Tag: business plan

Back to School & Back to Business 2020

Under normal circumstances at this time of year, kids start feeling that “back-to-school” anxiety. This year has a whole different kind of stress attached to it. And even if you’re not a parent, these feelings also apply to your business.

We may be in Stage 3 of reopening, but many small business owners are still unsure how to move forward. We find that the best way to work through anxiety is to assess and plan based on real information. Here are a few ideas on how you can get a handle on things, and prepare for everything Fall of 2020 has in store.

It Starts with Your Books

Facing your books is the beginning of planning and moving forward in this pandemic world. Don’t have a panic attack. The best thing you can do is understand your numbers, assess the health of your business, and make informed decisions.

If your business was closed throughout the first stages of the pandemic, the state of your books will reflect that—it’s not fun, but this is data you need to face.

To figure out how to pull yourself out of the hole that the pandemic has may have put you in, you need to know everything about your current financial situation. We can help you analyze the information. With our experience with small businesses, we can often find places where they can cut costs and correct deficiencies to save you money. And every cent matters in this market.

Oh, and if you’re worried about your personal finances, we can help with that too.

Invest in Online

It’s crazy to think that only six months ago, few people had ever heard of Zoom. Now, it seems to be the video conferencing app of choice for countless businesses around the world.

Even though things like schools and businesses are reopening, there will still be an increased emphasis on the digital side for the foreseeable future—or maybe even forever! With this in mind, it’s important to invest in your digital assets.

For example, if you haven’t updated your website in years, you should get on that immediately. Your website is your digital storefront, and given that many people will still be remaining inside, it’s the only storefront they will see! Also, take a look at reinvigorating your social media accounts to engage directly with your clients and customers. What about sprucing up or starting a new email marketing campaign? Since face-to-face contact is out, finding new ways to keep in touch with your customers can help. And with digital advertising, you can gain visibility with new customers at a fraction of the cost of traditional marketing.

If you sell products, a great online shop could completely transform your business. These days there are so many options to choose from; Shopify, Woocommerce on WordPress, and Squarespace are just a few options. A great online shop combined with some savvy social media marketing could push your business ahead this fall, just in time for the holiday season.

If you run a restaurant or a service-based business, make sure your menus and offerings are clear and appealing. A good copywriter can help you entice potential customers while also optimizing your keywords for Google. And now might be the right opportunity to consider an app for your business.

Now is also a good time to invest in some upgraded technology for both you and your children. For example, most laptops’ webcams are terrible, resulting in a horrible image for digital conferences and remote learning. Similarly, the built-in microphones usually aren’t great either. By investing in a decent quality webcam and microphone/headset, you can vastly improve your digital networking capabilities. In this environment, it’s an investment worth making.

Create a Revamped Business Plan

If you wrote a business plan before March 2020, you’ve likely thrown it out the window by now!

Even though the world has changed, it’s still essential to have a business and financial plan in place to chart your path for future growth, with your goals, hopes, dreams, challenges, and solutions assessed and prepared. We’ve been helping many small businesses with the financial side of their new business plan, giving them some direction moving forward into the fall.

We Can Help

If you’re experiencing some anxiety about your business right now, that’s entirely natural. After all, things are still changing and we don’t know where this pandemic will end. But by starting to make some plans for your business, you can take back some control and get a better grasp on things. This will certainly help reduce that anxiety!

If you need help understanding your numbers and your business’s financial health, contact The Number Works today. We can help you take control of your finances and create a financial plan for the months to come!

Managing a Small Business During the Coronavirus Pandemic

Managing a Small Business During the Coronavirus Pandemic

Are you worried about the impact of COVID-19 on your small business?

Probably! This is a tough time for all of us!

In just one week, it seems like everything in the world turned upside down. COVID-19 has had an unprecedented effect on our society in modern times, with social distancing being practiced on a mass scale to prevent the rapid spread of the virus. This situation has forced small businesses all across the country to either temporarily close or dramatically change their daily operations.

Like all Canadians, we’re watching all of the new developments of COVID-19 with rapt attention—and especially those that impact Canadian businesses. From the stock market crashing to bars and restaurants being closed indefinitely, it’s currently a scary state of affairs.

What’s important to remember, however, is that this *is* temporary. Things will likely swing back to normal (or close to normal) in a few weeks or months. When that happens, you want your small business to be in a position where it can rapidly bounce back from the damage caused throughout the crisis.

Here at The Number Works, we don’t have all of the answers, but we can certainly provide some financial advice that might help you navigate through these challenging times.

You Still Need to Think About Your Taxes

The good news is, we’ve all gained more time this tax season. The CRA has deferred filing due dates as a result of the hardships of the COVID-19 pandemic. Individuals (other than trusts) now have a due date of June 1st, 2020.

If you’re expecting to receive benefits under the Goods and Services Tax credit (GSTC) or the Canada Child Benefit, we encourage you not to delay filing as those credits will surely come in handy during these times.

Trusts with a taxation year ending on December 31st, 2020 now have a filing due date of May 1st, 2020.

The CRA will allow all taxpayers to defer until after August 31st, 2020 the payment of any income tax amounts that become owing on or before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.

Even if you aren’t expecting tax credits, now while there’s some downtime is a great opportunity to get organized and move on your taxes. Please get in touch with us if you need any help.

Communicate With Your Customers

Whether your business usually operates out of a brick-and-mortar location or not, now is the time to communicate with your customers online. Use social media and, if you have a collection of email addresses, a newsletter system to reach out and keep your clients informed.

