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3 Ways To Survive A Minimum Wage Increases

The current minimum wage in BC as of June 1st, 2018 is $12.65 and that number is expected to rise steadily in the coming years. As small business owners in one of Canada’s most expensive cities, it should be no surprise that minimum wages are increasing. Many small business owners are already paying well above minimum wage to align with the cities livable wage of $20.91/hour and retain good talent.

Minimum wage increases are often met with mixed reviews from business owners. While some feel it will fuel the economy as employees will have more money to spend and create happier workplaces, others feel it will have a crippling impact on small business owners and their bottom line.

No matter what your point of view is on minimum wage increases the fact of the matter is – they are coming whether you like them or not. Here are 3 ways that you can make sure you are prepared for the increase.

 

 

1. Streamline Your Business

Inefficiencies, products and services with low-profit margins, and outdated systems tend to stick around longer than they should when a business is thriving. When a minimum wage increase hits and payroll taxes and accounting fees go up the reactionary approach for a lot of business owners is to start thinking about employee cuts because at face value higher wages appear to be the problem.

Rather than hastily cutting staff or treating your employees differently now that they cost more we recommend turning your focus on your business and getting real with yourself. Ask yourself when was the last time you shopped around to ensure your insurance policy, bank account fees etc. were the best price? What parts of your business could be automated with the right technology? Which product or service lines have small margins and should be cut? What systems can be upgraded?

Doing a thorough audit of your business, reviewing your profit margins and investing in better systems can save you thousands long term. Helping you stay on budget when minimum wage increases are announced.

2. Reduce Your Hours

It’s not always ideal but it is better than laying off good staff. If you have a storefront or provide services a lot of overhead can be reduced if you are smart about your operating hours and your scheduling. If your sales are low on a Tuesday and only barely cover your operating costs then maybe there is no need to be open that day. Or if you notice that most of the work is completed from 9am – 3pm and from 3pm – 5pm nothing gets done, reduce your teams daily hours to 9am – 3pm until you can ramp back up.

While reduced hours isn’t ideal for your existing staff it’s much better than no hours.

3. Increase Prices

While this isn’t always ideal it’s a very viable option to manage a minimum wage increase. With inflation prices can’t be expected to stay the same forever and when minimum wages increase it’s common for the cost of goods to increase with them. Talk to your bookkeeper to determine what the deficit is with the wage increase then look at how you can recoup that with incremental price increases across your products or services. So long as you continue to ensure your level of service remains high most customers will stay loyal.

A lot of small business owners in Vancouver are already paying above minimum wage to ensure they can retain talent so when wage increases are implemented the impact is minimal. If you happen to find yourself in a tight situation when the next increase is announced talk to your bookkeeper or accountant and look for ways to trim the fat from your business that are win/win for both you and your employees.

What Can Vancouver Retailer Do About Rising Land Taxes?

If you are a Vancouver based business with a retail location then you are no stranger to the unpredictable and seemingly unfair taxation system that is forcing many businesses, some iconic staples in our community, to close down. With land taxes in some areas doubling annually to reflect soaring residential property valuations the mom and pop shops that are loved across the city risk being phased out and replaced by chains.

Unlike residential properties, commercial properties in Vancouver are taxed at a rate that is 5 times higher, are assessed based on the potential use of the property and not the actual use/business revenue of the property and the taxes are not paid by the property owner and instead, are passed onto the tenant. This puts a huge burden on small business owners and can limit growth opportunities and cost people jobs.

So the golden question is – what can be done?

While there isn’t a huge amount that can be done from a tax and bookkeeping perspective, here are some avenues that small business owners can take to voice their concerns about this growing issue.

 

Contact Your Local Councillor

Small businesses account for roughly 95 percent of Vancouver’s enterprises. With such a significant amount of revenue, jobs, and services at stake city council members are starting to take the issue of land tax seriously.

Here is the list of Vancouver’s city councilors and their contact details. George Affleck has been calling for a review of the cities current policies in an attempt to protect small businesses.

Appeal Your Bill

According to Chris Jobe, manager of the property tax division at the real-estate consulting firm Turner Drake & Partners Ltd. in Halifax, small business owners can appeal their tax bill if they can prove that the property has been overvalued during the assessment.

