Business owners should take very careful consideration when hiring Edmonton bookkeeping companies for their business. Despite what many entrepreneurs believe if they have a great accountant they still need to hire a great bookkeeper for their business. 50% of all entrepreneurs end up failing in business within five years, and only 11% of entrepreneurs seek help when they need it. Hiring a great financial team including a fantastic accountant is great bookkeeper can help entrepreneurs not only stay organized off the end of the year, but bookkeepers will help them stay organized throughout the year so that they can make the best financial decisions in their business, and avoid being one of the 50% that fail.
One of the first things that entrepreneurs should keep in mind when hiring Edmonton bookkeeping companies for their business, is that anybody can become a keeper, or at least call themselves one. Since there is no designation that bookkeepers need in order to call themselves odds, business owners should ensure that whichever bookkeepers they are thinking of hiring, actually has a wide breadth of experience. Ideally, they should look for someone who has experience going through the accounting program in a postsecondary institution, because they have typically completed their accounting program, but need experience in order to complete their designation. Accounting students can be extremely powerful bookkeepers because they know exactly what an entrepreneur needs financially. Another question that entrepreneurs can ask potential bookkeepers for determining the amount of knowledge that they have, is if they have experience working for an accountant, or in a public accounting practice. This amount of experience can be extremely important to help bookkeepers understand what types of information a business owner needs, and how to work closely with an accountant to ensure that that information is organized for them as well.
Owners should also ensure that there Edmonton bookkeeping company is organized. Because they are going to be going through all of the business finances, also going to be organizing things such as invoices, expenses, and receipts. They should be organized by date, and then filed properly. Entrepreneurs can take a quick look at the filing system of a bookkeeper to see if it is organized properly. This level of organization can significantly help entrepreneurs if they are given an audit request by Canada revenue agency. They can ask their bookkeeper if they have experience going through an audit with the previous company or an accountant. This experience can be invaluable so that they can know what information CRA typically looks for, and the way they like to get their information organized. Business owners should understand that bookkeepers that have been to the audit process months before will generally keep extremely organized files moving forward.
Business owners should ask many questions when there hiring the right Edmonton bookkeeping company for their business, to ensure that there hiring someone that has the right knowledge, and has a lot of experience. Because the importance of the information that a bookkeeper will provide a business owner, business owners should ensure they are doing their due diligence as well.
The importance of an Edmonton bookkeeping company cannot be understated. Not only can they help a business owner keep their business finances organized, but they also provide up-to-date and organized financial statements and bank reconciliations, so that business owners know how much money they have to spend in their business. The importance of the information that a bookkeeper provides can help business owners either grow their business by making great business decisions or negatively impact their business. The hiring a bookkeeper without the right experience can end up with incorrect interim financial statements, and a mess for their accountant to have to clean up.
Ideally, business owners should hire an Edmonton bookkeeping company who can provide up-to-date and proper bank reconciliations as well as interim financial statements. It is extremely important for business owners to have, and they should understand why. A bank reconciliation is going to help a business owner match the transactions that they made in their business against the transactions that have already been posted in their bank account. The reason why this is so important is because if a business owner is only looking at their bank statement to see how much money they have in their business, they are at risk of spending too much money. For example, if a business owner has processed payroll, but it has not come out of their account yet then looking at their bank statement might show that they have a certain amount of money when they do not because they’re waiting for that payroll to be disbursed. By getting into the habit of looking at their bank reconciliation before making any financial decisions, can help business owners avoid spending more money than they have. Properly done or sloppily done finances can end up with improper or incorrect bank reconciliation statements, that can have the business owner trying to make informed financial decisions, but end up spending too much money despite their best efforts to avoid it.
Business owners should also be ensuring that there Edmonton bookkeeping company is familiar with shareholder loan accounts. The reason this is important because shareholder loan accounts are how entrepreneurs attribute the money that they take out of the business as well as how much the business gives to them. All of the money that an entrepreneur takes out of their corporation they have to end up paying personal tax on. Since the personal tax rate is 48% in Alberta and the small business tax rate is 11%, if too many personal transactions are attributed to the shareholder loan account, that can end up with the entrepreneur paying far too much in personal tax than they actually owe. This can be extremely difficult for accountants to fix at year-end, therefore it is extremely important that it gets done properly from the beginning.