If you haven’t already done so, it’s also a good idea to send out an email addressing COVID-19 and any changes that your business is making. That might be to business hours, operations, sanitizing, or any kind of safety adjustments.

If you’re stuck at home, you could spend some additional time every day working your business’ social media accounts. By commenting and interacting with your customers online, you’ll be engaging with them just as much (if not more) than you did in person. This strategy can be essential to keep your customer relationships secure throughout the crisis.

Put Your Focus Online

Shifting your focus online at this time might be the only way to “keep in business.” While we’ve already mentioned email and social media, there are other ways to engage with your customers digitally. For example, your website.

If you haven’t updated your website in months (or even years), this is the perfect opportunity. There are going to be more people online than ever over the next few weeks, so you want to be putting your best foot forward. Polishing up the webcopy on your site, posting updated photography and graphics, updating your news or blog, or giving your website a full facelift can be excellent ways to improve your business while you’re stuck at home.

Even better, these improvements will pay off even after we’re all safely back at work!

Work On Your Future Plans

At times like these, it can be difficult to remember that things will get better. But as a small business owner, you need to keep an eye on your future plans now.

If you haven’t already got one, now is the time to implement an emergency savings system for your business. Think about how you can put away savings for your business so that in case of any future emergency, you have some money put away for a rainy day.

There’s really a lot of planning you can do right now, while things are slow. By taking some steps today to refine your product line, generate new marketing campaigns, and reexamine your finances, you can put yourself in an even better position when everything has reopened for business. And if you need any help with the financial side of that, we’d be happy to help!

Bringing It Home

Just like every small business across Canada, The Number Works is having to adapt quickly to everything that’s happening. We may be working from home, but that certainly doesn’t mean we’re lounging around in our PJs! We’re crunching the numbers and helping out our clients wherever we can to weather this storm.

If you’re looking for some help with your tax returns, or simply want someone to take a look at your finances, The Number Works would be happy to help. Contact us today, and we can get started helping you manage your small business’ finances throughout this pandemic.

Bookkeeping New Year's Resolutions

Bookkeeping New Year’s Resolutions

Do you always keep your New Year’s Resolutions?

Unfortunately, studies have shown that most new year’s resolutions simply don’t work. We enter into the new year with the best of intentions, planning on making significant changes to our lives, but before we know it… it’s February, and we haven’t taken any steps towards our resolutions.

One of the reasons for this is because most resolutions resemble wishes rather than actual goals. They are too general, e.g. “I want to lose weight,” or overly ambitious, e.g. “I want to be able to run a marathon by February.” If you want to make a new year’s resolution that you’ll keep, it needs to be both realistic and actionable.

This year, why not make your new year’s resolution about your small business’ bookkeeping? There are a ton of concrete steps you can take to make your bookkeeping habits and practices even better for the upcoming year. Take on any of the following resolutions, and you’ll not only be able to keep them, but you’ll also see some major positive changes to the way you handle your personal and small business accounting!

Resolve to: Digitize Everything

The days of keeping your receipts and invoices in a series of shoeboxes are long gone. Nowadays, thanks to digital technology, you can make sure that everything is optimally organized so that you can find any document in a matter of minutes (if not seconds).

While you do need to keep paper copies of all your receipts, you should be creating digital copies that are correctly named and organized on your computer. It isn’t as difficult as you might think, as there are dozens of high-quality apps that allow you to simply take a photo of a paper receipt with your phone. These apps will then automatically name and file that record into the proper place in your bookkeeping system.

Creating a system like this can have countless benefits. First, searching for a necessary receipt is going to be easy as pie. Just type the name into the search, and the corresponding document will pop up. If you’re using accounting software, it will help you keep track of all your receipts, organizing them for you by date and type.

It’s also going to be easier to work with a bookkeeper or accountant when your financial documents and records are already “filed” and organized on your network!

Resolve to: Hire a Bookkeeper

One of the biggest time sucks for small business owners is doing their own bookkeeping.

Bookkeeping is something that needs to be constantly updated and maintained. If you’re a super busy small business owner, that can result in updating your financial records being put on the backburner. Over time, this ends up becoming a huge backlog of work that you MUST do to keep your business happily humming along.

When you hire a professional bookkeeper, you’ll have the time to focus on the job of growing your business rather than having to monitor and update the books every day. The cost of hiring a bookkeeper is often more than covered by your increased productivity, and that’s not even mentioning the levels of stress that you’ll be avoiding!

If you don’t currently have a bookkeeper, you’re probably dreading going over all of your year-end financial records. By hiring a bookkeeper, you can instead rest easy and enjoy the start of the new year!

Resolve to: Modernize Your Bookkeeping Software

Do you keep all of your financial records in an Excel spreadsheet? Now, there is nothing wrong with that—Excel is a fantastic program! But wouldn’t it be better if you could use a program designed specifically for bookkeeping and accounting, rather than continually having to customize spreadsheets to your desired specifications?

By using online cloud-based accounting services like Xero or Quickbooks Online, you’ll be streamlining the way you input your financial information and records. You’ll also be ensuring that everything will be safely backed up to the cloud. If the unthinkable were ever to happen, all of your financial information would be secure.

