When entrepreneurs are not organized in their business and not hire Edmonton Bookkeeping, they tend to not keep their receipts and financial information neat and tidy in their business, and when they take it to their accountant, end up paying a large sum of money in order to organize their year-end, or they end up paying late and triggering penalties by Canada revenue agency. These are completely preventable and avoidable situations, as long as entrepreneurs hire a keep in order to help keep them organized.
The way entrepreneurs can stay organized by using a bookkeeper is that instead of opening their bank of receipts to their accountant to work on your end, they can bring the receipts on a monthly basis to Edmonton bookkeeping, who can work on their finances every single month in order to allow the business owner to stay on top of it. This is extremely beneficial because staying organized can help business owners immensely in business.
One of the ways that staying organized can help entrepreneurs, is if a business owner gets audited by the Canada revenue agency. They get 30 days to respond to an audit request from the date on the letter, and if entrepreneurs are not organized, it may take them much longer than 30 days to get their accountant or Edmonton bookkeeping to organize their finances. Business owners may think that it is possible to get an extension, it is less common than they think, and it is only 2 weeks which is not going to significantly help entrepreneurs who have not kept their financial information organized throughout the year.
If entrepreneurs do not respond to Canada revenue agency on their audit request, because they are not able to get their financial information organized in 30 days, it is not going to make the request go away. CRA will assess tax for the business in the amount of what the business did in the previous year. Business owners should avoid paying any additional taxes that they absolutely need to, therefore it is extremely important that they stay organized in case they have an audit request from the Canada revenue agency.
Entrepreneurs should also understand that if they take their bagful of an organized receipt to their accountant in order to do year-end, the fact that they are disorganized could end up costing them even more money. The reason for that is because when the accountants organize the information, they will charge the entrepreneur for every hour they spend organizing it, and charge it out at the accountant’s rate. If an entrepreneur hires Edmonton bookkeeping, they will be able to organize it for the entrepreneur and a much lower price per hour then the accountant will charge. The great thing about having a bookkeeper look after their finances is that when they do get hitched the accountant, it is organized and can help business owners get charged less from their accountant because of the organization of it.
When business owners are disorganized and fail to hire Edmonton bookkeeping, it can cause all sorts of problems in their business including not being able to understand where the financials are in their business, which can end up with business owners making poor financial decisions. Industry Canada says that half of all Canadian entrepreneurs will fail within 5 years, and 29% of those failed entrepreneurs say that the reason why their business failed was that they ran out of money. Being organized in business can mean the difference between making great business decisions and growing a business or making poor financial decisions and failing in business.
One of the ways that hiring Edmonton bookkeeping can help entrepreneurs stay organized, is by perceiving interim balance sheets and interim income statements on a regular basis. Business owners should be able to read and understand both statements together because they work in conjunction with each other to give a business owner an idea of the finances in their business. The income statement is going to show the entrepreneur went money the corporation is making while the balance sheet shows the entrepreneur what the current financial position is. Any time an entrepreneur needs to make any sort of financial decision, they should read and understand those reports first.
One of the most important financial decisions a business owner will make is how much money they should pay themselves. Organized financial statements can help entrepreneurs see the revenue in their business as well as how much the business is spending and if an entrepreneur is going to have enough money to pay themselves. If they do not have enough money to pay themselves, they should be able to see how much money they have to bring into their business in order to do so. Business owners should get the hang of this before they hire on employees, and need to not only pay themselves but pay their staff as well. Business owners should get away from trying to look at their bank balance in order to make financial decisions because not all of the most important information is included there, there balance sheets with a painted a more accurate picture of the money they have to spend.
By receiving these organized interim statements, this is owners will be able to make financial decisions a lot sooner in their business which allows them to be proactive. By utilizing Edmonton bookkeeping throughout the year, business owners can be better armed to make financial decisions whenever they need to make them instead of waiting for the financial year-end from their accountant. Daily financial decisions they may need to make include are they needing to buy assets in their corporation, can they afford to hire people, or do they need to cut expenses and lay people off. It also helps entrepreneurs see how effective their advertising and marketing is, and if they need to be generating more revenue in their business to cover costs. By getting the hang of reviewing these interim statements on a regular basis can help entrepreneurs stay organized to make better financial decisions in their business on an ongoing basis.