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about e-ccounting
e-ccounting is a monthly
newsletter focusing on accounting tips and solutions.
Our mission is to educate our clients, students and
readers by offering these resources in response to
your ongoing questions.
It is our objective to
gather information and provide easy access for your
current and future needs.
Back-issues are
available on the accountrain website.
These tips are not complete answers to complex
questions. We therefore recommend, when in doubt,
contact the professionals or government
agency.
about accountrain
accountrain simplifies the client /
accountant relationship.
accountrain offers a unique
combination of knowledge and people-skills to solve
all your accounting needs.
accountrain specializes in the how's
and why's of accounting.
Is accountrain the right accounting
team for you?
Find out
more....
Pass It On !
Please forward this to anyone you feel may benefit
from some free accounting tips. They'll be
glad you did.
Sandy's Question Corner
Do you have an accounting question? Send it to us at
accountrain@magma.ca
Workshops:
accountrain is now offering a series of three
workshops. Take one, two or all three and save as you
learn. The informative and interactive format
guarantees a comfortable and fun learning
environment. The topics:
1. Understanding How to Read Financial Statements
- Who's interested in your reports and why
- Why there's more to the Income Statement than
just the "bottom line"
- What's so important about the Balance Sheet,
and
- Key accounts, definitions, ratios and samples to
review.
2. Accounting 101 - for new and small business
- Review of common questions, including GST,
incorporating and many more
- Choices for maintaining bookkeeping
- Understanding government requirements
- Shortcuts, tips and organizing all that paper!
3. Year-end Prep & New Year Planning
- It's never too late to get organized
- Understand what's different including:
depreciation, accruals, deferred revenue and
prepaids
- How to choose accounting help
- Preparing for an audit, and how about avoiding an
audit!
- Learn to streamline your bookkeeping methods to
save time and money.
Fall dates have been scheduled. For more
information or to register, email
accountrain@magma.ca
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Business Scenario
- Keeping & Organizing Paperwork |
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I'm trying to keep my office organized, how long do I
have to keep my tax returns and other business-
related documents?
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| Answer |
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Tax returns and receipts, in case you are audited,
must be kept for the current year and six past
years.
In other words, currently we would keep all our 2008
records, as well as from 2002 to 2007.
Anything from 2001 and prior can be tossed!
Pay stubs - once you receive and agree to your annual
T4, there is no need to keep them any longer.
If you are incurring home and car expenses, the same
six years plus the current year rule applies.
For personal items, ie appliances, etc, keep receipts
until you either dispose of the item, or the warrantee
runs out.
For small items keep the receipt until it is no longer
returnable.
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| Accounting Tip |
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There are several ways to organize your papers and
getting help is OK, but keep in mind, it has to make
sense to you.
In the end you're the one who has to maintain your
filing system and find your stuff.
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| Did You Know ? |
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As the papers accumulate you may run out of
space!
There are two services that can assist with
this:
(1) Off-site storage facilities
It is recommended you identify the outside of the box
and keep a logue of what is in each box.
The facilities charge by the month for the amount of
space used, and will charge an additional fee when
you need a box to be retrieved.
The turn around time for both pick-up and retrieval is
usually within 24 hours.
(2) Shredding companies
There are different types of services. Some will
pick up and shred, while others will let you shred and
just pick up the waste.
The first is more common,
the business will allow you to drop off papers in a
locked bin, and make regular, scheduled visits to
retrieve the contents of the bin.
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For more Did You Knows? |
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| Definition |
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In past issues, Principles were introduced
(GAAP). There are additional rules in accounting
known as assumptions. One of them is "Separate
Entity Assumption".
"Each enterprise is considered as an accounting unit
separate and apart from other entities". In other
words, many people own many different businesses.
It is important to keep separate books for each one.
(taken from the 3rd Canadian Edition of Intermediate
Accounting by Welsch, Zlatkovich, Harrison, Nelson
and Zen).
How does this tie in to our topic on filing?
It will make life a lot easier, if you also keep all the
paperwork for each business separate as well.
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For more definitions ... |
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| Sandy's Recommendations |
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Filing for bank statements:
After the bank account has been reconciled for the
month, keep the bank statement with the cancelled
cheques.
Separate all the back-up information as
stated below:
Accounts Payable
Vendor Invoices:
Keep a folder for each active vendor / supplier. For
one-time suppliers, file in miscellaneous files. Don't
put all the miscellaneous together. For example, you
can have Misc A-G, H-N, M-S and T-Z.
As well, keep Government files together, PST, GST,
etc.
It is also easy to keep separate files for staff,
ie reimbursement of expenses, ie travel.
Prior to paying the invoices, keep them in a file,
perhaps in order of when they are due.
Payments (cheques)
Keep the cheque stubs together in numerical order,
including cheques that have been voided.
Accounts Receivable
Sales Invoices:
Keep in numerical order (in a folder or binder),
keeping unpaid invoices on top of the folder. With the
oustanding items left on top, it allows for a quick and
regular review of what is outstanding.
Deposits:
After they payments are entered, attach the cheque
stub to the back of the invoice, and file them in
numerical (or alphabetical) order.
Additional files
Some files once set-up, may only need to be
accessed on occassion. They include: insurance(s),
rental lease and equipment leases and warrantees.
You may want to keep payroll and personnel files
locked or at least not in a location that is accessible to
everyone.
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| Next Issue - Buying versus Leasing |
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Learn:
When is leasing a better way of expensing big
ticket items (vehicles and equipment)
What are the initial costs of both
Are there pros and cons
Who is responsible for what, ie. repairs
How does it all end?
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