While the City of Vancouver website states that successful appeals are rare if you want to try your luck you can find more information here!

Band Together

As we mentioned earlier small business owners make up roughly 95 percent of enterprises in Vancouver and there is strength in numbers. Trying to change the current situation is not going to be easy but by coming together and drawing attention to the issues small business owners are facing is one option that will give our retailers a fighting chance. Join your local business association and work to make this issue a focus. Educate your community and talk to the press.

If the city doesn’t do something about this growing crisis more and more small business are going to close, sell or move. This will dramatically impact the level of choice available to residents and the overall appeal of our city.

Let’s hope that the increased attention on this issue can help create some change.

Save money on your bookkeeping, Wonder Woman-style!

Wonder Woman Super Hero Vancouver

When you are juggling a small business or startup…. every penny counts.

Here are our top four tips for saving money on you  bookkeeping:

 

1. Organize your receipts

Keeping your receipts well organized can sometimes be difficult when you are busy running your business. As bookkeepers we are never surprised when a new client brings in bags or boxes of mangled receipts. However, if you are looking to make your bookkeeping as cost effective as possible then the easiest way to save money is to make sure your receipts are well organized so that the bookkeeper does not have to sort them for you.

In addition to sorting them, make sure they aren’t scrunched up into little balls. You may laugh but a lot of people do this and it takes a lot of time to un-scrunch them. Additionally scrunching them up can cause the ink to wear off which means that you are paying us to un-scrunch receipts that turn out to be blank pieces of paper.

Also if you want to claim the GST you paid on a meal as well as the tip (in addition to cutting down the amount of time we spend entering your data) make sure you staple together the original itemized restaurant bill to your credit/debit slip.

Sole Proprietors:

A common mistake a lot of first-timers make is arranging their receipts by month instead of by category.

The fastest way for your bookkeeper to enter your bills into Quickbooks is if they are sorted by category. If you want to go one step further and really limit the amount of time a bookkeeper spends on your file, organize your receipts by category AND company eg. Under transport put all your Translink receipts together.

Corporations:

If you are incorporated then you need to organize your receipts by payment method (eg. Visa account, cash, business savings account) rather than by category so that it makes it faster for your bookkeeper to enter your bills and reconcile your accounts.

2. Keep your receipts/documents in one place

Create a filing system for your receipts/ documents and utilize that system so that you can ensure all paperwork is easily accessible.

Keeping your receipts all over the place can result in two issues.

  1. You will lose some receipts. This means your reporting will be inaccurate and you may miss out on including significant write-offs in your tax return.
  2. You will need to keep contacting your bookkeeper to let them know about additional receipts you have found or to ask them to hunt down important documents for you. This means that you will utilize more of their time and your fees will increase.

3. Save your online receipts to a flash drive, or upload them to LedgerDocs

These days a lot of businesses send email receipts. Although you have the option to forward all of your email receipts to your bookkeeper we recommend that you download your invoices and save them onto a flash drive that you can submit with your paperwork. This saves your bookkeeper time as they do not have to sort through all of your emails, in turn saving you money.

It also means that if your email crashes you have all of your important documents saved elsewhere.

If you’re using LedgerDocs, snap pictures of your receipts and forward them to your unique email address in real time. We’ll take care of the rest! Contact us here if you are interested in signing up!

4. Don’t keep receipts you can’t claim

Know what you can and cannot claim and know your categories. For example: in most cases YOU CANNOT CLAIM CLOTHES as an expense unless they are branded with the company logo or required safety wear.

Additionally, you cannot claim haircuts, facials or any other kind of personal maintenance even if you are a TV personality or the face of your company.

Placing receipts into your file that you can’t claim just means that your bookkeeper spends extra time sorting through receipts, remember time is money.

 

Regardless of what state your bookkeeping is in we are happy to help you. That said, we always recommend that you consider these points because it not only helps you save money it keeps your bookkeeper happy and guarantees that you will be added to their secret list of favorite clients.

If you need help getting organized contact us today.

Incorporation Series: Should I Incorporate?

