Cash flow and budget are two essential aspects of any business, especially in Ontario, where the economy is dynamic and competitive. Cash flow is the movement of money in and out of your business, while budget is the plan of how you intend to spend and save your money. Managing both effectively can help you achieve your financial goals, avoid cash shortages, and prepare for growth and investment opportunities.

In this article, we will share some best practices and strategies for managing your cash flow and budget in Ontario, based on our experience as professional accountants serving clients in Innisfil, Barrie, Simcoe County and the rest of Ontario.

Understand your cash cycle

The first step to managing your cash flow and budget is to understand your cash cycle, which is the time it takes for your business to convert its resources into cash. Your cash cycle consists of four stages:

• Cash inflows: This is the money that comes into your business from sales, investments, loans, grants or other sources.
• Cash outflows: This is the money that goes out of your business to pay for expenses, such as rent, wages, taxes, supplies, inventory, debt repayments or dividends.
• Cash surplus: This is the excess of cash inflows over cash outflows in a given period. You can use this surplus to invest in your business, save for emergencies or reward yourself.
• Cash deficit: This is the shortfall of cash inflows below cash outflows in a given period. You may need to borrow money, sell assets or reduce expenses to cover this deficit.

To calculate your cash cycle, you need to track and measure your cash inflows and outflows on a regular basis, such as weekly, monthly or quarterly. You can use accounting software, spreadsheets or a simple ledger to record your transactions and generate reports. You can also use tools like CIBC’s Budget and Cash Flow Calculator to get a big-picture view of your cash flow and budget.

Plan ahead and forecast

The second step to managing your cash flow and budget is to plan ahead and forecast your future cash needs and sources. This will help you avoid surprises, prepare for contingencies and seize opportunities. To plan ahead and forecast, you need to:

• Set realistic goals: Based on your past performance, market trends and industry benchmarks, set realistic goals for your sales, expenses, profits and growth. Make sure your goals are specific, measurable, attainable, relevant and time-bound (SMART).
• Create a budget: Based on your goals, create a budget that outlines how much money you expect to earn and spend in a given period. Your budget should include both fixed costs (such as rent) and variable costs (such as supplies) that depend on your sales volume. You can use CPA Canada’s Planning, Budgeting and Forecasting resources to learn more about creating a budget.
• Monitor and adjust: Compare your actual results with your budget on a regular basis and identify any variances or discrepancies. Analyze the causes of these variances and adjust your budget accordingly. You may need to revise your goals, increase your prices, reduce your costs or seek additional funding.

Optimize your cash flow

The third step to managing your cash flow and budget is to optimize your cash flow by increasing your cash inflows and decreasing your cash outflows. Some strategies to optimize your cash flow are:

• Accelerate your receivables: Collect payments from your customers as soon as possible by offering incentives for early payment, issuing invoices promptly, following up on overdue accounts or accepting online payments.
• Delay your payables: Negotiate longer payment terms with your suppliers or creditors by offering discounts for bulk orders, requesting credit lines or paying by credit card.
• Manage your inventory: Keep an optimal level of inventory by ordering only what you need, selling off excess or obsolete stock or using just-in-time delivery methods.
• Reduce your expenses: Cut down on unnecessary or wasteful spending by reviewing your expenses regularly, shopping around for better deals or outsourcing non-core functions.
• Seek external funding: If you need more cash to grow or sustain your business, seek external funding from sources such as banks, investors, government programs or crowdfunding platforms.

Get professional help

The fourth step to managing your cash flow and budget is to get professional help from an accountant who can provide you with expert advice and assistance. An accountant can help you:

• Set up an accounting system: An accountant can help you set up an accounting system that suits your business needs and preferences, whether it is cloud-based, desktop-based or manual. An accounting system can help you record, organize and report your financial transactions and generate useful information for decision-making.
• Prepare financial statements: An accountant can help you prepare financial statements, such as income statements, balance sheets and cash flow statements, that show the financial position and performance of your business. Financial statements can help you monitor your progress, evaluate your results and communicate with stakeholders.
• Analyze and interpret data: An accountant can help you analyze and interpret the data from your accounting system and financial statements, using tools such as ratios, trends and benchmarks. An accountant can help you identify your strengths, weaknesses, opportunities and threats and provide recommendations for improvement.
• Comply with tax laws: An accountant can help you comply with tax laws and regulations in Ontario, such as filing tax returns, claiming tax credits or deductions, paying tax instalments or resolving tax disputes. An accountant can also help you plan ahead and minimize your tax liabilities.

