An extremely common scenario that many Edmonton bookkeeping and accountants see is that gets to a year-end, entrepreneur brings in a giant bag or box of unorganized receipts in order to do their corporate fiscal year-end statements. While this is common, it is never a situation that bookkeepers or accountants want to deal with. Business owners should understand that there is a much better way of dealing with their financial information. Not only can help save time and money but doing it this way can also help entrepreneurs in the operating of their business.
The first thing that entrepreneur should keep in mind is that being disorganized can cause them to file a late and then be assessed penalties but Canada revenue agency. One of the reasons for this, is that by not having all of the receipts, business owners can forget what therefore, do not have them organized by date, or end up missing information. If the Edmonton bookkeeping that is working on that file is not able to sort through them fast enough, they will filed late and business owner will trigger penalties by Canada revenue agency.
Business owners also need to understand that the Canada revenue agency only gives them 30 days from the date that is on the letter in order to respond to an audit. If business owners are not organized in their financial statements in their business, having to do an audit within 30 days can be difficult, if not impossible. Even though many people believe that they will be able to get an extension from the Canada revenue agency, it is not that common because Canada revenue agency does not like granting extensions. It is much better to stay organized so that if there is a chance that they are audited, they can respond quickly. Business owners often think that if they do not respond to an audit request, it might stop being important, but what actually happens is Canada’s revenue agency once they do not hear from the business owner will access them whatever tax they deem necessary. Business owners should avoid paying more taxes then they need to, and respond promptly to audit requests.
Businesses who are disorganized can also pay more in order to file their year-end with their accountant if they are disorganized. The reason for this is when the accountant has to organize all of the financial information, they will charge the business owner but a time that they used at their accountant’s rate which is high. If an entrepreneur hires Edmonton bookkeeping in order to work on the organizing of the receipts, they will organize the receipts and charge the business owner their charge of rate which is significantly lower than accountants. Therefore, the business owner can get organized for a much lower rate. By allowing the bookkeeper to work on organizing the statements, and then sending the accountant the already organized information, it can save valuable money. Since 29% of all failed entrepreneurs said that the reason why their business failed was that they ran out of money, anything an entrepreneur can do in order to save that money is important.
Anything that business owners can do to help keep them organized in their business is great, and hiring Edmonton bookkeepers is one great way that business owners can do that. Being organized can help entrepreneurs save money when it comes time to do their year-end filing, as well as make better financial decisions throughout the year for having interim financial statements. Since 50% of all Canadian businesses fail, and only 11% seek professional help, by utilizing both an accountant and a bookkeeper can help business owners not only stay organized, but have the expert opinions they need to help run a successful business.
Entrepreneurs should understand that it ends up costing them far more money to file their year-end with their accountant if they are disorganized with their finances. The reason for this is because if an accountant has the job of organizing the receipts and sorting out the finances, they will charge the entrepreneur for all the time that they spend doing it and at a very high rate. If entrepreneurs can hire Edmonton bookkeeping, they can organize the finances of the business at the rate of the bookkeeper, which is much lower. When they take their organized finances to their accountant in order to do the year-end filing, accountant be able to spend much less time working on it and will help business owner save that way as well.
By utilizing Edmonton bookkeeping in their business, can help entrepreneurs get interim financial statements which can be a significant help for them to make financial decisions in their business. The interim balance sheet will have cash, Accounts Receivable, Accounts Payable and assets on it while the interim income statement will show the revenue, the cost of goods sold the expenses and the profit. Business owners should look at both of those reports any time they need to make a financial decision. Also, been looking at that report, business owners can see where the revenue in their business is, and if they need to do any revenue-generating activities, mortgage how successful their advertising efforts have been.
Another way that utilizing the interim financial statements can help business owners is by being able to see how much they have in their business, they can decide how much they can take out of their business to pay themselves. Without revealing that information first, business owners run the risk of not being able to afford the payment that they are giving themselves and bouncing payments. By being able to look at their interim balance sheet, business owners can make great financial decisions in their business, have them avoiding running out of money in their business all of this is possible for hiring Edmonton bookkeeping and utilizing both bookkeepers and accountants in their business.