Tax Tips For BC Yoga Studios

It’s safe to assume that Vancouverites LOVE their Yoga. There is no shortage of studios in this city and a most of the time they are filled to the brim with people gaining strength and learning to control their breath. Even though we have a large community of Yoga lovers in the city you can’t ignore the fact that competition is fierce and if you want to remain in the game you have to stay innovative and manage your business well.

Here are our top tips for staying zen and remaining profitable

Outsource Your Payroll  

I know that it seems like we are trying to trick you because we are a bookkeeping company but we can confidently say even if we were in the jump rope industry this would be our advice.

Many studios make the mistake of getting the reception team to take care of duties such as payroll and bookkeeping. Your reception teams number one focus should be providing exceptional customer service so that your customers have a great experience.

Constant distractions and inexperience can lead to costly mistakes by creating the ideal environment for data entry errors. By outsourcing your payroll to a reputable provider you can ensure that you are deducting the correct amounts from your employees AND remitting the correct amounts to the government.

Reputable providers take responsibility for any errors and therefore are much more thorough with their entries. They also know the tax laws inside and out, protecting you from unnecessary penalties.


Ensure Your Sales Are Recorded Correctly

This may seem like an obvious simple step but you would be surprised how often businesses set up their sales software and tax amounts incorrectly. Ensure that all your sales (from all sources) are recorded in Mindbody (or whatever software you are using) correctly. Have a professional double check your set up to ensure that you are charging the correct taxes and that the money that goes into your bank is properly recorded as income.

The last thing you want to do is discover after several months of taking payments that you aren’t charging your clients correctly or recording your payments effectively. This can lead to significant losses, especially if you end up having to pay additional taxes from your own pocket.

Pay Your Taxes On Time

One of the easiest ways to avoid unnecessary expenses is to pay your bills on time, taxes included. Ensure that all your PST/GST returns and payroll taxes are filed and paid on time to avoid late filing penalties. If you find deadlines difficult to manage in-house then hire a professional bookkeeper to manage this element of your business. The CRA won’t tell you if you’re early or have overpaid but they will be quick to seriously penalize you for being late.

Save Your Pennies

Businesses tend to ebb and flow. Make sure you have a clear understanding of your fixed costs and create and maintain a monthly cash flow budget so that you can avoid stress during slower periods.

In addition to offering your services create passive income when possible, rent out your space to other professionals and community groups during your down times to maintain your income.

During our time offering bookkeeping services to Yoga studios around Vancouver, we have seen all the common mistakes that Yoga studios make and the great ideas that work. If you have a yoga business and need help with your bookkeeping don’t hesitate to contact us today.

5 Accounting Mistakes Tradespeople Often Make

Being a tradesperson isn’t easy. The job comes with early mornings and long days spent managing clients, contractors, companies, and suppliers. The last thing you want to do when you come home is think about managing your accounting on top of everything else.

That is why it’s very common for tradespeople to make these 5 avoidable mistakes when managing their books.

1) Fall Into A GST Trap

When registering for GST many tradespeople choose to pay their GST annually. This is a mistake and can really hurt your cash flow in the following year. Rather than wait for your bookkeeping to give you a massive bill that takes an eternity to pay off switch your payments to quarterly.


2) Incorrectly Charging PST

PST isn’t a ‘you’re annoying tax’ that you get to charge your clients when you feel. If you don’t have a valid PST number AND a signed contract stating your client will be paying for the PST you cannot charge PST at all to your clients.

Additionally, according to the BC Government, you can only charge PST in the following circumstances:

  • You sell them goods but you don’t install the goods
  • You sell them goods and install the goods, but the goods don’t become part of a building or land
  • Your customer agrees in writing that you can transfer the tax liability to them. Learn more about this special agreement in Real Property Contractors (PDF).

As a general rule contractors and tradespeople don’t generally charge clients PST. Instead, you pay the PST when you purchase the materials and you factor that cost into the contract.

If you have incorrectly registered for PST you can close your account by sending a Request to Close a Provincial Sales Tax Account form (PDF) to the CRA.

3) Throwing Away Receipts

Throwing away your receipts is like throwing away money! You won’t be able to properly claim your expenses which can increase your tax bill. Additionally, if you get audited by the CRA and you don’t have your receipts you could find yourself in a lot of trouble.

Keep a file folder in your truck/van and put all of your receipts inside as soon as you get them. This will help you a) keep your bookkeeper happy b) ensure you charge your clients for all the materials your purchase c) help you come tax time.

4) Not Collecting Deposits

While it would be great to trust everyone and have them maintain that trust by paying their invoice in full and on time, this doesn’t always happen. Having a client fail to pay a large bill can destroy a small business.   

That is why we always recommend that you have a proper invoicing system in place, collect a deposit upfront from their clients and invoice your clients regularly and not just at the end of the contract. You can apply incremental amounts of the deposit to each invoice up until the final bill to ensure you don’t get screwed. By invoicing each job in portions as you go you can ensure you get paid before continuing with the next phase of work.


5) Leaving Your Books To The Last Minute!

Now I know that we are a bookkeeping company so this final note may seem a little biased, but SERIOUSLY DON”T WAIT UNTIL THE END OF THE YEAR…OR LATER! A good bookkeeper is going to be extremely busy at this time of year so there may be a wait to be onboarded or the work may cost extra due to rush fees.

