Tag Archives: Bookkeeping Winnipeg

There’s Money to be Saved

Generally, the fewer employees a business has, the more hats each one has to wear. A truly small start-up, with only a few employees, can be a very stressful place to work.

When you’re responsible for every little thing that happens in your business, it’s easy to lose sight of the bigger ones.  We call it losing the forest in the trees.

When it comes to the financial health of your business, as an involved owner you feel a responsibility to your business, your customers, your employees, and your family to do the best you can.  After all, livelihoods depend on your ability to stay afloat.

One of the things that you’re tasked with, when your business is small, is cost control.  You have to determine, much of the time by instinct, which supplies and services are needs versus those that fall in to the category of wants.

The services of an accountant or bookkeeper almost always count as needs.  Some tasks you can perform yourself, but at great cost of time (and, if you’re like many people, sanity), and others simply require the expertise of a financial professional.

At Five Star Accounting, we have years of experience in the small business environment. We’re well versed in Canadian tax regulations, and we’re passionate about what we do.  Many business owners see bookkeeping and accounting tasks as punishment.  They’re our whole reason for existing.  We can save your business money because we know our way around cash management, payroll administration, and accounts receivable and payable.  We can help you navigate the stressful waters of business accounting, saving you money and freeing up your time to focus on the things that are important to your business.  Like your business.

Small businesses like yours are the engine that drives the economy, here in Winnipeg and across Canada.  For advice and help with accounting and bookkeeping that you can trust, contact Five Star Accounting for professional service with a personal touch.

The Importance of a Budget

It is very surprising when speaking with business owners how few actually spend the time and effort developing a budget.  Preparing a budget could be a daunting task.  However, one can be convinced that the benefits of using a budget as a tool to steer your company and to monitor your progress far outweigh the” head in the sand” approach.  Having a budget can help you realize controlled growth rather than ad hoc growth and operating expenses.

A budget is essentially a financial plan for your business.  Using past data and current knowledge about your business, growth potential, competition and changes in your expenses, one can estimate how their business should perform in the future using a best estimate approach.    But let’s not kid ourselves.  There are quite a bit of guesses and assumptions brought into a budget.  However, one of the most important aspects of developing a budget is that an owner must think about the future of their business at a very detailed level.  In a sense then, they are mapping out a plan as to where their business should be in the next year or two and what needs to happen in order to make it happen.  This then gets them thinking about what steps are required to meet their budget estimates.  For example if one estimates a growth in sales of 20% next year, they have to ask themselves how do they think they can meet this goal?   A 20% increase in sales will not mean a 20% increase in profits.  Why?  Because more sales can mean more costs.  Will they have the space, the employees, the supplies, etc. to meet the increase in sales?  Are they planning to promote their company and if so, in what way and at what costs?   It is at this point of detail that some business owners start to squirm.  They are not comfortable thinking about so many details.

Often, budgets are only brought to the forefront when financing is needed.  Banks or investors start asking probing questions and also require a budget for a few years down the line.   They want to know your assumptions and a budget helps to give them some assurance of how their investment or loan will generate enough revenue for their payoff.   If you are one of those business owners who just don’t want to go there, the staff at Five Star Accounting can meet with you to ask some of these questions and work with you to develop your budget.  We would be happy to assist you in mapping out a plan for you to follow in taking your business where it potentially could and should be.   We hope you can agree that following a budget and knowing if you’re on track throughout the year is far better than operating with your head in the sand.  A budget really helps to lower anxiety and gives an owner a much better feeling of control.

Types of Corporations in Canada Influences the Tax Paid

In Canada, there are two types of corporations. The first type is the corporation created under federal law, and the second type is the corporation formed under the provincial laws of the provinces and territories. Typically the federal form is preferred because it allows business operations across the country and the statutes controlling the corporation are consistent. The province and territory statutes vary quite a bit concerning issues like the rights of minority shareholders, internal governance, financial recourses and soon.

When you start a business, there are basically three business structures to choose from: sole proprietorship, partnership or incorporation. There is a fourth form called a cooperative, but it’s a very specialized and uncommon business form. The choice of business form influences the types of deductions you are allowed to take. Incorporation is often chosen because it can allow you to maximize the benefits of expense deductions while limiting personal liability.

There are several corporation types in Canada as summarized below:

• Canadian-Controlled Private Corporation (CCPC) – resident in Canada and is not controlled by corporation(s) or person(s) outside of Canada.

• Private Corporation – resident in Canada, not a public corporation, and not controlled by one or more public corporations

• Public Corporation – resident in Canada and meets requirements for listing of shares on the stock exchange or elects to be designated as public under Regulation 4800(1)

• Other Corporation – corporation form that doesn’t fall within the other 3 types of corporations

The advantages of incorporating include limited liability, ongoing operations with transferable ownership, easier to raise capital, possible tax deferral and lower tax rates. For any of these reasons, sole proprietors may choose to incorporate. For example, the Canadian-Controlled Private Corporation eligible for a small business deduction will currently pay a net federal tax rate of 11 percent which may be much lower than a personal income rate.

Corporations are also able to deduct all operating expenses while sole proprietorships face limitations. This gives you much leeway in terms of controlling the tax you will owe. For example, corporations can pay out profits to its management and staff turning what would be taxable profit into a deductible expense. A sole proprietor would have to pay all the tax due on business profit and personal income. In addition, any legitimate and legal expense incurred to operate the corporation is deductible, while it may be more difficult to separate personal from business expenses in a sole proprietorship.

It’s important to make sure you are getting all possible tax deductions on a business. The business structure you choose makes the difference on the type and amount of those deductions in addition to the tax rate paid.

