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ACCOUNTANT North York
We personally handpicked the best Accountants in North York based on our 100 point inspection process which includes everything from checking reviews, ratings, reputation, history, complaints, satisfaction, trust and cost to the general excellence. We make finding the best Bankruptcy Lawyer in North York easy as 1-2-3.
TOP 5 ACCOUNTANT IN NORTH YORK
Services Provided By ACCOUNTING FIRMS In North York:
Corporate Accounting, Notice to Reader Financial Statements, Corporate T2 Tax Returns ,Tax Planning,Personal Tax Returns, Business Statement, Rental Statement,Trust Returns, Disability Tax Credit applications, Family Tax Planning ,Income Tax Review/TAX Audit, GST/HST Review/ CRA Audit/ TAXATION FORM Preparation/Filing Notice of Objection FOR TAX,Incorporations and/or any corporate filings,Business Name Registration,Review of Employment Standards,Electronic Document Conversion, Bookkeeping,Payroll ,Government TAX Remittance, Tax Appeals
ITA Tax Accounting Professional Inc
Faris CPA | Toronto Tax Accountant0
Joyko Tax and Accounting 0
LOCAL & CERTIFIED BUSINESSES
One of our main principles in order to list a business in our top 5 list is to make sure that the owner of the business truly cares about the customers and their experience with the service provided.
There are many business directories in the world but just a few of them make sure you get the best you deserve.
regardless of your location and the service you are looking for, we are here to help you find the reliable service provider whether it is a mechanic shop, lawyer , florist or a beauty salon.
we make sure you find the best fit , first time every time.
We are serious about customer service and your experience this is why we care about the businesses that we list in our business directory, ,you can trust TOP5BIZ Business Directory to guide you in the right direction to find a trusted and affordable service provider.
ACCOUNTING TIPS AND ADVISE NORTH YORK
Bookkeeping done well will allow you to view useful financial reports for your business. It can help you to answer the questions:
Is your business profitable?
Where does the cash go each month?
Which products or services should you focus on?
Is your business growing, staying the same size, or shrinking?
Should you keep doing what you‘re doing or make some changes?
Bookkeeping allows you to see the information to guide your business decisions. Don’t run your business blindfolded.
If your bookkeeping is up-to-date, you will gain some operational benefits. Up-to-date bookkeeping helps you understand:
Who owes you money?
Who do you owe money to?
How much sales tax and income tax will you owe?
How much cash does the business have access to?
How much cash will the business need over the next month, quarter, and year?
This will help you to you avoid penalties and interest on late payments. This especially is important when it‘s the CRA that you owe money to.
It also will help you take advantage of upcoming opportunities. Managing your cash flow will allow you to take early payment discounts or stock up when your supplier has a sale.
Yes, compliance is also important for your business. Keep the CRA happy by filing and paying taxes on-time.
Good bookkeeping will also help you to avoid costly and time-consuming audits. It‘s far more cost effective and less stressful to get the bookkeeping right the first time around.
Here are a few other reasons why bookkeeping is important:
Claim every deduction – Proper bookkeeping will make sure that every transaction is recorded accurately. Legitimately claim all tax deductions and back them up with proper supporting documents.
Catch and correct errors – Keeping the books up-to-date will allow you to catch errors quickly. Bank errors will pop out when doing monthly reconciliations. Customers short-paying invoices will also be caught quickly so you can collect every dollar.
Obtain business financing – If you need financing for your business, well-kept books will help obtain a business loan. You‘ll be able to accurately show your business‘ performance and create a forecast to show the bank that the loan will be repaid.
Now that we‘ve identified why bookkeeping is important, let‘s learn how to make bookkeeping easier and to do it well.
Separate Business Transactions from Personal
If you take one piece of advice from this article, let it be this one: get a separate business bank account and credit card.
Keeping your business transactions separate from your personal ones is the first step to making bookkeeping easier. If your business transactions are lumped in with your personal ones, you‘ll spend hours sorting through them when doing your books.
If business and personal are not separated, the time it takes a bookkeeper or accountant to do your books will sky-rocket. This means you‘ll get a much larger bill at the end of it.
HOW TO SEPARATE YOUR ACCOUNTS
It doesn’t have to be complicated. You can simply open a separate bank account within your current bank or credit union and use it strictly for business.
