If an entrepreneur is not aware of all of the various tasks that there Edmonton bookkeeping company is going to be providing to them, they will be less prepared to ensure that they are providing them as often as they need, and to a high enough level. If entrepreneurs do not hire the right bookkeeper for their business, they could end up with a bookkeeper without enough knowledge about bookkeeping, which could end up causing them more problems in the future. Since there is no governing body ensuring those who call themselves bookkeepers have the right knowledge, because there is no professional designation, entrepreneurs need to be extremely prudent when hiring a bookkeeper for their business, that they are knowledgeable and have the experience to do the job properly.
One of the most important things that an Edmonton bookkeeping company is going to need to have knowledge of is taxes. If they do not have enough tax knowledge, they can end up paying the wrong amount of taxes, which could trigger penalties or pay those taxes on the wrong date, which could end up causing late filing charges to the business owner. Some examples of taxes that bookkeepers need to know in order to pay them on behalf of the business owner properly are payroll taxes, GST and federal taxes. They need to know how much tax of each to send, how to calculate the various taxes that need to be paid and the filing deadlines for each of them.
Another thing that Edmonton bookkeeping companies have knowledge of the for an entrepreneur hires them in their business, is if they have been through the audit process before. If they have previously worked with accountants, or in an accounting office, chances are the bookkeeper will no how the audit process works. Once they have been through that before, they will be able to ensure that they are staying as organized as is necessary. When an entrepreneur gets an audit letter from Canada revenue agency, they only have thirty days to respond to the request, and having a bookkeeper who is organized, and knows how CRA will want the information can help ensure that a business owner can respond to that audit requests quickly.
While the Edmonton bookkeeping company and the business owners accountant are not necessarily going to work closely together, they will need to communicate with each other, and if their bookkeeper has had experience working with accountants before, this will ensure that they can communicate well with each other. Accountants might have requested on how the bookkeeper organizes the finances, to make it easy on them when they go to do their year-end financial statements for the business owner.
Business owners should not take the task of hiring the right bookkeeper lately, because it is an extremely important job that can help entrepreneurs make the best financial decisions for their business that can help them avoid problems and also be proactive and growing their business.
One mistake that many business owners make when hiring an Edmonton bookkeeping company, is that their accountant and bookkeeper do essentially the same thing, so they do not need to be careful when hiring a bookkeeping company for their business. Unfortunately, this is not true at all, and if entrepreneurs hire a bookkeeper that does not do their job well, they can end up with financial statements that are incorrect that can cause business owners to make poor financial decisions. It can also cause their accountant to have to redo a lot of the finances, forcing a business owner to not only pay for their poor bookkeeping service but also pay their accountant even more to fix it.
One of the difficulties that business owners have in hiring the right Edmonton bookkeeping company for their business, is that they do not know what the bookkeeper needs to know how to do well. By understanding seven basic knowledge of what their bookkeeper needs to know, can help entrepreneurs hire the right one for their business. They need to hire a bookkeeper that has knowledge in accrual accounting. This is extremely important because there can be a high chance of air with accrual accounting because of the difference in when invoices are created and when receipt of the funds happens. Accrual accounting is what it is referred to when an entrepreneur provides the product or service at a different date than they get paid for it. Different terms that there bookkeeper will need to know when it comes to accrual accounting are Accounts Receivable and accounts payable. If bookkeepers do not understand these terms, they will not be able to help an entrepreneur keep their finances organized.
It is also extremely important that the Edmonton bookkeeping company that they hire not only knows what a shareholder loan account is but how to classify the transactions in their business. A shareholder loan account refers to all of the transactions that the entrepreneur I was their corporation, that the corporation was them. For example if an entrepreneur pays the bill for their company from their personal funds, the corporation will end up owning the business owner. However, if they have the corporation for personal expenses the corporation back. The reason why it is extremely important to hire Edmonton bookkeeping company that is familiar with this, is because the difference in taxes that are paid on the transactions. The highest personal tax rate in Alberta is currently 48%, while the small business tax is 11%. If there bookkeeper’s business transactions under the personal expenses in the shareholder loan, that could mean that a business owner is paying up to 37% more taxes on those transactions than they need to.
Ensuring they hire a knowledgeable and experienced and ten bookkeeping company is extremely important, not only so that business owners can pay minimal taxes, but so that they can have organized financial statements throughout the year that can help them significantly make the best financial decisions in their business possible.