We know that if you are reading this post then you are good at building houses, but not good at paperwork and keeping the CRA happy. The sooner you admit this to yourself the better. Hiring a bookkeeper is money well spent. Not only will you be able to sleep at night knowing that the backend of your business is well taken care of you can also know that when the CRA comes knocking because you are the ‘chosen one’ for a random audit you have nothing to worry about.

Contact us today for an obligation free consultation.

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How Construction Trades can keep the CRA happy

As a tradesperson, you may think the taxation department is out to get you and to be honest you might be right. Construction is a red flag industry due to the number of small suppliers and short-term workers who do cash jobs. So we can’t stress enough how important it is to declare your income honestly if you want to avoid penalties!

Here are our 4 top Tips on how to ensure you keep the CRA Happy

Create Accurate Invoices

If you want to be able to sleep at night knowing that you have nothing to hide then you need to ensure you are creating accurate invoices for all of your jobs. This way if the CRA comes knocking at your door you have everything you need to prove you aren’t hiding income.

Use a software like Quickbooks Online to create your invoices. This will help you ensure all invoices are accurate and stored in the one place. It will also save you a lot of time and money when bookkeeping.

Sub Vs Employee? Know the Difference

The most costly mistake a lot of construction business make is to pay people who should be categorized as an employee as a sub. A quick test to ensure your sub should not be paid as an employee is to ask yourself these two questions.

Does your sub have their own GST and WCB numbers?

Do they own their own tools and take on other jobs besides yours?

If the answer to both is YES then you can pay them as a sub. If they answer NO then you MUST pay them as an employee.

The government doesn’t like missing out on employment taxes so the penalty for incorrect categorization includes back paying payroll taxes INCLUDING the employee’s portion as well as paying penalties and interest.

Charge GST

GST stands for Goods and Services Tax, not Great Sunny Times. It’s not an optional fun tax…It’s MANDATORY. GST needs to be charged on EVERYTHING you invoice. Yes, you need to charge GST on your materials. At the end of the year, your total GST collected needs to be 5% of your total sales. If it isn’t, the CRA will want to know why and you will be liable for the GST that you should have charged.

Get Help

Managing your bookkeeping on top of managing your business is challenging. Most contractors and construction companies we work with come into the office with plastic bags filled with receipts and invoices so we know how easily this part of the business can fall through the cracks. Knowing your numbers and ensuring you are compliant is an extremely important part of your business and shouldn’t be ignored.  Hire a professional bookkeeper who can keep you on track and make sure you are compliant with all your filings.

If you need help with your bookkeeping contact us today for an obligation free quotation.

5 Ways Retail Stores Can Become More Profitable.

Having a retail store is not easy especially in Vancouver. With increased property taxes hurting small businesses combined with the increase in online shopping, retailers need to stay savvy to survive the challenges they face.

Most people shy away from knowing their numbers but given that we are bookkeepers (aka number nerds) we get a first-hand picture of the numbers and they clearly show what works and what doesn’t work.

Here are our top 5 tips for making your retail store more profitable.

1. Invest In A FANTASTIC POS Machine

We aren’t just saying this because we love numbers. Investing in a great system such as Lightspeed  will allow you to monitor and understand your cost of goods sold (COGS) so you can discover what’s selling and what isn’t selling,

Additionally, you want to pick a good software that links directly to Quickbooks so you can save yourself a time and money when organizing your bookkeeping.

2. Become Focused With Your Advertising

Not everything in your store is going to be popular and sell. By having a strong POS system you can determine what your customers want and what they don’t want. Dedicate more shelf space to your top selling items and discontinue slow-moving inventory. Don’t be afraid to raise the price on your popular items, just make sure you stay competitive while doing so.

This is going to lead to my next point.

3. Limit discounts!

Discounts take from your profits so be smart about what you discount. Social media is filled with people promoting discounts and giveaways. Sometimes they make sense but you need to be strategic about your promotions. Over-promoting discounts and discounting items too regularly can teach people to wait until you have a sale to come in and purchase.

Put a promotions schedule in place and stick to it. Use it to move items that aren’t selling and show customer appreciation for your popular items. Bundling items can also be a good method to provide value without robbing yourself. But unless you are a major retailer or a have money to burn resist storewide sales and not having a strong promotions plan in place.

4. Know Your Numbers

“But mooommmmmmm I hate math” Too bad dear it’s for your own good!!! You NEED to know and understand your fixed vs variable costs so that you can make sure your profit margins are correct and enough to cover the cost of operating your business. Additionally, knowing this numbers will allow you to create a monthly cash flow budget to ensure that you have enough $$ to purchase inventory. It will also allow you to make savvy decisions when it comes to your vendors such as asking for bulk discounts and reducing the number of vendors you have.

If this all seems a bit much then hire a bookkeeper. If you are trying to cut costs then wash your own windows. Don’t skimp out on good bookkeeping and accounting. It could mean the difference between success and failure.  


5. Be Smart With Your Employees

Who you hire could make or break you. If you don’t have great staff customers won’t come back. Spend the time finding the right people and then invest in educating them on how to SELL if they don’t already come with the knowledge.

Also, remember that at the end of the day you are the boss and if you don’t run a tight ship everyone is out of a job. So only schedule employees when you need them. Create a schedule that works for you and your store with the top sellers getting the most hours.

Know your store’s conversion rate (how many customers enter the store compared to how many that buy things) then determine how you can improve the numbers. If you determine it’s a staff-related issue then address it immediately.

Running a retail business is never easy. Gone are the days when a storefront was enough and rent was low. Juggling online business as well as your store is challenging but if done well can also be very rewarding and set you up for a bright future.

If you need help understanding your numbers contact us today!