Attention, business owners!
The accounting system has imperative importance for your business regardless of what you do. Even if you don’t rely on accounting it is still an essential tool in your business management process. Accounting enables you to look at your business through different lenses: how much the revenues are, what the profit is, how much to reserve, etc. So having an effective accounting system is very important for your business, regardless of what service you provide or product you sell.
We look at the accounting system as a process of continuous improvement. Your accounting is a pure reflection of your business. The accounting system has to be dynamic; it should evolve with your business as your services change and as the value you offer your clients change. These things change constantly. We recommend looking at your accounting system periodically and asking yourself – at this moment, does it reflect my business? If not, then it’s probably harming your business because it does not provide the information that reflects your business. We recommend to ask us what aspects of your accounting system should be updated or upgraded. It’s vital not only to implement a new accounting system but also to adapt it to your business functionality.
Feel free to contact us about any questions on selecting an accounting system for your business.
1. Log-in into your CRA MyAccount. Your screen should look something like this:
2. On a bottom right pane click on Authorize representative(s) link.
3. On a following screen you will need to specify your representative RepID. Enter it in an appropriate text box and proceed to the next step.
4. Specify Level of Authorization and weather or not to grant Online Access.
5. Finally, review representative and level of authorization that you have granted access to your information. If everything is correct – tick check box, and click Authorize button.
Once you register for e-mail notifications from the Canada Revenue Agency (CRA), you will be notified about important changes on your account. So, compared to the traditional mail, you get notified right away.
For instance, you will receive an email when:
- you have new CRA mail to view in My Account
- your address is changed
- your banking information for direct deposit is changed
- your marital status is changed
- your authorized representative information is changed
- mail sent to you by the CRA has been returned, meaning you need to update your mailing address
- you give Employment and Social Development Canada consent to share your information and it is updated with the CRA
Which Mail Will You Receive Electronically?
Some examples of CRA mail you can currently receive online include:
- notices of assessment and re-assessment
- benefit notices and slips
- T1 adjustment notices
- installment reminders
- for some programs, letters asking for information and documentation
Where to Register?
- Go to MyCRA page following this link.
- Click on CRA Register button. It will take you to Identity Validation step.
Have your SIN, address, and copy of filed T1 ready.
After successfully following the instructions, you should get to the notice saying that your access code was sent by mail, and you should be able to log-in to your CRA MyAccount page.
Adopted from Email notifications from the CRA – Individuals.
Does Your Business Charges
Right Hourly Rate?
1. Identify Direct Costs
First of all, identify the cost items that your business incurs throughout the year directly when providing services. Example: employee billable hours, supplies, or travel costs. These costs can be traced directly to any given project provided to a client. In essence, these are direct costs of providing service to your clients.
2. Sum-up Overhead Costs
Second of all, identify your indirect costs that your business incurs throughout the year as a result of its operations. These costs cannot be traced directly to any given project provided to a client. Instead, they are allocated based on percentage or allocation driver. Example: banking fees, office rental costs, office supplies. These costs are necessary for operating your business, but are not directly traceable to any given project provided to your clients.
3. Remember Your Profits
Business is meant to generate profits on a long-run. Determine the profit that your business should generate during a year.
4. Identify Total Hours Billed
Lastly, calculate total hours your business billed clients throughout the year.
Finally, to obtain your business hourly billing rate, add Direct Costs, Overhead Costs, and Profit together, and divide this sum by Total Hours Billed.
This will give you hourly rate you should charge to cover direct costs, overhead costs, and leave business with desired profits.
Keep in mind, that throughout the year demand on for your business service may change, which in turn would impact the bottom line.
Have additional questions or need consultation?
Contact Alexandre Comptabilité Spécialisé Ltée for more information at (613) 882-8404 or email@example.com
Listing expenses by categories can be useful for reporting purposes and operations analysis of your business. However, there is no black-and-white rule creating a list of expenses. The fewer number of categories may not be suitable to obtain useful information, while having too many categories may create an overwhelming amount of information to process. This post is aimed to help you in creating the list of expense categories for analysis and reporting purposes.
4 Benefits of Keeping Records
- Records help to plan ahead.
You may conduct analysis to identify profitable sources of income, compare performance in different periods, and help you prepare budgets and forecasts.
- Records help to save in taxes
Proper documentation of deductible expenses allows to claim input tax credits, and reduce taxable income.
- Records keep you informed about the financial position of your business.
Records allow to identify profit or loss of your business operations.
- Proper records may help you get loans from creditors.
Creditors need accurate historical information about the financial performance of your business to process your loan application.
In short, a business expense is a cost that you incur in order to generate revenue. The business expenses can be claimed for income tax purposes, allowing you to reduce tax payable.
Business expenses have to be supported up with supporting documents, such as a sales invoice, a receipt, etc. Supporting documents should include the vendor’s name and the date, total amount, and business number in case if there are taxes collected. Furthermore, the processed bank cheques can support amount paid for business expenses.
10 common business expenses are:
- Accounting fees
- Advertising expenses
- Business fees, licences, and dues
- Insurance expenses
- Interest and bank charges
- Maintenance and repairs
- Meals and entertainment
- Motor vehicle expenses
- Fuel and oil
- Automobile maintenance and repairs
- Licence and registration fees
- Capital cost allowance
- Interest paid on car’s loan
- Leasing costs
- Office expenses
- Salaries expenses
While it may seem straight forward what the business expenses are, feel free to contact me for quick consultation.