At Tangs Accounting Services, we are rooting for small businesses.
When you open up a small business, it is essential to have your finances in order before you take any steps forward. Small businesses rely on accountants to help them with their bookkeeping, taxes, payroll and any required consulting. At Tangs Accounting, an accountant for small businesses is there every step of the way.
In Toronto, we offer a full spectrum of services for your business’s everyday needs. Using our experiences, we’ve developed several accounting tips for local small businesses.
Tip #1: Register Your Business
Registering your business is the first step to establishing your place in the industry. For any business to be legitimate in Canada, it must go through the registration process.
At Tangs Accounting, accounting tips for a small business is essential, and that’s why we provide a team of experienced public accountants to streamline the registration process for new small and medium-sized Toronto businesses.
Step 1: Register the Business
- Register the business with the Government of Ontario.
- Updates any corporation share changes.
- If you move or any business changes, we will help keep your information updated.
Step 2: Business Licenses
- Depending on your business, obtain an alcohol or lottery license.
- At Tangs Accounting, we will help and fill out all the paperwork needed to receive your licenses.
Step 3: Annual Return Filing
- All businesses under The Canada Business Corporations Act (CBCA) are obligated to file an annual return.
- Tangs Accounting can help you prepare the necessary information and documentation.
- What you will need: last yearly meeting date, corporation type, legal director of your business.
Step 4: Minutes Books Preparation
- A record of all activities.
- Help keep track of corporate, federal and tax purposes.
- According to Ontario Business Corporations Act (OBCA) and CBCA, all businesses are legally obligated to keep an up-to-date minutes book.
Tip #2: Get a Notice to Reader Financial Statement
Credit: vinnstock via Canva
For many small business owners, a Notice to Reader financial statement is an important part of the process. These statements are a collection of financial documents that may carry out several purposes, including investor relations, creditor reports, or merging or acquiring a company.
When establishing your small business, you might need a Notice to Reader statement, which is part of our accounting services for businesses.
A Notice to Reader statement includes:
- Essential business information
- Financial data
- An income statement
- A balance sheet
- A cash flow statement
- A statement of retained earnings
There are various uses for obtaining a Notice to Reader statement, including:
Bank Financials
Typically, if a small business applies for a loan, the bank will require a Notice to Reader statement.
Investors
Investors will want a statement to display their current and potential financials.
Selling a Business
Whether you are selling your business or looking to merge, this statement will outline your business financials to a potential buyer or a merging company.
Yearly Reporting
Tip #3: Know Your Taxes
Essential accounting tips for small businesses are to have the knowledge and an understanding of your corporate tax services. Tangs Accounting Services want to help you prepare and file your small business taxes, so when tax season comes around, you are ready.
T1 for Sole-Proprietors
T1 is for the exclusive owner of the business who is entitled to all of the profits earned after paying taxes. It is essential to know that the sole proprietor is also liable for any business losses.
The sole proprietor will outline their income gain or loss on their T1 report.
T2 Corporation Income Tax Returns
All businesses in Canada must file a corporate income tax return with exclusions of registered charities, Hutterite colonies, and tax-exempt Crown corporations. This tax return must be filed even if your business has no tax to pay.
T1 for General (Including US Income)
Once you file either a T1 for sole proprietors or T2 corporate tax, you will also need to fill out a personal T1 form. This form will reflect your personal income. However, since you can claim your incorporated businesses’ income and expenses on your T2, you do not need to claim them on your personal T1.
Tip #4: Keep Track of Your Bookkeeping
One of the many common accounting mistakes is bookkeeping-related. It’s easy to lose track of your records, and when improper bookkeeping occurs, it can create unnecessary problems with the Canada Revenue Agency (CRA).
With Tangs Accounting, you will be on top of all your bookkeeping needs, including:
Monthly Bookkeeping
To avoid an overwhelming tax month, monthly bookkeeping prevents last-minute tax preparations. When you stay up-to-date and on top of your bookkeeping, you will be ready and alert to any red flags that may come up.
What does monthly bookkeeping involve?
- A monthly expense report
- Credit card and bank account reconciliation
- Individual credit card purchase transaction records
- Payroll reconciliation
- Collections process
- Tax returns
- Maintain vendor W-9 information
Quarterly Bookkeeping
On average, businesses review their financials four times a year. Quarterly bookkeeping is a skillful way for businesses to see which quarter was the strongest and how to gauge going forward in the years to come.
What does quarterly bookkeeping involve?
- Payroll payments
- Tax payments
- Cash flow review
- Profit & loss statement
Annual Bookkeeping
One of our small business accounting tips is to provide annual bookkeeping services. In Toronto, we’re here to help businesses review, track and record their annual finances.
What does annual bookkeeping involve?
- A copy of any prepared financial statements
- Individual bank statements for the previous 12 months
- Cheque stubs and returned cheques
- Deposit book and slips
- Individual credit card statements from the last 12 months
- All purchase receipts from the last 12 months, organized by month
- Monthly customer invoices from the last 12 month
- GST remittance form
- Payroll remittance forms
- All records of government communication
- Annual home office expenses
- Monthly vehicle expenses include annual mileage
When it comes to finding accounting tips for a small business with experience and proven customer satisfaction, Tangs Accounting is Canada’s first choice for professional accounting services. From registration to tax season, we’ll help you develop your small business and answer your questions every step of the way.
