Tag: small business owner

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.

First Time Filing Your Taxes as a Small Business Owner? This is What You Need to Know!

First Time Filing Your Taxes as a Small Business Owner? This is What You Need to Know!

Have you already completed your taxes for your small business?

Chances are that you just let out a big sigh, followed by “…no.” Well, don’t worry! You still have some time before you need to get your business and personal tax returns to the CRA. Of course, you might also be incredibly busy between now and then—after all, running a small business is one of the most stressful jobs you can have!

If you’re concerned about filing your small business taxes, here are some of the things you need to know, from the professionals here at The Number Works!

What Actually Is a Small Business?

A small business can be just about anything that brings you income. If you’re self-employed, then you have a small business, even if it isn’t incorporated.

That said, the structure of your small business will play a significant role in how you file your taxes.

If you’re self-employed, then everything can be filled in the T2125, Statement of Business Activities form. This form informs the CRA of your income and deductions.

If, on the other hand, you’ve incorporated your business, you’ll need to file a separate return. This is a Corporate Tax Return, or a T2, for the business. All of your business’ income and deductions end up in this return.

You must know the forms that you need to fill out. The last thing you want is the CRA knocking at your door because you didn’t fill out the right ones. If you’ve filled out your small business’ taxes in the previous few years, you can likely use them as a template. If this is your first time filing your taxes as a small business, then you might need a little bit of help (which we would be thrilled to provide).

The Importance of Keeping Records

The main reason why so many people have a difficult time during tax season (when it comes to both their business and personal returns) is because of poor record-keeping.

When you are running a small business, you can’t just keep shoving all of your receipts and invoices into a shoebox sitting under your desk (you shouldn’t be doing this with your personal taxes either, FYI). Instead, it would be best if you made sure that your books are being kept up-to-date continuously, with detailed financial information.

Maintaining the books is one of the reasons why many small business owners hire a bookkeeper year-round. They can ensure that everything will be exactly where it should be. A professional bookkeeper makes tax time a snap, as you don’t need to dig through dozens (or even hundreds) of documents to find the ones that you need.

The Structure of a Self-Employed Tax Return

There are three parts to a self-employed tax return: Identification, Business Income, and Business Expenses.

Identification is simply the details about your business, including its name, address, industry code, information on partners or co-owners, and the fiscal period you’re covering (usually the fiscal year). You likely have all of this information readily on hand, so this section is typically a piece of cake to fill out.

The business income is precisely that—this section is where you are putting the income you’ve gotten from your small business. It’s important to remember that this is your gross income before you calculate your experiences. You will be putting your expenses in the next section.

The business expenses section is the place you list all of the expenses that you built up while running your business. Here, you can include things like office supplies, marketing, vehicle expenses, and meals (50%). If you have no experience filling out your small business’ taxes, this section can be tricky because you might not know which deductions you qualify for—that’s where we come in.

Common Mistakes or Assumptions

New small business owners often make mistakes or assumptions about their taxes. Here are some things to keep in mind:

First, it doesn’t matter how much money your business makes, you still need to file a tax return. Some people think that if their business doesn’t bring in any income, then they don’t have to do their taxes. This is most definitely not the case! After all, many businesses fail to show a profit for the first few years in operation. If that is your situation, then you can often deduct the loss to your other forms of income. So, don’t make this mistake!

Another belief is that if you make less than $5,000 a year, you don’t have to file your income taxes. Again, this is a misconception. You need to consider Canada Pension Plan contributions and other factors. It doesn’t matter how much money you make, you still need to file.

Finally, it doesn’t matter if you are a student or not—you need to file a tax return if you are self-employed or own a small business. This can be tricky as students are often overworked and have little time. Many rely on their parents to file their returns, but this can be a big mistake. It’s best to get involved with your taxes at a younger age, so you don’t feel overwhelmed when it falls to you to complete them in the future.

