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Carl Bard

“It's better to look ahead and prepare than to look back and regret”

Jackie Joyner-Kersee

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Audrey Hepburn

Business Advisory, Personal and Corporate Taxes, Business Start-Up, Bookkeeping

News You Need to Know

Succession Planning for Your Business

Posted May 1, 2019

I’ve Created a Great Business—Now What?

It is a critical part of running a business, but one that too few business owners do—succession planning.

When the current owner retires or something happens that makes the current owner unable to continue running the business, it is essential that there is a plan to continue operating or sell the business.

How Do I Get Started?

Your first step is an exit strategy—what do you want to have happen? Do you want to sell your business to a manager or your employees? Do you want to sell it to an outside party? Do you want to transfer it to interested family members?

Once you know where you want to go, your professional team (including your accountant) can help make it happen.

When Should I Do This?

The time to start planning is now; succession or sale planning for a business can be a lengthy process, and it is best not done at the last moment.

If you decide to sell your business, prospective buyers will want to see at least two years of financials (more is better). If employees or managers want to buy your business, they will probably need to get financing in place, which can involve term life insurance policies.

Who Will You Need on Your Team?

Succession planning is likely to involve at least four advisors—your accountant, your lawyer, your banker, and your insurance broker. Your accountant will be critical in getting and keeping your finances in order. Your accountant will also be crucial in advising you of tax strategies for the path you decide to take with your business.

As noted in this article from CPA Canada,

“Succession planning is a multi-disciplinary planning process and key advisors such as a CPA and lawyer should make up your advisory board. A CPA can add value when it comes to the financial plan, determining the tax implications of the business transition and helping to advise on strategies to reduce or eliminate estate and income taxes.

“The planning process may also reveal that selling the business—rather than maintaining a successive ownership—is the best option for your business.

“In such a case, proper accounting records are essential to meet the demands of future buyers and investors. A clean and audited balance sheet, reviewed and audited by an independent CPA firm, in addition to other financial statements, will be a minimum requirement.”

For a little more detail, here is a video from Main Street Financial Solutions.

Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.

Tax Avoidance Versus Tax Evasion

Posted April 23, 2019

Taxes—A Love/Hate Relationship

Canadians (like most of the world) have a love/hate relationship with taxes. On the one hand, we like the services that our pooled taxes provide, but on the other hand, we hate sending our hard-earned money to the government. Avoiding paying more taxes than your share is a smart financial move; evading taxes is a crime.

Reduce Your Tax Bill Legitimately

Reducing your tax bill legitimately means working within the tax laws and regulations and figuring out ways to take the deductions you can legally take, and report what you need to report. It might take the form of figuring out what to do and when, with one choice having a better tax implication than another, which requires tax expertise on the part of your tax preparer.

Tax Evasion Is Illegal

Tax evasion is going outside the law, and it is not a good idea. As noted by canadianaccountant.com, “It’s critical to understand the difference between tax avoidance and tax evasion. Tax evasion involves either not following or breaking the rules of Canada’s Income Tax Act to avoid or minimize taxes, thus making it an illegal activity.

“Examples of tax evasion would be failing to report, or under-reporting income, or taking excess deductions for expenses that may not have been incurred while earning income. The Canada Revenue Agency (CRA) takes this very seriously.” 

For a little more explanation on the difference between tax avoidance and tax evasion, check out this video.

Hire a Good Tax Preparer

A good tax preparer will help you figure out how much you owe and how to legitimately reduce your tax bill. They WON’T help you break the law by slipping over the line from reducing taxes to evading taxes. 

Shaw & Associates Is on Your Side

Taxes are complicated and changing every year. It’s a good idea to have your taxes prepared by someone who is familiar with the current Canadian tax laws, and is also available to defend your taxes if you happen to get audited. The tax team at Shaw & Associates Chartered Accountants are tax experts; it’s our business to know the current tax laws, and we’ll be in your corner if you need us.

Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.

Protecting Our Customers from Fraud

Posted March 29, 2019

An unfortunate reality of owning a business is that you could be dealing with fraud at some point. As per Xero.com

“According to the world's largest anti-fraud organisation, the Association of Certified Fraud Examiners (ACFE), small and mid-sized businesses are the most common victims of organisational fraud. And the effects can be more damaging.

Small businesses report 31.8 percent of all instances of fraud—a higher rate than for larger businesses—and suffer greater losses in relation to their size. And more than half of all small businesses that suffer fraud don’t recover any losses.”

How Well Do You Know Your Employees?

Small- and medium-sized businesses are shockingly vulnerable to fraud and theft from employees. Small business owners can have long-term staff that they think of as friends or even family, and their employees can take advantage of this by engaging in fraud and theft from the business.