Vancouver Bookkeeper(s), Tax Return Service Vancouver, Small Business Bookkeepers in Vancouver, Small Business, Grumpy Cat, Quickbbooks, Incorporation, Small Business Incorporation

To incorporate or not to incorporate?

The answer is not so clear-cut. And the looming questions can buzz around your head like fruit flies at a gravesite of a discarded lollipop. It’s enough to turn even the jolliest person into Grumpy Cat.

There are several factors to consider, so before you turn into a furry creature cursed to look like the angry emoticon (>_<) for all eternity , let us provide you with the tools you need to weigh up the pro’s and con’s of incorporating. Let us answer that lurking question experienced by most successful business owners ‘should I incorporate?’ and help easify your life!

Positives of incorporating

Limiting Liability

When you are a trading as a sole-proprietor your personal assets can be seized to pay your business debts which is a scary thought that can place unwanted stress on you and your family.

If you incorporate your business it becomes it’s own separate entity in terms of liability and financial responsibility.

This means two very important things. Firstly, it means that although your business is still liable for any debts it incurs, as a shareholder you are not personally liable unless you have given a personal guarantee.

Secondly, it means that the business essentially has an unlimited lifespan. Unlike a sole proprietorship which begins and ends with the owner, corporations can continue to exist regardless of ownership changes.

Tax savings

Additionally businesses that trade as a corporation are taxed at a lower rate of only 13.5% which is a great incentive for sole proprietors that are earning between $60,000-$100,000 on their personal tax returns.

Negatives of incorporating

Although incorporating your business may seem very appealing thanks to the promise of lower tax rates and limited liability there are some downsides that need to be considered, which are::

More government reporting

Don’t think for a minute that you will get lower tax rates without having to pay the price with government paperwork.

Increased accounting costs and responsibilities

If you were concerned about the cost of managing your books and taxes as a sole proprietor chances are high that you will find the increase in cost quite shocking once you incorporate.

More tax returns.

Once you incorporate you will have to file a corporate tax return AS WELL AS a personal tax return

The cost of incorporating

If you have weighed up the positives and the negatives and decided that incorporating your business is the way forward then you will need to budget in the following costs.

Setting up the corporation

This will cost roughly $1000 through a lawyer, which is recommended if there are multiple shareholders or assets to transfer. Alternatively you can incorporate on your own through the BC Corporate Registry for $350 using their online facility.

Maintaining the books

Annual Accounting costs ranging from $2,000 for a simple corporation that experiences minimal activity to $5,000 for an average small incorporated business.

Although this may seem high you really shouldn’t underestimate the value of a good accounting team. This is one area of your business you need to make sure is solid.

We hope that this overview has given you a stronger understanding of why businesses incorporate. In the end we recommend seeking professional advice before taking the plunge and incorporating your business. It is in your best interest to make sure that you incorporate at the best time and set everything up correctly so that you avoid paying penalties or experiencing issues in the future.

Stay tuned

In our next post we will be discussing what happens after you incorporate your business and the steps you need to follow.

If you are considering becoming incorporated and would like to discuss your options face-to-face with Teya our business consultant and tax expert you can make an appointment by calling us directly on  604 739 9536  or by requesting an appointment through our contact us page.

You get a raise! BC’s minimum wage jumps to $11.25 by 2017

Raise Vancouver
While the petition to raise the minimum wage in British Columbia to $15 still seems to be an active fight for change, BC’s minimum wage is climbing out of the chart dumps. Dubbed, ‘Lowest in Canada,’ the 80 per cent increase will place our beautiful BC in the whopping seventh place, with an additional small-business tax rate reduction of 40 per cent in 2017-2018.

Nice, eh!

What does this mean for you?

The increase will come in two stages:

  1.  The current minimum wage in BC of $10.45 per hour will go up by 40 cents to $10.85 in September 15, 2016
  2. Then it will raise to $11.25 in September 15, 2017

Liquor servers (who get  $9.20 per hour ) will get the same wage increases on the same dates.

Though the wage hike is not being celebrated by everyone, it’s a definite step up!

office-raise-the-roof

Raise the roof to that!