At the start of this blog, we told you that most people don’t keep their new year’s resolutions. Why not be an exception to that rule this upcoming year by making your resolutions into actionable plans and strategies that will simplify your life? At The Number Works, it’s our goal to help you keep all of your finances in order with exceptional accounting services. If you want to get the new year started right, please feel free to contact us today! We can’t wait to make 2020 the year that you get all of your accounting under control!

Year-End Bookkeeping Checklist

Year-End Bookkeeping Checklist

Are you ready for the winter rush?

The temperature is dropping, there’s snow on the ground, and there are countless items on your to-do list. Once again, the most wonderful time of year has arrived and, boy, can it be stressful!

This time of year, you have to deal with everything from shopping to dropping the kids off for their school holiday concert practice. There’s so much on your plate that it can be difficult to know where to get started. This is one of the reasons why we want to make it as easy as possible for you to take care of your year-end bookkeeping with this simple checklist. By getting these things out of the way in the next few weeks, you’ll be ensuring that you’re positioned for a fantastic year ahead!

Update Your Bookkeeping Records

Throughout the course of a year, your bookkeeping can get a bit disorganized. If you aren’t working with a professional bookkeeper who will keep everything tidy and up-to-date, then it’s important for you to check your records at the end of the year to confirm everything is in order.

First, make sure that you’ve reconciled every bank and credit card statement with what is in your bookkeeping records. This will tell you if you’ve missed (or even double charged) a transaction.

Next, review your last few months of financial statements to confirm that the numbers are correct and that transactions weren’t improperly labeled. Make sure that your physical inventory, assets, and supplies match up with the numbers you have on paper.

Finally, don’t forget to double-check your accounts payable and accounts receivable (if you use the cash accounting method, you may want to wait to send invoices until January to keep your taxable income lower)!

We admit, updating your bookkeeping records is not the most enjoyable task, but it’s going to be invaluable when you need to do your taxes next year. If you simply can’t find the time to do it, we’d be happy to get everything ready for you!

Budgeting

We understand why you might dread going through your books at the end of the year. So many numbers, so little time! But one way that you can help keep everything on track for the following year is to set up a detailed budget.

By using the knowledge you gained from updating your bookkeeping records, you can project a reasonably accurate yearly budget for your business. By knowing your likely future income and expenses, goals can then be set that will help you grow your business next year.

Your yearly budget should be broken down into periods, monthly or quarterly (or both). This will also help you focus on goal setting for smaller sections of the year.

It can also be helpful to get some additional eyes on your projected budget to make sure that everything is in line with expectations. This is another area where we can help!

Set Goals for the Year Ahead

To be clear, we aren’t talking about a New Year’s Resolution here.

New Year’s Resolutions rarely work because they aren’t goals; they’re more like wishes. You need SMART goals that you can genuinely achieve in the upcoming year. SMART stands for: specific, measurable, attainable, relevant, and timely.

It can be helpful to break up your desired goals for the year, allowing you to regularly check-in and see how things are developing. We recommend setting up monthly, quarterly, and yearly goals. If you really want to get into the thick of it, you can also set up daily and weekly goals to improve smaller aspects of your business like daily reporting or customer management.

Reflect On Your Last Year

For small business owners, it’s almost always about “what’s next?” You’re focused on growth and on making your company a success. But it can pay to take some time at the end of the year to reflect on everything that happened to you over the last 12 months.

So much can happen that whizzes by in the moment. By taking a close look at your yearly successes, failures, and struggles, you can know where to focus your energy next year. On top of that, remembering successes can give you a feeling of accomplishment to give you a nice boost! And remember all of those headaches and problems you were dealing with earlier in the year? You’re now past them! Rejoice!

Tax Planning

By doing all of this bookkeeping work at the end of the year, you’re going to be setting yourself up for a much easier tax time in a few months.

Effective tax planning is key to a business’ success. If you aren’t sure of where to find relevant tax credits and rebates that will help you keep more of your money in your pocket, The Number Works would be happy to help!

By starting early, we can put together a plan that will save you big money on your taxes. At The Number Works, we’ll position your finances to maximize your year-end expenses and lower your taxable income. We can also assist with setting up a personal budget! If you’d like some help getting your year-end accounting out of the way so that you can enjoy the holidays, please feel free to contact us today!

Make Better Financial Decisions By Better Understanding Your Income Statement

Make Better Financial Decisions By Better Understanding Your Income Statement

How often do you check your business’ income statement?

When you run a small business, information is your best friend. The more information that you have at your fingertips, the better the decisions you can make for your future. Being able to review your numbers and pull out key data at a moment’s notice is essential when you’re a small business owner.

One of the best ways to measure the health of your company is to check your income statements periodically. This is one of your company’s primary financial reports, sometimes referred to as the Profit & Loss Statement. This document is generated monthly, quarterly, or annually to provide an “in progress” snapshot of the current performance of your business.

What Is Its Main Use?

The primary use of the income statement is right there in the name. It’s a document that you can use to measure whether or not you’re bringing in money. “Bringing in money” doesn’t necessarily mean that you are saving money in the bank, however; to do that, you need to check your Cash Flow Statement.

The information contained in your income statement describes your net profit. In other words, your revenue minus your expenses will equal your net income.

Let’s Look at Revenue

When you generate income through your business operations, that’s your revenue. You might have a number of different revenue sources, depending on your business, which should appear at the end of each section of your income statement. This division can help you analyze which of your departments is performing best and where you might want to put your resources in the future.

This kind of information can be very useful for streamlining operations as it can help you focus in on the most profitable aspects of your business.

