Firm Offering Bookkeeping Services Discusses How Inaccurate Bookkeeping Will Destroy Your Business

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How do you look at your bookkeeping?  Do you think of bookkeeping as a simple chore that you can leave for last? Profit Financial Services, a bookkeeping services company in Hamilton, counsels clients to be on top of their company’s bookkeeping and take it very seriously.  Being laid back with your bookkeeping can lead to negative results.

Inaccurate bookkeeping could turn off potential customers, suppliers and creditors.  In some cases, bad bookkeeping may even prompt a number of stake holders to take legal action.

Bookkeeping that paints the wrong financial picture of your company can lead to one of several unwanted scenarios:

  • A bank or financial institution may refuse to lend you money.
  • Potential investors may not want to invest in your company because they do not find your financial reporting reliable.
  • You may not be settling your financial obligations on time since your “Accounts Payable” books  show otherwise.
  • You may be forced into bankruptcy when a large customer pulls out his business due to your unreliable bookkeeping.
  • You may unknowingly be owing the government large sums of money when your bookkeeper erroneously computes the payroll tax.
  • You might be paying hundreds of dollars with bounced cheque charges.

 

The examples above happen all the time. Profit Financial Services, a bookkeeping services firm in Hamilton, notes that these failures could have been easily avoided by paying more attention to bookkeeping.

Bookkeeping is not a matter of posting numbers on a ledger; it is telling your stake holders your daily financial transaction story.  An inaccurate story can make you or other interested parties take a wrong action.

An Payroll Firm Reveals 3 Reasons Why Your Company Needs a Payroll Service

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One important activity in operating a business is preparing the payroll.  Many businesses have an in-house department  to compute employee compensation during a pay period based on his/her hourly rate. For these companies, hiring a person or group to do the payroll is factored in as part of operating costs.  Profit Financial Services, a payroll firm in Hamilton, however, believes that outsourcing your payroll service may be more beneficial than hiring in-house personnel.

Profit Financial’s Hamilton based accounting firm sees that there is more to doing payroll than just computing and paying the salaries of your employees. Many aspects of your operations are affected by your business payroll functions.  Your payroll data base contains a lot of information that can help you in making decisions on other parts of our business.  You can maximize the information from your payroll when you have an external accounting firm doing it for you.

Here are three major benefits of outsourcing for a payroll service:

First, with an outside payroll service, you are assured that you will be served by professionals who are experts in payroll and tax-related matters.  These are individuals who know their deadlines, rates, procedures and fees regarding government policies and institutions.  With their knowledge and experience, they can submit accurate and timely payroll reports and computations. You will not face issues with  compliance and private policies. On the other hand, when you do your payroll in-house, your staff may have to take time off to attend seminars and lessons on new regulations and policies.  You don’t have that worry with an outsourced patrol service.

Second, having an external payroll service frees your company to allocate time and financial resources to your core business. Whether you are in manufacturing, food, retail, education, information technology etc., having an accounting firm manage your payroll allows you to focus on your key business issues while the professionals of the accounting firm handle the payroll.  Depending on the size of your business, the time and financial savings are substantial.

Third, you also save on cheque book reorders, software upgrades and staff retraining. As mentioned above, the accounting firm assigns a team of payroll specialists to do your company’s payroll services. This means the accounting company and their payroll team will work to upgrade their skills and knowledge.  Your outsourced payroll team will attend lectures and seminars on new government regulations and will learn new accounting and payroll software, saving your business precious time.

When it comes to payroll computation, you do not have to assume that it is an acceptable cost in your operations.  Profit Financial Services, a payroll firm in Hamilton, knows first hand how to help business owners save on payroll costs and improve their payroll computations.

A Company Offering Income Tax Preparation Exposes the Biggest Mistake Business Owners Make When Tax Planning

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April is the time of the year when individuals and businesses file their tax returns and companies consult their accountants on how to save money doing so.  Most business owners don’t realize that you can and should take positive action way before the April filing deadline arrives.  Profit Financial Services, a income tax preparation company in Hamilton, notes that there are four mistakes business owners overlook in planning their tax returns:

Businesses not considering tax-loss selling as a tax planning option. 

