless you are over the $30,000 mark in revenues there is no point in registering before you are ready unless you want to claim HST for expenses.

It's Risky to Make Decisions without Financial Statements

A common question I’m often asked is, “Why do I need financial statements?” The answer impacts all types of businesses – in an office tower or in a basement.

Financial statements consist of a Balance Sheet and Profit and Loss (or Income) Statement. (And then there’s the dreaded Cash Flow Statement, the thing that really confuses people.)

A Balance Sheet shows you:

• How much cash you have in the bank
• How much money may be owed to you
• How much money may be tied up in Inventory
• Assets of your business
• How much money you may owe vendors
• Liabilities for things like loans or lines of credit
• How much equity you have in your business

A Profit and Loss Statement (my personal favourite) indicates the following:

• A breakdown of revenue streams and how much you are making in each
• The direct cost of goods to sell your products or services
• Costs of the operations of your business: payroll, administrative expenses, general costs

To understand how your business is performing on a month-to-month basis, or even quarterly, you need a set of financial statements. To make decisions, you need financial statements. If you are watching your financials, unpleasant things won’t be surprises.

If you simply want to pass over your shoebox full of receipts each year to have your returns filed, you don’t need financials. But, if you want to understand how to grow your business, financial statements are highly recommended.

Just Because You Know How to Do Your Own Bookkeeping...

Are you still insisting that you do your own bookkeeping because you know how?

It is imperative that you maintain a current set of books. Canada Revenue Agency can audit you at any time with little notice. If you are not keeping up, think about the things happening around you that are causing you such unnecessary stress.

CRA is likely hounding you because you haven't filed last year’s taxes or, worse, HST and payroll remittances. They have likely decided to send you an assessment of what they feel you owe and it is due just like any other bill.

Your cash flow is suffering and now you need to take a loan out to cover expenses until your backlog of receivables and payables are cleared up. But, wait, you don't have any statements to show the lender. Your accountant is telling you to hire a bookkeeper if you can't keep up... in the end causing much stress and money that didn't have to be spent trying to get things caught up.

You haven't reconciled your bank accounts in months. Oopsie, was that an NSF charge on the last statement?

Your vendor won't ship your orders because you haven't paid for the last few. You swear you did but can't prove it.

Your clients are loving their extended credit terms! (Good for them, not you.)

Does this sound familiar? Don't try to be the expert in everything. Very few people can handle everything in a timely fashion and they are normally those workaholics we never want to be.

Just because you know how to do your own bookkeeping, doesn't mean you should.

Did You Know Your Receipts are Disappearing?

As a business owner you are required by the Canada Revenue Agency to provide records of all the transactions of your business for 7 years. They must be kept in a secure and accessible place.

Ever notice those nasty receipts printed on thermal paper that fades after a few months? Well, CRA does not care; it is you that still needs to provide proof of that receipt. All those tricks you try that Google tells you about may not work well. So what can you do?

With technology the way it is today, we don't have any excuses. You need to decide what works best for you as an individual. There are many apps, both free and for a charge, that you can use on your smartphone. These apps will take a picture or scan of your receipt and keep it either in the cloud or downloaded to your computer. Some online accounting programs have a mobile app that lets you actually store the receipt and input the information related to the receipt directly into your bookkeeping software. One such program is Quickbooks.

I have experimented with a few of these apps - Neat, Expensify, and Receipt Scanner by Num Receipts Inc. - but I don't have a preference.

Don't have a smartphone that can provide you with access to these apps? No worries, there are lots of small receipt scanners out there that you can attached to your computer via bluetooth or USB.

If you have found a great tool that works for you, please share!

Are You in Danger of Missing Your Business Income Tax Deadline?

Do you know when you are required to file income tax returns for your business with the Canada Revenue Agency (CRA)? The following is a guideline to use to make sure you file in time to avoid penalties.

If you are a solopreneur or self-employed, the deadline is June 15th whether you owe tax or not. If you owe, you should pay by April 30th to avoid interest. Keep in mind that if the date falls on a weekend or holiday, it is due the following business day. This also becomes the effective date for any spouse or common-law partners as they are unable to file without your income. There are many software applications online for free to file these returns. Keep in mind that the software won’t know all of the tax benefits you can take advantage of. For this you need the advice of an expert.

If you are a corporation, you must file your tax return within 6 months of your corporate year end, however you should pay within 3 months to avoid interest. So if your year end is December 31, you must file by June 30. If your company owes tax and you don't have the funds to pay it off, file anyway! If your filing date ends on a weekend or holiday, it is due the following business day.

For information on penalties, refer to the CRA website. In short, you want to avoid these.

Keep in mind, no matter what type of business you have, you must keep your records for 7 years in good order in case the CRA decides to audit you. Having systems in place for records is imperative.

This is Why Your Small Business Needs Revenue Streams

Have you ever taken the time to consider all that your small business has to offer? Different activities which generate revenue can be organized into revenue streams. Grouping your activities this way will tell you which are doing well and which are not - valuable information for you to use to make decisions about your business.

If a revenue stream is not doing well, you may want to drop this activity all together. Or you may want to place more focus on making it viable, such as by cutting costs, increasing prices, or doing more marketing.

Taking a new product or service to market? Include it as a revenue stream in your business plan. If you don't meet your revenue forecast in the period of time expected, it’s time to re-evaluate. Keep in mind most business plans cover a period of 3 to 5 years.

Does Your Small Business Have a Cash Flow Plan?

A key component of any business finance is a cash flow plan. Most entrepreneurs create this plan when they have to provide a business plan for capital funding for an unexpected large project that they require goods and increased staff to complete. But don't wait!

How about on a day-to-day basis? Do you know how to plan to pay your vendors and staff, or even yourself?

Yes, having a successful business certainly helps! But keeping track of how much money comes into your business and how much has to go out - and WHEN - is key. A proper cash flow plan will help you make decisions, such as:

• how you can afford new employees, and possible capital expenditures to grow your revenue
• how to prepare for fluctuations in revenue
• the best way to receive money from your clients
• how best to fund unexpected large projects

Freedom Comes from Hiring Experts

There is a belief among small business owners. They believe by doing everything themselves they can save money and time. I am here to tell you - by experience - this is wrong.

After running a small business for over 10 years I have learned that I am capable of wearing many hats but it's best to let those who are experts in their fields work for you. A business owner who is chief cook and bottle washer will have challenges growing their business.

You probably believe you can do your bookkeeping and taxes because you know how. And that's great. Then the challenge becomes time. Accounting work is time consuming, generally error prone, and subject to deadlines. If you are not up to date, CRA is on your back and you have no clue how your business is doing. Very risky!

There is no greater freedom than the feeling of letting go of some of those responsibilities. Hire an expert to take care of it for you, whether it's your accounting, marketing, sales, HR or the many other experts who can help you run your business smoothly.