Let’s Look at the Cost of Sold Goods

If you’re an inventory-based business (as opposed to service-oriented), then the Cost of Goods Sold (COGS) is the key to understanding your income statement. Your COGS is the cost of your inventory sold within a given time frame. For example, if you buy approximately $10,000 worth of inventory and only sell 20% of it, then your COGS will be equal to $2,000. The rest ($8,000) can only be expensed once sold. Otherwise, it will be considered an inventory asset of your business.

Before purchasing inventory, it’s important to know what you already have in stock. That’s where your balance sheet can come in handy.

Let’s Look at Gross Profit

Gross profit can be boiled down to a simple equation:

Revenue – COGS = Gross Profit

This is a subtotal within your income statement and represents the revenue that you can disperse on your other expenses after you purchase your inventory. When this is expressed as a percentage, it’s called a gross margin. It can come in handy when you want to make decisions regarding your business taking on more expenses. It’s expressed through this equation:

(Revenue – COGS) / Revenue = Gross Margin

The Gross Margin will, of course, be different for various industries. You should do some research (or ask an accountant) to determine if your Gross Margin is comparable to your competitors’ as a metric of the health of your business. If it’s too low, it means that you are spending too much on inventory, or your sales prices are too low. This could indicate that you should be looking for more competitive prices for inventory or that you should increase your sales price.

Let’s Look at Fixed Costs

Fixed costs are the expenses that are easy to predict. They occur monthly, regardless of your overall sales or other costs. They can include your monthly rent, hydro, water, business and inventory insurance, marketing, and employee salaries.

This is another place where you might want to look at industry benchmarks to determine if you are overspending. For example, if your rent accounts for more than 50% of your fixed costs every month, you are likely paying too much. It could save you money in the long run to start looking for another location for your business and/or try to re-negotiate with your landlord. You could also consider cutting down on the space used for your business and sublease the rest. Always be sure to calculate the percentage of each fixed costs against your overall revenue.

Let’s Look at Variable Costs

These are the costs that vary month to month, depending on your sales and other occasional expenses. For example, if you start to sell more of your products, then the cost of packaging is likely to go up.

Your variable costs will likely fluctuate, depending on whether you are experiencing an increase or decrease in your sales numbers. If you are experiencing a temporary downturn of 20% in sales, but your variable costs remain constant, then you might need to explore some ways to cut down on that overspending.

Variable costs can vary wildly depending on if you are in a slow or rush season. You should constantly be tracking these costs through these seasons to make sure that you are slowing your spending during the slow season to save yourself money.

Basically, your income statement all comes down to this: to figure out your bottom line, you need to subtract your expenses from your gross profit. If you discover that you’re in the black, that’s great news—it means your revenue exceeds your expenses! Yay, profit! If you’re in the red, that unfortunately means you’re going to have to figure out how to shuffle things around financially to get yourself in the black. This can happen periodically, depending on variable costs during slow and rush seasons, so you always need to be on top of your income statement.

If you’re having trouble figuring out the areas where you are overspending and underperforming, we can help. At The Number Works, we can give you a more complete understanding of your income statements and show you places where you might be able to streamline your business. So, feel free to contact us today! We can’t wait to help you better understand all of your financial statements!

Is Incorporation a Good Idea for Your Small Business?

Is Incorporation a Good Idea for Your Small Business?

Are you a small business owner wondering if you should incorporate? Are you worried about costs and what will change about your business?

For most businesses, it’s actually not a question of “if,” but “when” to incorporate.

Incorporating a small business offers many potential advantages, as well as a few disadvantages. Whether the pros outweigh the cons depends a lot on your business’ individual situation.

With that in mind, let’s take a closer look at the advantages and disadvantages of incorporating a small business so you can determine what is right for you.

The Advantages of Incorporation

Limited Liability

Most people decide to incorporate their small business because it offers the advantage of limited liability. If you run a sole proprietorship, then you as the business owner must assume all the liability of the company. This means that as a sole proprietor, your personal assets, like your house and your car, can be seized to pay off any business debts.

However, if you incorporate your business, then you become a shareholder in the corporation. As an individual shareholder, your liability is limited to the amount you have invested in the company.

Furthermore, as a shareholder in a corporation, you can’t be held responsible for the debts of the corporation unless you’ve signed a personal guarantee.

Corporations Have Unlimited Lifespans

Did you know that even if the shareholders die or quit the business, or if the ownership of the business changes, the corporation will continue to exist? This is not the case when it comes to running a sole proprietorship. Thus, many people see this “immortality” as another advantage of incorporating.

It’s also easier to sell a corporation than it is to sell a sole proprietorship.

It Helps with Taxes

Once your small business becomes a corporation, you can figure out when and how you receive income from the company, which is a real perk come tax time.

If you’re incorporated, rather than taking a salary from the business as soon as it begins to generate income, you’re allowed to take your income at a time when you’ll pay less in taxes. You can also earn income from a corporation in the form of dividends rather than a salary, which can also lower your tax bill.

Lastly, if your business is incorporated, it may qualify for the federal small business deduction (SBD). The SBD is calculated at the rate of 10.5% on the first $500,000 of taxable income, which could lower your net corporate business tax to a much lower tax rate than what is applied to your personal income.

It’s Easier to Raise Money

There are more ways for corporations to raise money, which could help your small business grow and scale faster. Like a sole proprietorship, corporations can borrow and incur debt, but they can also raise money through equity financing. This means selling shares in the corporation to angel investors or venture capitalists.

