One of the biggest business misconceptions out there today is what the difference is between an accountant and Edmonton bookkeeping. Businesses need both a great accountant as well as a great bookkeeper in their business. The reason for that is because accountants will help business owners make a business plan that can help them plan how they are going to grow their business, do a tax plan to help a business owner take money out of their business in a way that has them paying the least amount of taxes possible, emptying their fiscal year-end filing Canada revenue agency. Bookkeeper, on the other hand, is going to be taking care of the day-to-day financials of the business such as Accounts Payable and Accounts Receivable and organizing it in such a way to give a business owner interim financial statements that a business owner will then read and use in order to make good financial decisions in their business. A great business owner does not have to pick between one of the other, successful businesses use both.
Since odds are stacked against business owners in Canada with 50% of all entrepreneurs feeling before their 5th year in business according to Industry Canada. 29% of those entrepreneurs say that the reason why their business failed was that they ran out of money. This makes having a great Edmonton bookkeeping and accounting team extremely important. One of the ways that this team can help entrepreneurs is helping them be organized for their fiscal year-end. A scenario that happens far too often to both bookkeepers and accountants is that an entrepreneur has a filing system of a giant grocery bag full of their receipts. When they need to get their financial year-end done, they bring their accountant a giant bag of receipts that then need to be organized. This lack of organization takes a lot of time for an accountant to organize, which causes a business owner to file their taxes late. Also, it cost the business owner a lot of time and accounting fees, so not only are they being hit with penalties from Canada revenue agency for filing their taxes late, but they are also being hit with a huge accounting fee that could have been avoided.
Another way that using a great Edmonton bookkeeping and accounting team can help entrepreneurs is in case a business owner gets audited. Many businesses get audited by Canada revenue agency on a regular basis, and business owners will only have 30 days from the date of the letter in order to respond to Canada revenue agency with their results of the audit. If they are not organized they are going to have to pay their accountant a huge amount of money in order to organize their finances in order to do the audit. Since getting an audit is an incredibly expensive venture anyway, business owners were disorganized can add to that expense simply by not being organized. If they do not respond to the audit, then they will get assessed additional taxes which can only at to their financial issues.
Great business owners already understand the value of hiring both an accountant and a great Edmonton bookkeeping in their business. The team will allow business owners to be organized, which can help a business owner have great interim financial statements which can help them make great financial decisions in their business.
When the way that this is possible, is when an entrepreneur gets interim financial statements from Edmonton bookkeeping, they will end up getting an interim balance sheet that they can look at to see what the current financial position of the business is. The balance sheet is important because it will show the entrepreneur what the finances of the business is after taking into account all of the payables and receivables that are scheduled to come out of the bank account. If entrepreneurs are reviewing their bank balance in order to make financial decisions, they could be making poor financial decisions based on not having all of the information. If they have made $5000 worth of checks that need to cling to their bank account, if they have not yet been cashed it may appear to a business owner that they have $5000 more than they expected. By getting into the habit of only looking at the balance sheet, entrepreneurs can understand exactly how much money they have to use, and they can pay themselves, purchase assets were save that money.
Another way that utilizing Edmonton bookkeeping can help keep entrepreneurs organized, is that when they start to look at their balance sheet and income statement conjoined, they will be able to see that they both work together in order to help entrepreneurs understand the state of their finances. For example, if an entrepreneur looks at their interim income statement and see what their revenue is, they may be able to cut costs to increase the revenue or see that they need to engage in some revenue-generating activities in order to generate more revenue in their business. Business owners to get into the habit of reviewing both on a regular basis in order to be able to make proactive business decisions. Not only to make decisions like when can they purchase assets when should they hire that new person, but what can they do proactively in their business to increase the revenue of their business or decrease their costs in order to affect their business positively.
When entrepreneurs hire Edmonton bookkeeping to work in their business then what they end up doing is getting themselves a wealth of information to base all of their financial decisions on so that they can proactive in their business. Hiring just a bookkeeper or just an accountant is going to give business owners enough financial information in order to base decisions on, and it could cost them running out of money in their business which could, in fact, cause them to have to close their business due to failure.