Contact us today

We are a team of experienced and qualified accountants who specialize in serving small and medium businesses in Innisfil, Barrie, Simcoe County and the Greater Toronto Area. We offer a range of services, such as bookkeeping, payroll, taxation, business advisory and more. We are committed to providing you with personalized, reliable and affordable solutions that meet your needs and expectations.

Contact us today to schedule a free consultation and find out how we can help you achieve your financial goals.

Even though tax season is over, it’s never too early to start preparing for the next one. Filing your taxes can be a complex and confusing process, especially if you are not familiar with the tax rules and regulations that apply to your situation. If you make a mistake on your tax return, you could end up paying more taxes than you should, missing out on benefits and credits that you are entitled to, or even facing penalties, interest, or audits from the Canada Revenue Agency (CRA).

To help you avoid these common tax pitfalls, here are the top 10 tax mistakes that you should avoid in 2023, and some tips on how to prevent them.

1. Not reporting all your income

One of the most serious tax mistakes that you can make is not reporting all your income from all sources. This includes income from employment, self-employment, investments, pensions, tips, rental properties, and any other income that you received in 2022. Not reporting your income from T-slips is never a good idea, as the CRA receives copies of these slips and can easily cross-check them with your tax return. If you have unreported income, you could face significant penalties and interest, or even prosecution for tax evasion.

To avoid this mistake, make sure you keep track of all your income sources and report them accurately on your tax return. You can use the CRA’s Auto-fill my return service or Revenu Québec’s Téléchargement des données fiscales service to download your information slips and other tax-related information directly into your tax software. This can save you time and reduce errors. However, you should still review the information and make sure it matches your records.

2. Claiming ineligible or excessive deductions or credits

Another common tax mistake is claiming deductions or credits that you are not eligible for, or claiming more than you are entitled to. Deductions and credits are amounts that you can subtract from your taxable income or tax payable, respectively, to reduce your tax bill. However, not everyone qualifies for every deduction or credit, and there are often limits or conditions that apply. For example, you may be able to claim medical expenses, charitable donations, tuition fees, childcare expenses, home office expenses, and more. However, each of these deductions or credits has specific rules and requirements that you must meet in order to claim them.

To avoid this mistake, make sure you understand the eligibility criteria and the calculation methods for each deduction or credit that you claim. You should also keep receipts and other supporting documents to prove your claims in case the CRA asks for them. You can find more information about the deductions and credits that are available to Ontario residents on the CRA website or the Revenu Québec website.

3. Missing deadlines or filing late

A third common tax mistake is missing deadlines or filing late. The deadline for filing your personal income tax return for 2022 is April 30, 2023. If you have self-employment income, the deadline is June 15, 2023. However, if you owe any taxes, you still have to pay them by April 30, 2023. If you miss these deadlines or file late, you could face late-filing penalties and interest charges on your unpaid taxes. The late-filing penalty is 5% of your balance owing, plus 1% for each full month that your return is late, up to a maximum of 12 months. The interest rate is compounded daily and varies every three months.

To avoid this mistake, make sure you file your tax return on time and pay any taxes owing by the due date. You can file your return electronically using certified tax software or a web application. This can speed up the process and reduce errors. You can also pay your taxes online using various methods such as online banking, pre-authorized debit, credit card, PayPal, Interac e-Transfer, or My Payment. If you expect to owe taxes and cannot pay them in full by the due date, you should still file your return on time and contact the CRA as soon as possible to make a payment arrangement.