Equity financing is a nice benefit in that equity capital typically doesn’t have to be repaid, and there is no interest on it. (However, you must remember that by issuing shares, you are reducing your percentage of ownership in your business.)

The Disadvantages of Incorporation

Added Paperwork

Once your small business is incorporated, you’ll have to file two tax returns every year, one for your personal income and one for the corporation, which means increased accounting fees.

Plus, corporate losses can’t be deducted from the personal income of the owner, as they can in a sole proprietorship or partnership.

It’s also mandatory for corporations to keep a minute book composed of the corporate bylaws and minutes from corporate meetings, the register of directors, the share register, and the transfer register. These are all corporate documents that must be kept up to date at all times.

It’s Not Always a Tax Advantage

Unfortunately, corporations aren’t eligible for personal tax credits. That means every dollar a corporation earns is taxed, whereas, if you run a sole proprietorship, you may be able to claim tax credits that you can’t claim as a corporation.

Less Flexibility in Handling Business Losses

If your business suffers operating losses as a sole proprietor, you can use the loss to lower your other types of personal income for that year. However, if you run a corporation, these losses can only be carried forward or back to lower the corporation’s income from other years.

Limited Liability Depends on Credit

While the main advantage of incorporating is limited liability, it can be undermined by personal guarantees and/or credit agreements. If a lending institution doesn’t feel that your corporation has sufficient assets to secure debt financing, they usually insist on personal guarantees from the business owner(s).

In this case, even though the corporation technically has limited liability, the owner still winds up being personally liable if the corporation fails to meet their repayment obligations.

It’s Expensive to Register a Corporation

Another disadvantage of incorporating is that it costs more to set up a corporation.

Why?

Because a corporation is a more complicated legal structure than a sole proprietorship or partnership, so it’s more costly to create. This includes the previously stated maintenance and related fees and increased accounting costs.

It’s Harder to Close a Corporation

Closing a corporation in Canada means you need to pass a resolution to dissolve the corporation, settle all payroll accounts, and send a copy of the Certificate of Dissolution to the Canada Revenue Agency. Then you must file your final tax returns for the corporation.

So Should I Incorporate My Small Business?

The answer is, well, maybe!

Now that you’ve read about the advantages and disadvantages of incorporation, it’s time to discuss your personal situation with your accountant and lawyer before making your final decision.

Here at The Number Works, we can help give you a much more exact picture of how incorporation might work to benefit your business and if all the trouble and cost of incorporation is worth it for you.

So don’t hesitate to get in touch with us today and let us get behind your success!

How to Start the New Year Off on the Right Foot with Your Accounting

How to Start the New Year Off on the Right Foot with Your Accounting

With the new year is upon us, it’s the perfect time for us to make resolutions to better our health, finances, or social situations.

But did you know that as a business owner, New Year’s resolutions offer you a fantastic opportunity to make some positive changes that will contribute to your future success? Especially when it comes to your finances and accounting!

So, if you’re looking to start the year right, here are some essential accounting tips that will help you tackle the daily accounting challenges of your business and get you on track for success!

Plan Ahead

As the old saying goes, “If you fail to plan, you’re planning to fail.”

As a business owner, planning your fixed expenses for the whole year, rather than a monthly basis, will help you start 2019 off on the right foot. Don’t forget to take seasonality and other potential downturns into account so you can be sure that your minimum expenses are always covered.

During your business’ peak sales months, plan to set more money aside. This will help you cover your expenses if harder times come later in the year. By getting a firm grasp on your company’s fixed expenses, you will have a clear view of your business’s future and how to plan for taxes appropriately.

You should also take this opportunity to plan for emergencies. Determine how much money you can set aside for any significant, unexpected expenses, such as losing a major client, economic downturns, or other crises. The amount of money that needs to be in your emergency fund depends on the minimum expenses necessary for your company’s survival. A good rule of thumb is to set aside at least six months worth of expenses.

But what if you can’t afford to save that extra money right now? In that case, it’s a good idea to make sure you have a line of credit set up with your bank so that if something unexpected takes place, you can use that money (with an affordable interest rate) to keep your business afloat.

Take Time to Review Your Business

Set aside some time to reflect on 2018 and determine how your revenue and profits compared to the previous year. Determine if your sales numbers are trending upwards or downwards. And ask yourself some critical questions such as, how much money did you have to spend in 2018?

Did you make a list of goals for 2018? If so, did you meet those goals? Taking the time to review 2018 should help you figure out how your company has changed over the past year. If your business hasn’t improved, analyze the figures to find out why and what you can do to see more growth in the new year.

Leverage Technology

It’s 2019, which means the days of tracking your expenses manually are over! If your business isn’t using computer software to help keep track of your finances, then it’s time to make the leap!

The good news is multiple technologies allow you to track all your expenses quickly and efficiently, so you can choose the one that will be a perfect fit for you and your company. By leveraging accounting software and cloud-based technology, you’ll be more informed about your business’ finances, saving you both time and money!

Switching to computer software or cloud-based technology will also help provide a near real-time idea of how your money is being spent, as well as the records to prove it.

Get a Head Start on Taxes

Not unlike how you should set aside money for emergencies, you should also set aside money to cover your taxes. I highly recommend meeting with your accountant at least twice a year – once in May and once in October. This way, you can get a sense of what your business’s taxes will look like in the coming year. Plus, understanding how your financial picture is evolving can help you keep up with how your business is growing and how much you’ll need to cover what you’ll owe.