 

 

You can do it: File your taxes on time!

baby crying tax

Wah, scream, scratch. Tax season can make the best of us rip out our hair in a deadline frenzy, then hurl our bodies into a dark corner, where no one (*cough* CRA *cough*) can ever find us, ever, ever again.

Do this instead.

File and pay your taxes on time otherwise you risk serious consequences, especially if you owe the CRA money. And while the task can seem daunting at best, the CRA can be pretty reasonable, but, just like a hungry baby, they do NOT like to be ignored.

Income Tax CRA Deadlines

  • The personal income tax deadline is April 30 IF you have taxes owing. If you don’t have taxes owing, you are not required to file a return. However, we recommend that you do so anyway to get your refund and stay eligible for government benefits such as GST cheques, child tax benefits, premium assistance for MSP and Fair Pharmacare.

  • The income tax deadline for self-employed individuals is very deceiving. If you don’t owe taxes you have until June 15th to file HOWEVER if you owe taxes you need to pay them prior to April 30. without doing your tax return you have no idea what is owing, so we recommend that you file your taxes for the April 30 to avoid interest.

GST

  • Annual GST payment and filing for  incorporated companies is due March 31st, 2017

  • Annual GST payment and filing for sole proprietors is due  April 30th, 2017 despite the fact that your remittance form will say June 15 as the due date. Please see above regarding deceiving deadlines for self-employed individuals.

Employer Deadlines

  • T4’s must be filed with the CRA and given out to your employees before Feb 28, 2017, if you want to avoid late penalties, which are $25/day.

What are installments??

So you have filed your taxes and discovered that you owe the CRA a lot more money than you expected. You feel your heart sink, you cry for a while and you curse the government for ruining your life.

Just as you finally begin to accept your fate and begrudgingly drain your bank account to pay off your mammoth bill, you receive an installment notification from the CRA. This notification informs you that due to the fact that you owed the government more than $3000 on your previous tax return you are now required to make quarterly tax installment payments (pay your taxes in advance) for the current year. If this isn’t bad enough the fine print will notify you that the first payment is due right away and that failure to pay the amounts requested by their due dates will result in interest being charged.

Although not every person with a bill over $3000 will receive this notification, you should plan to receive it so that you are mentally AND financially prepared.

Important Information about Installments

  • If you DO NOT get an installment reminder, you DO NOT need to pay installments, unless you would like to voluntarily.

  • Installment payments are typically due in March, June, September, and December.

  • You will get a statement of installments paid from the CRA that you will need when you file your taxes.

  • Installment interest will be charged if you receive an installment reminder and you fail to pay the amount owing in full by the due date.

Exceptions to the Rule

If you anticipate your income for the year is going to be much lower than your previous years’ income eg. you are going on maternity leave and won’t be working for 5 months of the year.

Contact the CRA and discuss this with them. If your tax owing at the end of the year is below $3000 then you won’t be penalized for not paying the installments.

If you need help filing your income tax please don’t hesitate to contact Homeroom SBS today.

Happy tax season!

Job Alert: Looking for a fabulous bookkeeper!

career search, job search, bookkeeping, quickbooks, small business, income tax, vancouver bookkeeping, vancouver careers, hiring Vancouver

Riding on the back of the shear excitement of another successful tax season, we knocked down a chunk of the back wall and increased our office space by an entire room. The Lady in Charge Teya finally gets the much needed privacy of her own office, and we get more legroom.

Yes, more room for awesome!

So, what does that mean for you?

We are looking for a fabulous part-time bookkeeper to join our growing  team of six, and take over the lonely, soft, leathery chair with your name on it.

Our hiring process is simple. We don’t bother with resumes, and wasting paper.


Do this instead:

  1. Click the pink button below
  2. Follow the instructions carefully

Reply here by answering the following questions:

  • Where do you see yourself in 5 years?
  • If you could be an animal what would you be and why?
  • How many years experience do you have working with Quickbooks?
  • Why do you want to work at Homeroom?

Homeroom Small Business Solutions is a growing, fast-paced tax preparation and bookkeeping company based in Vancouver. We pride ourselves on providing quality customer service, accurate and honest bookkeeping and great employee benefits.

We love what we do and want to find additional team members who are passionate about providing great customer service, set and achieve high standards of work, pay close attention to detail and who are loyal, motivated and passionate about life and business.