The reality is that nobody likes to do their taxes, either small business or personal. It’s stressful, takes up a ton of time, and one mistake can result in months of headaches. At The Number Works, we do whatever we can to help small business owners take care of their taxes so they can instead focus on the job of building their business. Contact us today to get some help doing your taxes. But do it soon, as filing deadlines are coming up fast!

Your Accountant is Here to Help: Just Ask!

Your Accountant is Here to Help: Just Ask!

How often do you speak to your accountant?

For some people, their accountant is this borderline-mysterious figure that appears once a year to help with their taxes. You rarely have face-to-face or even telephone contact with them. You simply send off your financial documents and, poof, taxes are done. They’re like a reclusive math wizard that you met on the internet!

As flattering as it is being considered a “wizard,” at The Number Works, we have a slightly different idea about what an accountant and bookkeeper should be to your business. We are a resource that can do much more for you than just your taxes—

although that’s super important.

With our help, you can launch a new business, reduce costs and expenses, set up your accounting software, and get a ton of busywork off your plate. All you need to do is ask!

Startup a Startup!

If you’re an entrepreneur who is looking to build a brand new business from the ground up, getting your financials in order can be one of the most daunting things on your to-do list.

You need much more than just a good idea to start a business. You need to identify your startup costs, plan your operating costs, figure out your business’ legal structure (sole proprietorship, LLC. etc.), and work out the fine details of your business plan.

One of the best things about bringing your accountant into the earliest stages of your business planning is that they’ll be there from the very beginning. As your business grows, your accountant will already know everything about the company. In times of financial difficulty, they’ll be able to help guide you with expert advice. Plus, in the event of an audit or other financial challenges, you can rest assured that your accountant will already have detailed records on hand from the very start.

Set Up Accounting Software

As accountants, we have a love-hate relationship with spreadsheets. It’s just part of the job! But if you’re keeping all of your finances in Microsoft Excel, then you need to get with the times.

Setting you up with online accounting software is another service that accountants can offer in the earliest days of entrepreneurship. It’s also a valuable service at any stage in the life of a business. With cloud-based accounting software, you and your accountant can access your finances from anywhere at any time. With professional features ranging from customized reporting and analysis to rock-solid security, setting your business up with a cloud-based system like QuickBooks Online, Xero, or Wave can be more than a worthwhile investment.

The trick is finding an accountant who can recommend the best platform for your business or one who is already familiar with the program you want to use. That way, they can rapidly import all of your current financial information into the system. All that work could take days if you’re doing it yourself. But if you hire a professional accountant to do it, everything will be ready in no time at all!

Reduce Costs and Expenses

Running a growing business is complicated. There are so many moving pieces that even the business’ owner might not be fully aware of how everything works.

An accountant can help you get a grip on the financial workings of your business, including your incoming cash flow, expenses, and costs. As a professional accountant, they can also identify places where you aren’t spending money optimally, offering you advice as to where you can trim the fat, so to speak.

Get Stuff Off Your Plate

One of the busiest livelihoods out there is that of a small business owner.

While demands can vary depending on the size and type of the company, a small business owner is typically overwhelmed by the amount of work on their plate. Everything, from marketing decisions to customer service to product development, needs to be run through them. It isn’t unusual to have upwards of two dozen non-negotiable items on your to-do list every single day.

That’s why asking your accountant to help with the daily financial headaches of your business can be a massive relief. Rather than having to pour over the numbers, you can instead focus your energies on the things that only you can do as the owner of the business. By outsourcing your financial planning and management to a professional accountant and bookkeeper, you can strike off dozens of those to-do list entries in one fell swoop.

Get the Help You Need

Accountants might be “math wizards,” but we aren’t mindreaders! There are so many other ways that we can help your business grow in addition to your yearly taxes. All you need to do is ask! At The Number Works, we want to do whatever we can to help your business grow. If you have any questions about your business’ finances or how an accountant can help, please feel free to contact us today! Sometimes, all it takes is one question to change everything about your business’ future!