It is extremely important then when entrepreneurs are creating their business, that they utilize both Edmonton bookkeeping as well as accountants. The reason why this is extremely important is that 50% of all Canadian entrepreneurs fail in business, and only 11% ever end up seeking professional help. By utilizing both bookkeepers and accountants in their business, business owners will have professional advice that they can utilize to help them avoid the 3 most common reasons why businesses in Canada fail. Out of that 50 % of entrepreneurs that fail, 42% fail because they are unable to find the right customers, 29% fail because they have run out of money, and 23% are unable to find the right staff. By utilizing both accountants and bookkeepers in their business, entrepreneurs can avoid those reasons for failure.
One of the reasons that business owners need bookkeepers as well as accountants, is because if they do not have a bookkeeper, they can be disorganized in their financial statements which can end up causing them to file late. The reason for this is because if an entrepreneur does not have their receipts and financial information organized, they will take their big bag of receipts to their accountant, and expect them to organize it. While accountants can organize their financial information, that is not what they should be doing, and it can not only take them additional time to sort through an entrepreneur’s information, but a business owner will also get charged and accountants rate for going through their finances. If an entrepreneur is using a bookkeeper, the bookkeeper can keep those finances organized on a month-to-month basis, meaning that there saving money by utilizing a bookkeeper, and when it gets to their year-end, all they do is bring their organized finances to their accountant, and the accountant can do the year-end without charging them an additional fee for organizing their receipts.
Entrepreneurs should understand that if the CRA sends business and audit letter, a business owner usually has 30 days to respond to the audit query. If they have already been getting their financial statements organized by Edmonton bookkeeping on a regular basis, then entrepreneurs will be able to take those organize statements to their accountant and get audited statements within 30 days. If an entrepreneur does not have those finances pre-organized, there is less of a chance that taking a giant bag of unorganized receipts to their accountant will enable them to create audited financial statements within the time period. If a business owner does not respond to an audit request by Canada revenue agency, CRA will assess the taxes that they deem fit.
It is extremely important that entrepreneurs stay organized by using Edmonton bookkeeping as well as their accountant, in order to have up-to-date financial information for their accountant as well as in case Canada revenue agency contacts them and needs more information. If they are only using an accountant, chances are they will be more disorganized throughout their year, and their finances could cost them more money.
When entrepreneurs are starting their own business, and they are trying to save money by any means necessary, they should not decide to only utilize an accountant instead of an accountant as well as Edmonton bookkeeping. A bookkeeper is extremely important to business owners because they help keep them organized financially throughout the year. This is extremely important, especially for brand-new business owners, because they need to see all of their financial information throughout the year in order to make better business decisions. Accountants are great, but they primarily deal with the financial year-end for a corporation, tax planning as well as business planning.
By having organized financial statements throughout the year can allow business owners to make better decisions because they will be able to see the financial state of their business on an ongoing basis. They will be able to be proactive if they see that they are not generating enough revenue to cover their expenses, they will be able to go out and create some revenue-generating activities that can help them be more cash flow positive. It is also important that they can stay on top of their expenses by looking at their income statements. Edmonton bookkeeping will help entrepreneurs understand if their costs are increasing month over month, and can help entrepreneurs keep those costs down.
As an entrepreneur understands the financial statements that are given to them in the interim from Edmonton bookkeeping, they will be able to see how much money they have in their corporation and if they are able to start paying themselves. If entrepreneurs are trying to pay themselves before they understand how much money they have in their corporation, they can run into huge issues. Business owners that do not look at their financial statements in order to pay themselves, often end up paying themselves too much and then running out of money.
Another way that looking at balance sheets can help entrepreneurs figure out how their money situation is, is because it helps entrepreneurs understand how much money they have in their corporation. If entrepreneurs are only looking at their bank statements, they may think that they have more money than they are actually due. The reason for this is because if entrepreneurs have written several checks that have not yet cleared their bank but looking at their bank statement business owners will see that they have more money than they actually have at their disposal. By using balance sheets, all of the money that is scheduled to come out of their account will be noted and will give an entrepreneur a better idea of exactly how much money they have to work with.
By keeping organized financial statements throughout the year by receiving interim statements from a bookkeeper, business owners can make better decisions about their finances throughout the year and avoid one of the 3 most common reasons why entrepreneurs in Canada fail.