Why use a professional accountant?

Kelowna is a city that attracts new people on a regular basis. Known as being business friendly many people move here and immediately start a new business. Of course one of the first things you need as a small business owner is an accountant. Oh where to start!

Start with a professional, you can’t afford not to.

Unlike many other professionals, anyone can call themselves an accountant. The term accountant is not reserved or in any way restricted. This does not mean that a non-designated accountant is not competent, it only means that they do not have to adhere to the standards of professional accountants.

Professional accountants, CGA’s, CA’s and CMA’s study for many years and are required to pass rigorous examinations before they can use their designations. Additionally, professional accountants are required to keep their knowledge up to date, which is closely monitored by the respective associations. Public accountants must go one step further and attend additional training and are required to carry insurance.

If that wasn’t enough every three years, a mandatory practice review is conducted by the associations to ensure the quality of the work performed meets the high standards that you have come to expect.

Ethics play a very big role for professional accountants. What that means is that you should expect professionalism and strong ethics from your accountant or from other professionals you may deal with.

Most people aren’t aware this but regardless of who prepares your tax return, you are ultimately still responsible for its contents.  You want to make sure that it is done correctly.

For more information on professional accountants you can contact one of the three accounting associations in British Columbia —  Certified General Accountants (CGA), Chartered Accountants (CA) and Certified Management Accountants (CMA).  In 2013 all Professional Accountants in Canada have merged and are now Chartered Professional Accountants (CPA)

Get it done right and use a professional accountant!

I am Chartered Professional Accountant serving small businesses in Kelowna and Lake Country.  Please visit my website at: www.dufordcpa.ca for more information.

 

Managing your information in a Paperless world

So you have decided that you have had enough and now you want to go paperless.  Seems to make sense, most of your bank statements, bills, and receipts come online anyway.  Why print them?

Sounds simple enough but like anything, you need a way to organize your documents.  There are many software packages that do just this, two that come to mind are Paperport and Neat, but there are many more available.  Often if you have a scanner the software comes along with it so you don’t even have to buy separate software.  You can also just use file directories on your computer, it doesn’t really matter the important thing is to be organized.

For years I have been giving my clients a system to manage their paper documents.  Recently, I am getting more and more requests about how to manage the information in an electronic or digital setting.  I have come up with a process, it is pretty simple sort of a ‘virtualization’ of the paper folders.

Here’s what I recommend:

Create a file directory(folder) called “Business Info”  <– if you have more than one company, call this the company name.

Under that folder create a folder called “2014” <– or what ever the year is

Under each year create folders for the various categories:

  • Bank Statements
  • Credit Card Statements
  • Computer and Equipment
  • Advertising Expense
  • CRA documentation
  • Office Expenses

And so on..  If you are not sure, just look at your last years financial statements or ask your accountant for what expense categories apply to your business.

Anything that goes more than one year, put directly under the ‘Business Info’ folder.

Call it “Permanent Documents”.  Things like leases, contracts, incorporation information etc.

Each year just start over again with a new year and create subfolders (directories) for each of the categories that you used in the previous year.

This is easy to manage, easy to back up and very easy to replicate if you have more than one company.  Whether you are just using the file manager of your computer system or a file management system in a document management system, this is an easy way to store and later be able to retrieve your documents.

And please don’t forget to back up your data!!

Once your data is all in ‘electronic’ format, it is very easy to copy to a USB drive or send to your accountant via something like ‘e-courier’.  No paper to lose and your accountant will thank you!  At least I will 🙂

For more information please contact me at info@dufordcpa.ca or visit my website www.dufordcpa.ca.

What to do when CRA comes calling

Business owners fear the dreaded call from the Canada Revenue Agency(CRA).  After all we have all heard stories about how CRA has taken people’s houses, their boats, frozen banks account.  They have lots of power. But you don’t have to be afraid.  Although CRA does have a lot of power, they generally only rarely wield their stick.

Here is a couple of sure fire ways to get CRA to take your house or freeze your bank account or do some other nasty thing.

  • Don’t pay your taxes
  • Don’t file your taxes
  • Don’t return CRA’s phone calls
  • Don’t answer CRA’s letters

Typically, business owners who file on time, pay on time and respond to queries in a timely manner, have no issues with CRA.  Most accountants will even talk to CRA on your behalf, so you can rest easy.

Here are some basic tips as to what you should do:

File on time

Be aware of filing deadlines and do your best to be on time.

File accurately

While it may be tempting to inflate your expenses and / or deflate revenues, don’t do it.  An audit is unpleasant enough when you haven’t done anything wrong, it’s downright nerve-shattering when you have.

Make sure you know the rules

There is a lot of misunderstanding out there and you and only you are responsible for the information that gets sent to CRA (even if someone else prepares it).  Make sure your preparer is qualified to do the work and keeps up to date with tax rules.

Respond to CRA promptly

If you don’t want to talk to them, get a professional accountant to help.  If you already have an accountant and CRA is still calling you, talk to your accountant about getting them set up as a representative for you with CRA.  The accountant is then authorized to speak to CRA on your behalf.

Keep all your paperwork and documentation

A major source of expenses not being allowed is due to insufficient or incomplete documentation.  Just saying you have the expense is unfortunately not good enough, you do have to be able to prove it.  Also don’t forget to have a good filing system as you have to keep documentation for 7 years.

Have more questions? I am a CGA and I work with businesses in the Kelowna area.  I can be reached at: info@dufordcpa.ca or by visiting my website at: www.dufordcpa.ca.