By seeking professional tax planning advice, you’ll not only feel confident that your business is complying with federal and provincial tax regulations, but you’ll also ensure you’re getting all the deductions and credits your company might qualify for.

Hire a Professional Accountant

Every tip and trick I mentioned above will be made that much easier by hiring a professional accountant. Although it may seem like an added expense, hiring a professional accountant will actually save you money in the long run, plus your accounting fees are tax-deductible!

So, if you’re looking to make 2019 your best year yet, outsource your bookkeeping and accounting needs to The Number Works! You’ll receive all of the benefits of competent financial reporting without the headache of needing to onboard, train, and pay a full-time employee.

The Number Works is your one-stop shop for the best accounting in Hamilton and the surrounding Southern Ontario area. In fact, no matter where you are in Ontario, I can help your business seamlessly using virtual technology.

I offer a range of professional services including full cycle accounting, financial statement analysis, strategic planning, and taxes. Combine this with my passion for process, efficiency, simplicity, and helping small businesses succeed, and you’ve got the winning formula to help start the new year off on the right foot with your accounting.

So don’t hesitate to get in touch with The Number Works today and meet all of your business’s New year’s resolutions!

Why Hamilton, Ontario is a Great Place to Start a New Business

Why Hamilton, Ontario is a Great Place to Start a New Business

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Did you know that Hamilton is southern Ontario’s most populated and economically active region?

Over 1 million* educated and skilled workers live within a 30-minute drive from the city. Meaning that if you live in the Greater Toronto Area and you’re thinking about starting a new business, you might want to shoot Hamilton to the top of your list!

Here’s why…

You’ll Find the Support You Need

It’s easier to start a small business when you have the necessary support and information nearby. The Hamilton Small Business Enterprise Centre offers every budding entrepreneur the tools and support they need to grow their business. The Centre is a one-stop shop for business information, guidance, and professional advice on how to start and run a thriving business.

The Hamilton Small Business Enterprise Centre offers free consultations on:

  • How to prepare a business plan
  • How to identify the rules and regulations that could affect your business
  • How to determine which government and private sector programs could be useful for your business
  • How to get help during the critical start-up and growth phases of your business

You can also sign up to take part in four different workshops covering the following topics:

  • 10 Steps to Starting a Business
  • Business Planning
  • Marketing Strategies and Social Media
  • Bookkeeping and Taxation Basics

But what if you have more in-depth business questions? Maybe you need to know about zoning, how long it would take, or how much it costs to set up or expand?

The One Stop for Business part of The Centre is available to help answer all these questions, in addition to having all of the applications you need to complete and if you need a licence or not.

What it really comes down to is that Hamilton has a very strong sense of community, a great #shoplocal spirit and pride, and part of that it the support network for startups. With all this support in one easy to access place, it’s really a no-brainer! Hamilton is an ideal place to start a new business.

You’ll Attract Employees

Of course, there’s so much more to Hamilton, Ontario than just the Small Business Enterprise Centre.

For example, Hamilton is home to McMaster University and Mohawk College. These institutions are excellent resources when it comes to research and innovation/apprentice training.

Moreover, the graduates of these fine institutions, along with their relative proximity to other towns and cities in the area, offer a pool of over one million skilled workers available to you. Now that’s a lot of talent to pull from to help your business grow and succeed!

But what about if you were hoping to bring some talent with you when you relocate? Well, the cost of living in Hamilton is far cheaper than in a big city like Toronto. Hamilton also has some of most comprehensive quality medical care in the province, including six hospitals and a cancer care centre.

As a city, Hamilton doesn’t only concern itself with big business and industry; it also has a focus on the neighbourly things that matter, such as parks and playgrounds. This makes it not only the ideal place to start a business, but also a family!

You’ll Find All the Necessary Infrastructure

Did you know Hamilton is a transportation hub of Ontario?

This city boasts the Port of Hamilton, is in close proximity to railway links, and it has the 400-series highways. What’s more, the John C. Munro International Airport acts as a large courier/cargo hub, perfect for any international shipping and receiving your business might need.

Another bonus to starting a new business in Hamilton is that it has a lot of available land for industrial development at a fraction of the prices in and around the GTA.Plus, the Hamilton agricultural sector is exploding, to the tune of $1.26 billion annually. So, if your business is related to this sector, you don’t want to think twice. Hamilton is the perfect spot for your entrepreneurial initiatives!

You’ll Have Access to the Best Accountants

Here’s a professional tip: one of the best ways to grow your Hamilton-based business is to partner with a professional accountant that you can really trust. The Number Works Professional Corporation is located right here in Hamilton. We’re a virtual accounting, and financial coaching firm that’s here to help any entrepreneurs in Hamilton and the surrounding Southern Ontario area.

We’d love to help you get started with your new Hamilton business, or help get your existing business on the right track. Your business will benefit from many of our financial services, including full-cycle accounting, financial statement analysis, strategic planning, and taxes!

By outsourcing your accounting to us, you get all the benefits of competent financial reporting without any headaches from onboarding, training, or paying a full-time employee. The Number Works is your one-stop shop for all your accounting needs.

So, if you’re looking for an accountant who has a real passion for helping your business succeed, let’s connect! Together we can make sure your new business in Hamilton, Ontario is a wild success!