This involves selling investments that have a net loss at the end of the year to counteract capital-gains on other assets or investments.  However, to maximize your tax benefits or savings, you must make this sale on or before December 31.

 

Failure to prepare adequately for retirement.

You may not realize that you can enjoy tax benefits in your early retirement years.  When you reach the age of 71, you have the opportunity to wait until December 31st to make your last premium payment to your RRSP before you convert it to a regular annuity.

Did you know that you can postpone getting your Old Age Security pension for as long as 5 years?  For every month of delay that you receive your pension after the age of 65, you will have an increase of 0.6% on you future premium payments. Thus, with the 60-month delay, you can receive your pension at 36% higher value.

 

Not timing the withdrawals from registered plans.

Are you planning to withdraw funds from your RRSP, TFSA or RESP?  Did you know that the timing of your withdrawal may impact your tax savings? For example, withdrawing funds from a TFSA should be done by the end of the calendar year.  This gives you the opportunity to add to that fund in the ensuing calendar year rather than have a waiting period of two years.

It’s a different case when you are taking money from your RRSP fund.  If you wait until the following calendar year to make the withdrawals, you will get an additional year before you are mandated to make new contributions to your plan.

 

Overlooking tax credits from donations and expense payments.

It is common knowledge that donating to charities has tax benefits.  But did you know that you can maximize your benefits by donating before December 31st?  Also, if you and your spouse or partner have donated to a charity for at least 5 years and haven’t availed of a tax credit, then you can claim the federal First-Time Donor’s Super Credit (FDSC). This tax credit will give you an extra 25% federal credit for cash that you donated after March 20, 2013.    This can give you a federal credit of 40% for charitable contributions up to $200 and as high as 56% if your donations add up to between $200 and $1,000.  We’re just talking about the federal government here.  You can get more savings from provincial donation tax credits if applicable. Ditto for expense payments.  You can claim tax benefits when you pay these expenses.  You can maximize on your tax savings by paying these before December 31 rather than on the following year.

 

Profit Financial Services, an income tax preparation company from Hamilton, notes that most of the suggested activities are done at the years end. In reality, however, tax planning should be done all year round.  Don’t wait until April to think about your taxes, contact Profit Financial Services today.

 

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Being In The Black

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Being in the black can mean a lot of different things. Most business owners, it stands for being profitable. When a business owner sets out on a new venture, establishing a profitable business is one, if not the only, primary driver. Unfortunately, too many entrepreneurs get lost in the day-to-day chores of running the business, and forget their main purpose.

When we, as your accounting professional and Profit and Growth Expert, apply The Universal Business Model we see our primary role as helping you maximize the profitability of your business. With financial skills in hand, combined with access to a variety of analytical tools, each month we will focus our attention on your business’s financial position and progress.

Wisdom Pyramid

Here’s just a short list of those things you will be able to do with our help as we use The Wisdom Pyramid to ensure that we improve your business’s financial position:

  • You will know how your business stacks up against the competition with the information we provide you in a professional business assessment.
  • You will understand the areas where your business is strong and where it can improve, and we will regularly provide you with suggestions on how to do it. Consider this a Day with your CFO.
  • You will be able to identify trends that expose the helps and hindrances to your business.
  • You will take advantage of tax benefits through regular reviews of your tax position.

By gathering the necessary information through the bookkeeping and accounting process, we will be able to analyze the data and help you make the changes required to improve the profitability of your business. Whether you require an audit or a review of your finances, we can help move your business forward.

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Tax Planning and Preparation

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There’s one distinguishing difference between tax planning and tax preparation: December 31st. In order to be beneficial, tax planning must occur before the end of the year while tax preparation can only take place after year’s end. Although we can’t promise to eliminate taxes, our tax planning and preparation services will help you minimize them.

Tax planning is an important step in reducing taxes. Together, throughout the year, we will discuss various tax strategies that could potentially save you thousands of dollars. This will enable you to make all the necessary adjustments before the end of the year so that you have some control over how much you pay in taxes.

Then, after year’s end and with your help, we will see that your taxes are professionally prepared in a timely fashion in order to avoid ate fees. In order to provide you with such services, we have certified Professional Tax Preparers on staff that will assess your tax liability.