In return we will offer you a stable, flexible, supportive workplace with opportunities for growth.

We currently have a part-time position available, with a potential for full-time, for a qualified bookkeeper starting mid May.

Salary + Benefits will depend on experience.

We also pay commission for any clients you bring to the company.

Must have:

  • Min 1 years experience using Quickbooks Desktop
  • Strong understanding of GST and PST
  • Strong understanding and ability to troubleshoot bank reconciliations
  • Patience to train and answer questions from junior bookkeepers on our team
  • Experience processing payroll
  • Excellent customer service skills
  • Excellent communication skills
  • Ability to quickly learn and adapt to changing technology
  • Ability to work well within a team environment
  • A willingness to learn new bookkeeping procedures
  • An optimistic, friendly & supportive attitude
  • Ability to enter data in a timely and accurate manner

Bonus:

  • Experience using Client Track or similar databases
  • Experience using Quickbooks Online
  • Ability to generate and read reports

If you believe you are the perfect fit please send us an email answering the questions at the top of the ad. No phone calls or drop ins.

Job Type:

Part-time

Required experience:

  • Accounting: 1 year
  • Bookkeeping: 1 year

 

The truth and lies about GST/ HST

GST pinata

Launching a small business can feel like swinging blindly at a big, colourful, juicy piñata: a hit or a miss, but if it’s a strike, you get all the yummies and toys inside, along with some lame confetti and papier-mâché filler.

The lackluster, more boring, of the bunch become the key steps and financial decisions to starting a new business. But, without careful planning, you might as well be that person with their eyes shut, hopelessly flailing their stick into open air.

One of the things you need to consider is whether or not you need to charge Goods & Services Tax (GST).

We hope our handy tips and our clarification of some common myths helps you move forward in your small business planning.

 What is GST?

  • GST is an input tax: Meaning that the amount that you PAY to others reduces the amount that you OWE.

Why would you register for GST before making sales of $30,000?

  • If you are starting your small business and incurring high start-up expenses. You can get a refund on the GST that you pay on those expenses.

  • Some potential clients might not want to do business with you if you don’t have a GST number.

Why would you hold off from registering?

  • Keep your paperwork simple for as long as possible. If you register you will need to hire a bookkeeper to make sure your returns are correct, filed properly and on time.

  • When you bill your clients your total will appear cheaper than a competitor who charges GST.

 It’s July and I’ve just made sales of $30,000. What do I do now?

  • By law you have 3 months AFTER you have made sales of $30,000 to register and start charging GST.

  • You must include your GST number on all your invoices.

  • You must keep all records of GST charged and paid for 7 years

Here are four common myths about Goods and Services Tax:

Myth: Every small business must register for GST.

Fact: Every small business that has made GROSS SALES of $30,000 in a calendar year must register.

Myth: I am registered for GST but my sales are less than $30,000 so I do not need to charge my customers the tax.

Fact: If you are registered, then you are obligated by law to charge all of your customers GST.

Myth: GST and HST are two different taxes.

Fact: In fact they are the same tax being paid to the same agency (Canada Revenue Agency). The only difference is that in BC we now charge GST of 5%; before we charged HST of 12%.

Myth: My Business number is different from my GST number.

Fact: Your GST number is your Business number (9 digits) with the ending RT0001.

Fix and flip: Three things you need to know about house-flipping in Vancouver

house flipping vancouver

I see a  beautiful, white 10-bedroom villa, with a long, spacious veranda that leads to a vineyard, overlooking a flowery hillside. The birds are playing in the field, chirping my favourite tune, with crops that are gently swaying in the warm summer breeze. Life is awesome. 

They say, “One person’s trash is another person’s treasure.”  When it comes to flipping houses, it comes down to this:

  1. Have a vision
  2. Be brave
  3. Sell for profit

What the flip?

It’s when you see that junky house or an apartment and envision something different in that space, be it new, shiny tile floors and a fresh coat of paint, or a complete and utter gutting of the space.

So you buy it, spice it up, and sell it for profit. Flipping easy, right?

