One of the biggest hurdles that entrepreneurs face in Canada today is running out of money, by utilizing Edmonton bookkeeping, entrepreneurs can significantly help avoid that problem. The statistic from Industry Canada says that 50% of all entrepreneurs in Canada fail in business within 5 years, and out of all of those failed entrepreneurs, 29% said the reason their business failed was that they ran out of money. Helping entrepreneurs avoid running out of money can significantly increase the odds of success. Many entrepreneurs do not understand why they need to have a bookkeeper as well as an accountant, but accountants look at the finances of the business from a very high view, completing year-end filings as well as business planning and tax planning, while bookkeepers actually work with the day-to-day finances of the business in order to provide the entrepreneur with interim financial statements that are accurate, and can help entrepreneurs make better business decisions.
One of the ways that these up-to-date financial statements can help entrepreneurs make great decisions, is first when a business owner can understand the information that is in them. The income statement shows the money that a corporation is making while a balance sheet shows an entrepreneur went to the current financial position of the business is in. The interim statements that come from Edmonton bookkeeping are as follows: the interim balance sheets will have cash, Accounts Payable and Accounts Receivable as well as assets; the interim income statements will have the revenue, cost of goods sold, expenses and profit. Entrepreneurs need to learn how to read those hand-in-hand so that they understand what is going on financially in business. For example, but looking at the balance sheet, a business owner can understand the financial state of their business with all of the payments that are due to come out accounted for. If a business owner is just looking at their bank balance in order to see the financial health of their business, they may look in there and see that there is $5000 and right themselves a check for $4000, but by looking at the balance sheet, entrepreneurs ablate be able to see the fact that they have got $5000 of payments coming out, which means that a business owner effectively has no money to spare. If they right themselves that check then they are going to cause all of the other payments to bounce.
When entrepreneurs get into the habit of reviewing their financial statements on a regular basis, they will be able to make better proactive business decisions by utilizing Edmonton bookkeeping. No matter what the financial decision is, if they see that their revenue is down they may decide to increase their revenue-generating activities, they may decide to hold off on purchasing assets or they may decide that they have to lay people off, or their administration staff unto revenue-generating activities. If entrepreneurs see that the revenue is up and they have a profit in their business, they may decide they need to hire people, they can pay themselves and they can buy assets. Edmonton bookkeeping | bookkeepers help entrepreneurs make financial decisions
When it comes to making financial decisions, entrepreneurs need all the help they can get, by utilizing both an accountant and Edmonton bookkeeping, business owners can stay extremely organized in their finances so that they can make the best financial decisions possible. The reason why it is important for entrepreneurs to make the best financial decisions possible, is because a significant amount of entrepreneurs fail in business because they ran out of money. The statistic is from industry Canada and it reads as follows, half of all Canadian entrepreneurs fail in business within 5 years, and 29% of those failed entrepreneurs say that the reason that they failed was that they ran out of money in their business.
Businesses should be extremely proactive in their endeavors to ensure that they do not run out of money in their business because that is a contributing factor to business failure. The way utilizing Edmonton bookkeeping can help is by helping business owners stay organized financially. When business owners bring their receipts on a monthly basis to a bookkeeper, they look after organizing the financial statements on a monthly basis and send out interim financial statements. This level of organization helps business owners when it comes to filing their year-end. They get a package from their bookkeeper to give to their accountant, and the accountant does not have to spend any additional time organizing the information from the entrepreneur. This saves precious time because disorganized files can cause entrepreneurs to have to file late as their accountant goes through all of their financial information from scratch.
When an entrepreneur gives their accountant a giant mass of receipts to go through, they end up paying accountant and hourly fee that is extremely high in order to have the accountant to go through that information, they can save themselves significant money by allowing their bookkeeper to work on it. If they get Edmonton bookkeeping to look after it on a monthly basis they can save even more money, because their bookkeeper is not going to go through things quickly in order to get it done for year-end. This can also help businesses if they are staying organized on a regular basis in case they get audited by the Canada revenue agency. Business owners have 30 days to respond to an audit request and if they do not, they will get assessed whatever taxes CRA finds appropriate. If they get assessed for more tax than they owe, then business owners are going to have to owe more taxes. Running out of money because they are paying penalties or additional taxes is completely avoidable simply by being organized. When entrepreneurs can be organized in their finances, they can avoid paying penalties and avoid paying additional taxes and avoid paying additional fees by their accountant simply by letting Edmonton bookkeeping take care of their finances for them.