 

*https://www.hamilton.ca/moving-hamilton/economic-development/doing-business-in-hamilton

How to Get Your Accounting in Order Before the End of the Year

How to Get Your Accounting in Order Before the End of the Year

Time flies when you’re having fun, but it might fly even faster when you’re running your own small business.

The new year is fast approaching, signifying a time to set personal goals, make improvements to your life, and focus on the future. But the new year is also a time when you want to look ahead at where your business will be going and the goals you wish to achieve in the new year.

And what’s the best way to set goals for your business and make improvements with a focus on the future?

By getting your accounting in order, of course!

Proper accounting is the foundation of any successful business, so whether you work with a CPA, a bookkeeper, or DIY, this year-end checklist will help you get your accounting in order so you will be all set for the next twelve months!

1. Review Your Profit & Loss Statements

Number one on your list of things to do before the end of the year is to review your profit and loss statement.

Why? Because it’s a helpful reminder about how your company is spending money. Doing a check now will also ensure that all your expenses are categorized, making it much easier to reference them in the new year.

It’s also a good idea to go back over your Profit and Loss Statement one more time after you reconcile your bank accounts, receipts, and other potential concerns.

Pro Tip: Accounting software such as QuickBooks will sync directly with your bank account or credit card statement to help you categorize your expenses.

2. Balance Your Bank Accounts and Credit Cards

Another critical accounting tip for the year-end is to ensure that your financial statements match up with your bank and credit card accounts, as well as your year-end statements.

If you’re using online accounting software, make sure that your ledger balance matches too.

3. Get Your Shoebox Organized

Are you the type of person who keeps your business receipts in a glove box, shoe box, or drawer? If so, it’s definitely time to upgrade your organizational system!

To keep on top of things in the new year, you should separate all your expense receipts into categories, then tally each category. By organizing your piles of receipts as you go instead of keeping them in a big jumbled mess, both you and your accountant will be much happier around tax time.

Of course, this is easier said than done. Even the best organizational system can break down, every now and then. Whether you use cloud-based accounting software or stubbornly cling to the shoebox system, if you find yourself with unrecorded transactions by the end of the year, then now is the time to get organized.

Bonus Tip: Be sure to copy down your thermal receipts as they tend to fade over time.

4. Get on Top of Your Accounts Receivable

Did you know CB Insights found that up to 29 percent of startups fail due to cash crises? That’s why, before the year is over, you should try to close out all outstanding receivables.

You should aim to collect all unpaid invoices and reissue or void checks as necessary by the end of the year. By cleaning up reconciliation issues and collecting as much as possible, you’ll be able to maintain better control of your company’s cash flow. Expediting payments before taxes are due will also be a big help.

5. Take Physical Inventory

If you’re running a service-based business, you probably don’t need to take physical inventory. But for those who run a product-based business, it’s crucial to get an accurate account of your inventory before the year ends.  

Make sure to match your inventory with your end-of-year balance sheet. Knowing how much you’ve spent on inventory throughout the year and its current value will also greatly help your bookkeeper.

6. Asses Your Accounting Practices

The start of a new year is the perfect time to reconsider whether the accounting system you’ve been using all year has done the job.

Ask yourself the following questions:

  • Have I been able to input all the financial data I need to track?
  • Have I gotten the financial information I need to make informed decisions and fulfill all tax and government requirements?

If you answered “no” to any of these questions, then it’s time to implement some changes to your accounting system.

You may need to consider hiring more staff to handle data entry, or maybe it’s time to try a different accounting software solution.

No matter what the issue is, if you take the time to resolve it now, you’ll ensure that your business continues to grow and succeed in the year to come.

7. Take Time to Look Back and Plan Forward

The end of November is a great time to review the past year’s performance and stack the results up against your preset goals and milestones.  You can then use this information to help you judge the viability of your upcoming year’s objectives.

Pull out your original business plan, objectives, and/or action plans, then start to revise them by setting new goals and action plans for the future. Making visual and tangible financial goals at year’s end can be a useful guide for where you want your business’ books to go over the next 12 months. If you do this now instead of waiting until December 31st, you’ll have a jumpstart on your new plans as soon as the New Year begins. This will help make your next fiscal year even more profitable.

 

Every emerging company wants to grow, but many don’t establish the procedures that are required to make growth happen. So, take action before the end of the year and tick these procedures off your checklist. Not only will this help your business scale, but you’ll also be better prepared when tax time rolls around.

We Can Help

If you’re feeling overwhelmed trying to get your business ready for the holidays and New Years, don’t worry! An accountant can really help!

If you find that you don’t have the time, need a second pair of eyes, or would like a more detailed review of what all the numbers mean, we’d be more than happy to work with you!

Get in touch with us today! We’ll help review your financial position and make sure your business is prepared for the end of the year.

Hiring Bookkeeper

The Benefits of Hiring a Bookkeeper for Your Small Business

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Did you know that hiring a bookkeeper for your small business could actually save you money? Making mistakes add up, especially if those mistakes result in an audit or even bankruptcy. Plus, 30 percent of small businesses fail within two years and it’s because their expenses outweigh their profits. Yikes! So it’s clearly important to keep an accurate book—and what better way to do that than by hiring a professional bookkeeper?

There are so many benefits to hiring a bookkeeper for your small business. We’ve listed the top 8 reasons here:

1. Dedicate Your Time To Your Core Business Needs

As the founder of your small business, it’s best to stick with what you’re good at. Unless you’ve founded a small accounting business, chances are your strengths lie in other areas… And those other areas need your full attention.

