Running your own business means you do a little bit of everything, but keeping on top of your financial reporting and tax obligations can be overwhelming.
Let me help you with that!
Common questions I’m asked:
Should you incorporate your business? When is the right time to do it?
Incorporating your business can offer a number of benefits: a low corporate tax rate for small businesses, opportunities for income-splitting, protection from legal and financial risk, and a tax-sheltered exit plan. It also means an increase in tax-filing obligations and legal and accounting fees.
It’s a complex decision, but I’ll crunch the numbers and help you weigh the advantages against disadvantages. Together we find the best path forward for you and your business
How should I pay myself?
Generally speaking, two compensation methods are available to corporate shareholders. If your company is incorporated, you can pay yourself a salary, withdraw funds as dividends or a little bit of both. The optimal mix depends on the nature of your business, your appetite for financial management, your personal tax situation and your long-range retirement plans.
Salaries are paid to employees; dividends are paid to shareholders. As a business owner, you’re both, which means you can structure your compensation to your satisfaction.
What do these terms mean?
There are three types of accounting engagements available when hiring an accountant to prepare your financial statements: an audit, a review or a compilation engagement. The difference is the level of service and assurance provided by the accountant. A compilation engagement represents the most lightweight and cost-effective approach. I will organize and present your financial information without carrying out inquiries and analytical procedures designed to verify this information. As the term suggests, I will compile your financial statements using the information you provide. The result will look professional and will satisfy most financial statement users like Canada Revenue Agency and your management team.
Bookkeeping vs. accounting
Bookkeeping lies at the foundation of any good accounting system. It entails recording the day-to-day financial transactions of a business and can encompass a range of tasks like data entry to invoicing customers to reconciling bank account.
The accounting process relies on bookkeeping data to measure the performance of a business, analyze the effectiveness of its operations and communicate the results. Accounting organizes bookkeeping data into financial statements, tax returns and other essential reports.