The First Step Is Knowledge

An important function that Shaw & Associates Chartered Accountants can offer our clients is information on how to avoid becoming a victim of employee fraud. Being knowledgeable about how fraud and theft happens within a business, and how to prevent it, can be extremely useful to our clients.

Policies Can Help Reduce Fraud and Theft

We can examine the procedures our clients have in place already, and work with them to institute new policies and procedures to limit the risk of fraud and theft. Shaw & Associates can also act as the “bad guy” if necessary — “our accountants say we can’t do this, so we have to separate these duties,” — if business owners aren’t comfortable with putting new limits on long-term employees.

Divide Your Duties!

Small businesses can often have very few people doing all the duties, some of which should be separated as a check on fraud. Having Shaw & Associates divide duties involving cash, cheques, and accounting by acting as a virtual Chief Financial Officer (CFO) can prevent in-house fraud. For example, your accounting clerk can input all the accounting data, but the cheques are run by Shaw & Associates.

Fraud is common, unfortunately, but Shaw & Associates can help you figure out where your vulnerabilities are, and fix them before a crime occurs.

Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.

The Importance of Bookkeeping for Your Business

Posted March 11, 2019

Stay On Top of Your Business Transactions

Businesses of all sizes generate financial transactions. Staying organized and up-to-date on these transactions is critical for business success—all the decisions you make for your business are better decisions when they are based on current information.

Day-To-Day Financial Records

Small businesses tend to have an accountant that looks after their taxes, and may do quarterly reviews of the business. These are a great idea for small businesses, but a bookkeeper that enters your daily transactions regularly is also a very good idea.

Order Out of Chaos

As noted by Xero.com:

“Bookkeepers create order out of chaos. They take all the numbers, receipts, bills and other accounts data that flows through your business. They funnel it all into your accounting software—into the right reports and the right account.

They turn all this data into meaningful financial information. It will all be in the correct place, properly filed and organized. This can be used to give you an immediate view of the health of your business.

A good bookkeeping partner will be with you every step of the way as your business grows. So it pays to take your time and make sure you hire the right one.”

Want to know more about the value of using a bookkeeper? Check out this video from Allan Madan.

Custom-Built Bookkeeping Plan

Shaw & Associates Chartered Accountants can do all the bookkeeping that your company requires. We will work with you to create a bookkeeping plan that is custom-built for your business, looking after your books as frequently as you require. If you use accounting software, we can work with it, either online or in-house. We will also generate reports for you, to see exactly how your business finances are doing.

Don’t Miss Important Dates!

Shaw & Associates can also keep track of your important accounting dates (GST return due, income tax due, quarterly accountant meetings, etc.), and make sure that up-to-date information for these deadlines is provided.

You’re busy running your business; it will help with your workload and your stress to know that Shaw & Associates is looking after your bookkeeping and your important accounting deadlines.

Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.

The Future of Accounting

Posted February 12, 2019

The Robot Revolution Is Coming!

According to The Verge, “A new report noted predicts that by 2030, as many as 800 million jobs could be lost worldwide to automation.”

You could argue that computers and automation are in the process of taking over the world. What does the future look like for accounting companies? At first glance, it might look like accounting occupations would be one of the easiest jobs to automate—there is a lot of repetitive data entry involved in accounting that could be automated.

Automation Freeing Up Accountants to Become Advisors

On the other hand, the reasons for hiring a professional accounting company like Shaw & Associates Chartered Accountants now are the same reasons that accountants are likely to survive the robot revolution.

Says Canadian Accountant, “[T]he key to our ongoing relevance will be our professional judgment, pointing to our ability to interpret information and provide guidance to employers and clients.”

In a different article, they go on to say, “[W]ith recurring tasks out of the way, accountants will be free to tackle more complex issues, such as the interpretation of data and the implementation of business processes… Even with automation through AI, humans will still be needed to oversee strategy, balance conflicting business priorities, and ensure that ethical guidelines are followed. Plus, there is no machine that can build trusting relationships with clients; that can only be done by living, breathing human beings.”

Shaw & Associates is more than happy to handle your data entry needs, but there is so much more to a business relationship with your accountant. To successfully move a business forward, you need to have an accurate picture of where you are, and where you want to go, and that’s what professional accountants can do for you. This will not change with automation.

More Than Data Crunchers

Canadian Accountant points put that, “More than ever before, we need to position ourselves less as human calculators and more as innovative experts who are trusted advisors. Deliberately downplay the business of crunching data. Emphasize instead your value as an irreplaceable expert source to help your clients maximize revenue and reduce expenses and taxes.”

Accounting professionals are much more than data crunchers; they are invaluable expert financial and business advisors who understand what it takes to keep your business healthy financially. Your accountant builds a relationship with you and your business, going above and beyond to understand what you need even if you don’t. After all, you aren’t in the accounting business; you’re in the business of running your own business. We’re in the business of helping your business.

Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.

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