For your credit card, either say yes to one of the many new credit card offers you receive monthly, or just assign one of your existing cards to the business. For example, Joe at Avalon has a black credit card and a silver credit card. Black is business, silver is personal.
Treat your business finances as a separate entity from your personal finances. Not only will this help make bookkeeping easier, it will help keep you out of trouble with the CRA. They don’t like it when personal items get mixed up in your business.
Which Bookkeeping System Should You Use?
When deciding what system to use for bookkeeping and accounting, it‘s good to start with the end in mind. Here is a list of things to think about and questions you might ask yourself:
Just the Basics – Are you only trying to stay compliant (i.e. just file all of your taxes on time)?
Reporting – Do you want to review reports and compare them each month?
Invoicing – Do you plan to use the system to do invoicing?
Other Functionality – Do you have specific applications you would like to connect to your system (inventory, e-commerce, etc)?
Growth – Do you need a system that can scale up along with your business?
Cost – What is your budget for your system? Do you mind spending a bit of cash up front for a system that lasts longer?
We generally see startups and small business owners fall into one of three categories:
Simple Compliance – Want the simplest and cheapest solution to stay compliant. Keep it easy and keep it cheap (or free).
A Few Bells and Whistles – Want a little more functionality, such as invoicing and reports, but don’t need many bells and whistles.
Long-term Solution – Want a system that has robust reporting and app connectivity; a system that will grow with your business.
Regardless of which group you find yourself in, there are good options available. Read on for our recommendations based on each category.
SIMPLE COMPLIANCE: GOOGLE SHEET
If you are only looking to stay compliant (i.e. keep things organized for tax purposes), our free Google Sheet template is likely all you need.
Just export the transactions from your online banking to an Excel file and paste them in the Google sheet. Then categorize them via the drop-down menu and you are pretty much done. See below for more info on how to categorize transactions.
Simple to use
The video instructions below will help you use it
Minimal reporting options
No invoicing available
Check out the video and instruction list below to learn how to use our bookkeeping template.
A FEW BELLS AND WHISTLES: WAVE
For a little more automation, reporting and invoicing capability at a still-free cost, you could sign up for Wave.
You can link up your bank feeds so that transactions are automatically imported. Then simply choose the category to record them in.
We recommend going through their training to get started as it can get unwieldy if not set up well. Automation is great, but it can also create a mess if not used properly.
You will get some more reporting options (comparing revenue, expenses, etc.) and you can send nice-looking invoices and collect payment through their app as well. It can also track things like GST, which is a nice part of any system.
It‘s a cloud-based bookkeeping system so you can access it from anywhere there is internet.
Basic bookkeeping, invoicing and reporting is free.
Financial reporting to help you understand how your business is doing.
Invoicing is integrated so you can send invoices and mark them as paid.
Payment of your invoices can be accepted within Wave (for a fee).
More initial time-commitment for training and setup.
It can get ugly if not set up and managed properly (I mean ugly, we have done some big clean up jobs).
Although the basic system is free, there are costs related with the payroll module as well as with accepting payments (pricing).
Software integrations and reporting options are limited compared to other systems.
LONG-TERM SOLUTION: XERO
If you are looking to upgrade and get a longer-term solution for a growing business, Xero is a great option. This is our go-to solution for businesses that have any plans for growth.
You get all of the benefits of Wave, plus it‘s a more stable platform and allows for more reporting options and links to other apps. The automation is also better, making bookkeeping faster and easier.
It does need to be set up properly to be useful, which we always suggest is done by someone who knows what they are doing. We also recommend going through their training modules; they have a robust section with videos and how-to articles.
The reporting is easy to use and allows for more customization than Wave.
More automation allows for more efficient and accurate bookkeeping.
Able to scale along with growing businesses.
Xero is a very stable platform from an organization that aims to be the best in class.
Their support is very responsive and there are robust training resources.
There is a dedicated group of accountants that offer support for Xero based businesses.
There is a monthly subscription fee (pricing). We do have coupon codes, though. Reach out if you‘re interested in signing up.
It is still easy to make a mess if not set up well or if you‘re not familiar with how the software works.
WHICH SHOULD YOU CHOOSE?
In the end, it pays to spend some time understanding what you hope to get from any bookkeeping system.