There’s no better way to free up your time so that you can focus on what you’re best at than by leaving the financials in the hands of a capable bookkeeper. With the time that you aren’t spending floundering on your books, you’ll have time to devote to strategy, marketing, funding, and other key areas that require your focus. You’ll have peace of mind knowing that your books are accurate and real reports to show you your profit and loss and other key reports to help you grow your business.

2. Improve Your Work-Life Balance

As a solopreneur or founder of a small business you’re busy, busy, busy! There’s so much to do and while being a hands-on business owner is crucial to any business’ success, you still need some time at the end of the day or week for yourself and your loved ones. No matter how great of a multitasker you may be, every person needs balance in order to stay healthy and not burn out.

Burn out is a serious risk for entrepreneurs and as much as you may think that you can do it all, at some point the stress will catch up with you and your business will suffer. So if you want to see your business grow, don’t forget to make some “me time” Letting a bookkeeper handle the finances will take a huge load off your shoulders!

3. Two Heads are Better Than One

Of course, you’ve got a handle on your business—you rock and we don’t doubt it! But it never hurts to have a second set of eyes to help catch mistakes, catch things that the first set of eyes might have missed, or to give a fresh perspective on the state of your business.

A bookkeeper won’t just put the financials in order; they’ll also run reports that show how you’re really doing each month, where the funds are going, and how your efforts are paying off. By having a professional crunch those numbers, you’ll be able to get the big picture and ensure the growth of your business.

4. Avoid the Monotony

We’re sure that your business lights a fire in your soul that motivates you every day, but it’s still hard to imagine that the financial aspects of your business are what get you out of bed in the morning. You likely have no passionate feelings about excel spreadsheets full of numbers or keeping track of payroll. That’s ok! Because your bookkeeper actually enjoys those tasks!

It makes sense to hand over your financials to someone who really does get excited about numbers. Not only will you benefit from not being dragged down by a task you don’t like and haven’t been particularly trained for, but you’ll also be able to pump twice as much enthusiasm into your business; your own, uninterrupted enthusiasm plus the energy from your passionate numbers person. It’s definitely win:win.

5. Get Everything Paid on Time

Did you know that if you miss a bill or forget to pay something important, it will significantly impact your business credit? Uh oh! Between meetings with clients,  troubleshooting daily issues, and focusing on the future of your startup, it’s quite likely that things fall through the cracks along the way.

Often bills that need to get paid are forgotten. Avoid the stress of late bills by putting a bookkeeper in charge! And what about collections? You don’t want to forget to collect your money, do you? Your business can’t afford to let money matters slip. With the help of a reliable bookkeeper, you can rest assured that everything is paid on time and you can get back to doing what you love—running your small business.

6. Take the Hassle Out of Tax Time

Even if you’ve finally figured out payroll and you’ve got a system down for outstanding invoices, when it comes to filing your business taxes you definitely don’t want to make a mistake. Based on the type of business structure you’ve created for your startup, you’ll have many tax requirements, HST payments, and other filings. This can be a major point of stress for many business owners!

The first great thing about working with a bookkeeper throughout the year is that when it comes to tax season, everything will already be organized. This is HUGE in terms of stress management! Your bookkeeper will have already won most of the battle by keeping your books in tip top order.

Secondly, as for your final tax details, a bookkeeper is a pro; they’ll know what tax credits are available to you and how to optimize your tax filing for the best possible results. It’s ideal to find a bookkeeper who can handle your taxes in addition to payroll and other financial issues for full peace of mind and no headaches.

7. Keep Your Cash Flowing

Late payments are a problem for many small businesses, and that’s true for your own clients who owe you money. This can put a serious damper on your cash flow. Often your clients will have outstanding invoices and these can start to really drag your business down.

Seeing as you’re so busy, you may not realize that there are late payments infringing upon the cash flow you need to keep your startup running smoothly. But having a bookkeeper working for you will help you stay on top of these issues.

Your bookkeeper can send out reminders to make sure your cash flow remains optimal and, bonus, this will look good if you ever decide to seek out funding because you can show a positive cash flow that you might not have been able to show without that financial help.

8. Keep Costs Down

Although it may seem logical to do everything yourself to save money, that’s not actually the truth of most small business dealings. In fact, a professional bookkeeper actually saves you money because there’s a reduced level of risk from human error, lack of knowledge, missed payments, tax obligation due dates, and delayed accounts receivable.

As we’ve all heard before; time is money. You need to be smart about how you choose to use your time. The time you spend on your books could be used instead towards bringing in more clients, delivering excellent customer service, and bringing in the revenue to see the growth you want.

Plus, there are many options for hiring a bookkeeper and rather than bringing someone on payroll full- or part-time, a freelance bookkeeper can be very cost effective. When you outsource your bookkeeping to a professional who is themselves a business owner, you don’t have to pay payroll taxes, sick leave, vacation, etc. that you would have to pay when hiring an in-house employee keeping your costs down even more!

Outsourcing your bookkeeping is quite possibly the smartest step that a small business owner can take towards their overall business success. From saving time and money, to focusing on your expertise, and increasing cash flow, a bookkeeper makes good business sense for your startup.

 

Here at the Number Works we’re always excited to help out small business owners. We would love to get behind your success. If you have any questions, please don’t hesitate to contact us today!