Suddenly, that run-down house becomes a mansion and that dude refreshing himself with a cold beer in front of it turns into a swimming pool. At least in your imagination they do, for now…..

Here’s the bare bones of house/ apartment-flipping:

  1. Find cheap land/ apartment. Without a good deal, there will be no margin for profit once the renovations are complete and all the other fees are paid out.
  2. Don’t spend more than 40-50K. If you are flipping an apartment that is 500-800 square feet, you should not be spending more than 40-50K on the renovation before you sell or you won’t be able to sell it for a high enough price and you might lose money.
  3. Rent it, don’t sweat it. House-flipping is less popular in Vancouver than apartment-flipping. Developers and homeowners can usually make more money just buying and holding the land for 6-12 months or more while renting the house, and making a significant profit of the appreciation of the land.

Tip: Like anyone engaged in the intricate art of renoing, you will need a cool bookkeeper to manage your expenses, file your GST return and make sure your taxes are filed properly.

That’s where we come in.
We can definitely connect you with some kick-ass professionals in the industry, or just take on your books!
Happy house-flipping!

 

 

 

 

Avoid procrastination, after reading this

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Even The Number Cruncher, Allysia Lewis gets occasionally sidetracked by the internet……

Virtually everyone is prone to procrastination. A new Donald Trump meme can induce low-brow fun and hysteria even for the most focused cat person ….and put that important tax preparation on the back burner.

The Lady in Charge Teya was interviewed by the CBC about the topic of procrastination. This was fitting for two reasons:

A lot of people procrastinate about organizing their bookkeeping and taxes (even when the tax deadline April 30, 2016 is peeking like a creepy clown behind a wall). As a the owner of a bookkeeping company Teya’s job is to help business owners become more organized and meet their CRA submission deadlines.

As perpetual procasters, we have found that Teya has an impeccable ability to avoid distractions (such as social media) and get things done. (If we could nominate her for the “least likely to procrastinate” award, we would.)

You can get there, too–we all can! Stick to the following five tips to really increase your productivity.

1. Outsource

Starting a new business can be quite costly so it is common for business owners to take on the initial roll of “everything to everyone” in order to keep costs low.

Although this isn’t a bad way to start, as time goes on and the business grows this workload can begin to become unbearable. This is where the procrastination starts.

According to an article by Phyllis Lokki in the New York Times the larger your workload the more likely you are to become overwhelmed and start procrastinating.

This is why outsourcing certain tasks is really important. It allows you to reduce your workload, free up some of your time and focus on your strengths.

For example: Teya has outsourced writing this blog to me because she is so busy making sure your taxes are filed on time 🙂

2. Lists, lists, lists and more lists

Write everything down and prioritize your important tasks. It is easy to use small tasks as a method of procrastination because they give a false sense of productivity.

Think about the revenue each task will bring you and then prioritize accordingly.

For example: Vacuuming your bedroom floor, although necessary, will bring $0 to your business so it should be last of your list. Completing work for your client will bring in revenue so it should be a priority (you can then use this income to outsource your vacuuming)

3.Limit your social media usage

This is easier said than done, especially when social media is so prominent in most people lives.

Time your usage. Create a social media plan that allows you to fit your daily social media into 20 minutes per day and stick to it OR outsource your social media management to an employee or to a firm.

It is very easy to get caught in a social media vortex. All it takes is for you click on a one link and before you know it 2 hours have passed.

4. Make sure you take breaks

Breaks allow you to refresh your mind. There are several studies that reveal taking a break to eat your lunch or to go for a walk actually increases your productivity.

So stop eating at your desk and enjoy some fresh air.

5. Only check your emails twice a day

Emails are often a procrastinators drug of choice. Don’t get me wrong they are important. However,  it is easy to fall into the trap of checking them 300 times a day.

You need to limit the time you spend with your emails so that you can focus on other important tasks.

Most people are happy/ pleasantly surprised by a same day turnaround. So even if you only respond to emails once in the morning and once in the afternoon that is usually all you need to ensure positive feedback from your customers.

A great tip suggested by Timothy Ferriss author of The 4 Hour Work Week is to set up an email response that lets your clients know exactly when and on what day you check and respond to your emails so you can manage their expectations.