It‘s also helpful to be honest with yourself. A business needs to have a bookkeeping system so be sure you are able to use it, or that you are willing to learn how to use it. There is no judgment here – we all have our strengths and being honest with yourself can save your business.
Ask yourself the questions above to help determine which system is right for you. If you still aren’t sure, send us a message and we‘ll help point you in the right direction.
How to Categorize Transactions
Another common question we get is “how should I record _____?“. More often than not, the answer is to put it in a category that makes sense to you.
Generally, you want to glance at your financial statements and understand where your money is coming from and where it is going. There are also specific tax deduction rules, but we‘ll talk about those in the next section.
KEEP IT SIMPLE
We also like to tell people to keep it simple. We often see that people use 50-60 expense accounts which can make financial statements pretty difficult to read.
A common example is vehicle expenses that look like this:
Vehicle – Fuel
Vehicle – Insurance
Vehicle – Parking
Vehicle – Repairs
Vehicle – Registration
If it truly is helpful for you to understand vehicle costs in this much detail, then do it. Otherwise, just stick with one vehicle expense account. This applies to insurance, office expenses, people costs, advertising, etc
. If you‘re creating a new account to record a transaction, make sure you know why you want to break it out separately.
TRANSACTION CATEGORIES EXPLAINED
We start with a basic chart of accounts for new businesses and then add accounts as needed. For a copy of our basic chart of accounts template that you can import into Xero, click this link. Download the CSV file and import the chart of accounts in Xero.
For this tutorial we‘re going to stick with the most common categories that you‘ll use when completing your bookkeeping.
Sales – Revenue that you earn from selling products or services. If it‘s helpful to track different categories of sales, create multiple accounts (sales – services, sales – products, etc.).
Cost of Sales – Direct costs involved in making sales. This could include costs of products sold, costs of shipping products or costs incurred directly while providing services (eg. contract labour costs of a construction company).
Advertising – Costs incurred to promote your business. This could include various types of costs: print ads, online ads, marketing consultants, trade shows, etc
. Bank Charges and Interest – Bank fees and interest incurred on borrowed funds. Sometimes it‘s helpful to break out interest on bank loans as a separate category to better understand how much debt is costing your business.
Insurance – Insurance purchased to run your business. This could include general liability, professional liability, errors and omissions, property insurance etc. You could include vehicle insurance in here as well, but we like to lump that in with vehicle costs.
Licenses and Dues – Fees that the business pays related to licensing or professional dues go here. For example, Avalon Accounting pays licensing fees to CPABC; we would include those in here.
Meals and Entertainment – Meals and entertainment costs related to your business activities. For example, taking clients out for drinks or treating your staff to lunch. This category should be separate from others as it is treated differently for tax purposes (see the next section on tax deductions).
Office Expenses – Small supplies and office related expenses. Some examples include pens and paper, printer ink, and stamps. These items are generally consumable in nature and don’t last longer than one year.
Professional Fees – Include costs paid relating to professional services. Some common examples include fees paid to your accountant or lawyer.
Rent – Costs incurred to rent an office space, storage or other facility used by your business. If your business rents equipment, you could also include it here or break it out as a separate line item.
Subcontractors – If your business hires subcontract labour, include these costs here. See our article on whether your workers are contractors or employees for more info.
Software Subscriptions – Include monthly software subscription costs here. Monthly web hosting, email accounts, accounting software, CRM costs, etc
. Telephone and Utilities – Include utility costs incurred to run your business. Some examples include: phone plans, internet services, electricity, heat and natural gas.
Travel – Travel and accommodation costs go here. Flights, hotels, car rentals, parking, taxis and ride sharing are all examples of travel expenses.
Vehicle Expenses – Operating costs for vehicles used in the business. Some examples include fuel, licensing costs, vehicle insurance, and repairs.
Wages and Benefits – Costs related to paying employees go here. Unless you want to see them broken out separately, include: salaries, wages, CPP expense, EI expense, worksafe and employee benefits.
Inventory – Any items that you purchase or manufacture for resale. A fitness centre that sells whey protein would include purchases of protein powder as inventory.
Furniture and Equipment – Office equipment and furniture that will last longer than one year should go into this asset category. You‘ll learn about the difference between assets and expenses in the next section.
