The success rate for businesses in Canada is at 50%, hiring Edmonton bookkeeping can help increase those odds. Industry Canada says that out of all of that 50 % of entrepreneurs that they owe by the 5th year in business, 29% of them said that they failed because they ran out of money in their business. By hiring a bookkeeper, entrepreneurs can significantly change those odds and be more likely to succeed and grow a successful and stable business.
The reason why Edmonton bookkeeping can help significantly in the area of avoiding running out of money is that bookkeepers help organize and entrepreneurs finances an ongoing basis. While accountants can do the same thing, it is not typically what their focus is, and they end up charging quite a bit more money in order to organize the finances for business on a regular basis. Accountants focus mostly on the year-end financials of the business, tax planning, and business planning for the business to help them become successful. But also hiring a bookkeeper, business owners can see the financial health of their business on an ongoing basis, stay organized, and be able to make better financial decisions.
By receiving financial statements every single month, business owners will be able to see the cash, the accounts receivable, accounts payable and the assets in their business based on the interim balance sheet. From the interim income statement, business owners will be able to see the revenue, the cost of goods sold, expenses and the profit. There are many things that business owners can do with that information include cutting the expenses in their business. This is extremely important to do on an ongoing basis in business, instead of waiting for the year-end financials from their accountant. By the time they get those year-end financials, it will be 6 months after the fiscal year-end of the business, which means some of that financial information is up to a year to year and ½ old. By utilizing the statements from Edmonton bookkeeping, business owners can see on a regular basis what expenses they have if any are creeping up, and what expenses would have the biggest impact being cuts.
Something else that business owners can see by looking at their income statements and balance sheets on an interim basis from Edmonton bookkeeping, is how much money they have in their business. If they depended solely on the statements from their bank about how much money they have, they could be at risk for bouncing checks including payroll. They need to be looking at their interim statements so that they can see the amount of money that they have available because checks and payments are going to appear on the statements before they appear in their bank. If a business owner is only looking at their bank statement, they may decide to run payroll, before a $2000 check has cleared, which creates a deficit.
While many entrepreneurs tend to believe that Edmonton bookkeeping does the same thing an accountant does, but they are less expensive because they cannot quite do everything. And this would be an extremely wrong assumption to make. Entrepreneurs should look at hiring an accountant and a bookkeeper as part of a team that works together. While accountants focus on the year-end financials of the business and work on the tax planning and business planning of the business, a bookkeeper is charged with organizing the monthly financials of a business in order to help the business owner stay organized and informed about their finances.
By staying organized, business owners are able to see all of the finances of their business on a regular basis. When an entrepreneur is able to be more organized, they are able to make better financial decisions throughout the year. Some financial decisions need to be made on a regular basis and it cannot wait for an entrepreneur to get the year-end financial statements from their accountant. Can a business owner afford to pay themselves, can afford to buy an important asset, can afford to hire someone, or do they need to lay people off are all questions that business owners need to make before they get their financial statements year-end. By utilizing Edmonton bookkeeping, business owners can see this information and be more proactive in their business.
Another thing that staying organized in a business can do financially, helps a business owner file their taxes on time. A common scenario that Edmonton bookkeeping sees quite often is an entrepreneur that brings in a giant box of receipts that have not been looked at for an entire year, and they need to be able to file their taxes on time. While an accountant can organize a mass, business owners will be paying a lot for it, and a bookkeeper will be able to organize that as well. However, if a business owner has been utilizing the services of the bookkeeper throughout the year, they will already be organized and ready to file their taxes. Instead of taking a giant bag of receipts to their accountant, they will take their organized 12 months of financial statements to their accountant, and be less likely to file late.
This can also help business owners immeasurably if Canada’s revenue agency sends an audit letter to a business owner. Edmonton bookkeeping is able to help a business owner respond to an audit request much faster because they will be more organized at the moment in a business owner would if all they had was there box full of receipts. Since a business owner will only have 30 days from the dates of the letter being sent to respond to an audit request, it is extremely necessary for business owners to be organized in order to respond to the audit request on time and avoid being assessed penalties. If you have any needs for our fantastic accounting or bookkeeping services. then you must be sure to give us a call today at our phone number or you can visit our website and email us from there.