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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
Workshops:
accountrain accountrain now offers a series of four workshops. The informative and interactive format guarantees a comfortable and fun learning environment. Save when you register for two or more. The 1/2 day workshops include:
1. Understanding How to Read Financial Statements
- Review the 5 key sections of the Financials
- Key accounts, definitions, ratios and review of samples.
2. Accounting 101 - for new and small business
- Review common questions
- Understand 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 the year-end process
- Learn to streamline your bookkeeping methods to save time and money
4. Spreadsheet Bookkeeping
It doesn't have to be so complicated!
- Review the 5 key elements to track
- Discussion on what to expense and how to record them properly, including home and car usage
- Learn how it ties into your annual Income Tax return
- Leave with a working spreadsheet for your business
Next Sessions: 2010 or as requested.
Limited seating, for more information on each workshop, upcoming dates or to register email
accountrain
If you would like to see your ad here contact accountrain for more information about advertising in e-ccounting.
You may qualify to have you first ad for free.
Congratulations to Emma Inns, owner of AdorIt. Emma is a finalist in the Ottawa Chamber of Commerce Business Achievement Awards for New Business of the Year.
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Business Scenario
- Are you ready for year-end?
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I was working with a new client and was surprised when I asked them when their year-end was and they didn't know. |
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| Answer |
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There are three types of businesses:
- Sole Proprietor
- Partnership
- Corporation
For both a sole proprietor and a partnership, the year- end is automatically December 31st. The reason for this is for these two types of businesses their is no extra Income Tax to prepare.
Therefore the income (and expenses) incurred, for these business types, becomes part of your personal income tax return, which is based on a calendar year.
For Corporations the year-end is usually on the anniversary date of registering the business. This is known as the fiscal year-end. However, the year-end can be changed, see the "Did You Know" section below.
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| Accounting Tip |
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Year-end can be very time consuming regarding bookkeeping, as you are forced to clean up messes that have occurred throughout the year.
Therefore try and stay on top of things, by doing a review at least quarterly.
Hint: If all the accounts on the Balance Sheet are reconciled, chances are the books are in pretty good shape.
Discuss this with your accounting team to see if they are equipped for this as it may require more time and experience.
Hiring an intermediate-level bookkeeper to assist in this task, on a quarterly basis, could save you time and money at year-end. |
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| Did You Know ? |
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Corporations can change their year-end to suit their needs. If the anniversary date is not convenient due to being your busiest time, or you'd like your year-end to match the industry standard, discuss this with a Chartered Accountant, as they are equipped to file the proper paperwork to make this request on your behalf.
Note changing year-ends can not be done on a regular basis, as this may be intended to manipulate the figures. (note, changing a year-end will guarantee a shorter year depending on how many months earlier the year-end will be.)
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For more Did You Knows? |
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| Definition |
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Calendar year versus Fiscal year
The January to December calendar year is used to track bookkeeping and accounting for Sole Proprietor and Partnership businesses.
The fiscal year is the twelve month period covering the business year of a corporation, initially based on it's anniversary date.
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For more definitions ... |
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| Sandy's Recommendations |
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Make sure you understand all the deadlines that come with year-end. For example: If a Corporation has a year-end of March 31st, if it made a profit, the taxes are due 3 months later, on June 30th. However, the paperwork (tax return) is not due until September 30th. That said, it is unlikely the paperwork would not be ready, as this is what is needed to calculate the amount due.
If the taxes and paperwork are submitted late there will be interest and penalties due on the account. There may also be a "red flag" assigned to the account.
If the corporation does not make a profit, the paperwork can be submitted up to September 30th (again using the example of the March 31st year- end).
Don't assume that if you get your bookkeeping completed, including working papers, done by a reasonable date that a professional accountant will turn it around within the deadline.
HINT Make an appointment to have your taxes done. Call your CA (or whoever is doing your taxes), tell them when your taxes are due, ie June 30th, and then ask them "when do you need my file in order to reach this deadline?"
Another hint - unless you were dissatisfied with whoever prepared your taxes from the previous year, it is beneficial to be consistent and continue with the same preparer year after year.
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Next Issue - Government requirements |
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Learn:
- What the difference is between Federal and Provincial requirements.
- Recommendations on how to file the paperwork.
- Who can help if you really don't get it!
- When everything is due.
- The bookkeeping differences for past versus present payments.
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Upcoming Issues |
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Here's a glimpse at some topics for upcoming issues, if you have any suggestions, send them to us at accountrain accountrain@magma.ca:
Learn:
- Reports
- Payroll
- Capital (Fixed) Assets
- Inventory
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