Helping Small Business Owners Succeed

As a small business owner, you’re often required to fill multiple roles in order to ensure your business’ success. You’re often pulled in so many different directions it’s hard for you to concentrate on what you love doing most, the reason why you decided to open your own business in the first place.

At Five Star Accounting, we are a team of experienced accounting and bookkeeping professionals who are passionate about what we do.  With our combined experience in the small business environment, we understand the unique demands of small business owners. We can help you with your small business bookkeeping and accounting requirements so that you can concentrate on what you are most passionate about.

Don’t Go Down in Flames! Avoiding Burnout in the Small Business

Wow! How did you forget to update the new maximum pensionable earnings amount in the payroll system effective January 1, 2012? Was it because you were too busy trying to catch up with the bookkeeping? And when did the mileage rate go up for employees using their personal vehicles to make business deliveries? Perhaps it was when you were driving around town to meet with potential clients, since business growth depends on your networking abilities.

If these scenarios sound familiar then you’re on the path to small business owner burnout. One of the first symptoms to appear is stress from filling multiple roles as owner, employee supervisor, customer service representative, bookkeeper, manager, purchasing director, marketing director, salesperson and human resources director. Another common symptom is important tasks not getting done in a timely manner or not getting done at all. For example, a frantic order is placed with a supplier – maybe not at the best price, either – because the business is about to run out of essential supplies.

The Business Finances – Get Reports Monthly not just Yearly!

As a small business owner, one of the most alarming symptoms is having no idea how the business is doing financially. Sure, you may keep a close eye on the bank balance but do you know if you were profitable over last quarter or even the last month? You need regular financial statements to help you navigate your business decisions. Perhaps they haven’t been printed because the accounting software needs updating, there’s a backlog of postings and account balancing to clear up, and you have no idea how to record the purchase of the new equipment as a depreciable asset. So unfortunately, you remain oblivious as to how your business is operating financially on a regular basis.  One of the first facts you need to realize as a small business owner is that buying accounting software doesn’t turn you into a bookkeeper or accountant. The power of the accounting software is often not even utilized by entrepreneurs because often they don’t know how to create and interpret management reports. These reports can help the business owner manage the business better, smarter and more efficiently.

Don’t Succumb to Wearing “Too Many Hats”

One danger sign of a business owner unable to manage business growth is when he or she believes no one else is qualified to do certain jobs. This individual then keeps taking on more and more work – wearing too many different hats. Instead of working smarter, the owner works harder and in the process falls behind. A better approach is to identify your strong skills and then determine the work that can be outsourced to professionals. Outsourcing your bookkeeping and accounting to a company such as Five Star Accounting is a good place to start because a professional can ensure the business records are kept current and that you have the financial information needed to grow the business. It’s hard to grow when you’re always looking back at work that should have been done already.

Five Star Accounting offers expertise in small business financial management.

The staff can assist by relieving you of the detailed recording and reporting, ensuring records are maintained according to accounting standards, preparing accurate financial and cash flow statements, and meeting government reporting requirements in a timely manner. Instead of counting receipts, you can spend your time strategically managing business growth and achieving financial goals. And who knows – you may just be able to make the next family birthday party or take a Sunday off to rest. The only flames you should be looking at are in the barbeque. Doesn’t that sound so much more delightful than burnout?

The Importance of Accurate Accounting

Are you aware of all the current and new tax laws and regulations? Are you keeping up with currency fluctuations with our neighbours to the south? How is the stock market impacting your business? Today’s small business owner has to wear many hats, and the same can be said of small business accountants.

Gone are the days when their only tasks were keeping up with tax returns and tracking where a company’s money was going. Today’s small business accountant has to sift through a maze of ever-changing rules and regulations while maintaining an accurate paper trail in the event of an audit. In other words, a good accountant is far more than a “bean counter.” Think of a good accountant as a trusted business advisor.

Pay Attention to Detail
Accuracy and attention to detail should be priority No. 1, especially for small business accountants who are responsible for recording, reviewing and auditing all of a company’s finances. The savvy accountant should also keep up with all the latest accounting software to ensure accuracy. The penalty for failing to keep track of your finances goes far beyond an audit; accurate accounting can make the difference between whether a small business survives or thrives.

Partnership with Common Goals
Where do you see your business in five years from now? Ten years? Today’s accountant will work with you on your goals and hold you accountable by creating, and executing, a sound business plan. After all, no one knows your company’s finances better than you and your accountant. Communication between you and your accountant, therefore, is vital to your company’s future.

Keeping your goals in mind coupled with attention to detail will provide more accurate accounting results for your business.  At Five Star Accounting, we are more than accountants and bookkeepers.  We use our business expertise, combined with our accounting backgrounds to help you achieve your goals for your small business.

We are a Better Solution for Small Businesses

At Five Star Accounting, we understand the importance of time to a small business owner. That’s why we want to work with you so that you can maximize the use of your time.  We take care of your accounting and bookkeeping so you can focus on your business.  We have a dedicated team of accounting specialists that work closely with you and learn the operations of your business.  The result is an accounting solution that is tailored to your needs.  Contact us today to find out whether you would benefit from Five Star services.

Welcome to Our New Site!

Since its founding, Hospitality Solutions Inc has gone through significant change and growth.  From our humble beginnings serving the hospitality industry, we have come a long way.  To keep up with the natural growth of our company, we are proud to announce that Hospitality Solutions Inc. has become Five Star Accounting Inc. to better represent our client’s businesses and their unique needs.

Five Star Accounting has become one of Winnipeg’s top outsourced accounting and bookkeeping services.  We have the tools and expertise to offer tailored accounting solutions for small businesses.  We understand the constraints and limitations of a small business, while at the same time recognizing the tremendous growth opportunity of each of our clients.  When your business grows and your needs change, we grow along with you.