Computer Equipment – Computers, monitors, computer peripherals that last longer than one year go into this asset account.
Suspense – Don’t use a suspense account. We often see this account and bookkeepers just end up throwing things in suspense that they aren’t sure how to categorize. Don’t use suspense. Pick one of the other categories and move on.
Categorizing transactions doesn’t need to be complicated. I know I‘m repeating myself, but the idea is to record transactions so that your financial statements make sense to you.
Save time and make your financials relevant by keeping it simple.
What Expenses Can You Deduct?
Now that we‘ve looked at how to categorize transactions, we‘ll add another layer by explaining what expenses are deductible for tax purposes.
This could be a ten page article in itself, but we‘ll keep it to the basics which should be enough for 95% of the expenses you‘ll come across. For more detail, the CRA has a good resource which you can find here. It‘s actually pretty user-friendly!
According to the Canadian Income Tax Act: in general, you can deduct any reasonable current expense incurred to earn business income.
OK, so we need to know what a current expense is and how to determine if it was incurred to earn business income.
As with most accounting and tax issues, there are exceptions so we‘ll also look at some of those.
CURRENT VS. CAPITAL EXPENDITURE
The idea here is that current expenses are generally deductible in the current year (right away) whereas capital expenses are deducted over the useful life of the purchase (over a few years).
Some criteria to differentiate between current and capital expenses are:
Lasting benefit – Capital expenses provide a benefit lasting longer than one year. Current expenses reoccur after a short period of time.
Maintenance vs. improvement – Capital expenses improve property from its original state, whereas current expenses restore property only up to its original condition.
New assets vs. repair of already owned assets – Capital expenses are generally new property or equipment whereas current expenses generally repair part of an existing piece of equipment or property.
Here are some examples to help you apply the criteria:
Purchasing a computer is a new asset and has a lasting benefit so could be considered a capital expenditure.
Replacing wooden stairs with concrete stairs would likely increase the life of the stairs so could be considered a capital expense.
Purchase of a new telephone is also a capital expenditure as it has a lasting benefit and is a new piece of equipment.
Repairing an old computer to allow it to function again would be a current expense as it‘s maintenance and not an improvement.
Replacing wooden stairs with wooden stairs would bring the stairs back to original condition so could be considered current.
Paying your monthly bill for phone usage would be a current expense as it reoccurs after a short period of time.
INCURRED TO EARN BUSINESS INCOME
The next issue to consider is whether the expense is reasonable and is incurred for the purpose of earning business income.
Reasonable – For example, it would usually be reasonable for a software developer to claim internet costs, but it might not be reasonable for a contract construction worker to do the same. The issue is whether the expense is actually used in the business to earn income or grow the business.
Incurred for Business – There also may be expenses that can be attributed to the business, but for which there could be a personal component. The personal component isn’t eligible to deduct.
For example, if you use the same cell phone for both business and personal reasons, then it is reasonable to claim only the costs that relate to business use.
You may have to estimate this, keeping in mind whether the estimated business use is reasonable or not.
Using the same thought process, personal expenses that can not be linked to earning business income (personal travel, meals, clothing etc.) wouldn’t be eligible business expenses.
EXCEPTIONS AND SPECIFIC RULES
We often see questions about these specific rules and exceptions.
Meals and Entertainment – When meals and entertainment expenses are incurred for business purposes, they are still only 50% deductible for tax purposes. It is important to keep track of the business reason for the M&E expense and who it was with.
If you pay for a meal because you‘ve forgotten your lunch for the day, it most likely isn’t deductible.
Vehicle Related Expenses – You can deduct expenses you incur to run a motor vehicle that you use to earn business income. Again, personal related use is not eligible, so costs may need to be prorated based on personal vs. business use.
Personal use includes travel to and from your regular place of work.
Home Office Expenses – You can deduct home office expenses as long as the space is either your principal place of business, or you use it only to earn business income and regularly meet clients, customers or patients there.
You can deduct a portion of your utilities costs, maintenance costs, property taxes, and mortgage interest.
To calculate the part you can deduct, use a reasonable basis such as the area of the work space divided by the total area of your home.
Gym and Golf Memberships – In most cases, you can not deduct club membership dues if the main purpose of the club is dining, recreation, or sporting activities.