4. Not keeping records or receipts

A fourth common tax mistake is not keeping records or receipts of your income and expenses. Records and receipts are essential to support your claims on your tax return and to verify your income and deductions if the CRA audits or reviews your file. If you do not have records or receipts to back up your claims.

If you need help with avoiding these tax mistakes or any other tax-related issues, you can contact BFC Tax Accountants, a professional and reliable accounting firm servicing Innisfil, Barrie and the entire Simcoe County. BFC Tax Accountants have over 20 years of experience in providing accounting and tax services to individuals and businesses. They can help you file your taxes accurately, maximize your deductions and credits, plan your taxes throughout the year, and deal with any tax issues that may arise. Avoid tax mistakes and leave the job to professionals!

Filing your taxes can be a daunting task, especially if you have a complex financial situation or are not familiar with the tax laws and regulations. That’s why many people choose to hire a professional accountant to help them with their personal taxes. An accountant can provide a variety of benefits that can make your tax filing easier, more accurate, and more beneficial for you. Here are some of the benefits of hiring an accountant for your personal taxes in Ontario.

Save Time and Stress

One of the main benefits of hiring an accountant is that they can save you time and stress. Filing your taxes can be time-consuming and tedious, especially if you have multiple sources of income, deductions, credits, or investments. You may also have to deal with complicated forms, calculations, and deadlines. An accountant can take care of all these tasks for you, leaving you with more time to focus on other things. An accountant can also reduce your stress by ensuring that your taxes are done correctly and on time, avoiding any errors, penalties, or audits from the Canada Revenue Agency (CRA).

Maximize Your Deductions and Credits

Another benefit of hiring an accountant is that they can help you maximize your deductions and credits. Deductions and credits are amounts that you can subtract from your taxable income or tax payable, respectively, to reduce your tax bill. However, not everyone is aware of all the deductions and credits that they are eligible for, or how to claim them properly. An accountant can help you identify and claim all the deductions and credits that apply to your situation, such as medical expenses, charitable donations, tuition fees, childcare expenses, home office expenses, and more. An accountant can also help you optimize your tax planning throughout the year, such as by advising you on how to make RRSP contributions, TFSA withdrawals, capital gains or losses, or other tax-saving strategies.

Get Expert Advice and Guidance

A third benefit of hiring an accountant is that they can provide you with expert advice and guidance on tax-related issues. An accountant can help you understand your tax situation and how it affects your financial goals. They can also answer any questions that you may have about your taxes or the tax system in general. For example, an accountant can help you determine the best filing status for your situation, whether you are single, married, common-law, separated, divorced, or widowed. An accountant can also help you deal with any tax issues that may arise, such as changes in income or circumstances, notices from the CRA, audits or reviews, appeals or objections, or voluntary disclosures.

Hire a Local Accountant in Simcoe County

If you are looking for a reliable and professional accountant to help you with your personal taxes in Ontario, look no further than BFC Tax Accountants. BFC Tax Accountants are located in Innisfil and serve clients in Simcoe County and surrounding areas, including Barrie. BFC Tax Accountants have over 20 years of experience in providing accounting and tax services to individuals and businesses. They offer personalized and affordable solutions for all your tax needs. Whether you need help with filing your taxes, planning your taxes, resolving tax issues, or anything else related to taxes, BFC Tax Accountants are here to help.

Don’t wait until the last minute to file your taxes. Contact BFC Tax Accountants today and let them take care of your personal taxes for you. You’ll be glad you did!

Accountants can assist you with their expertise at various stages where the growth of your small business is concerned. You have been asking, when should one hire a BFC accountant?

Hire an accountant to deal with Canada Revenue Agency, CRA or the government

It can be a little scary and nail-biting dealing with CRA tax filings and paperwork when you trying to make your business stay in ship shape. It makes sense that a good number of small business owners would much prefer hiring an accountant, especially during the first tax filing season.

Our accountants can assist you to run your business not just tax returns. They are knowledgeable and experienced in guiding your company in dealing with the government in so many other ways.

Our professional accountants will help you to:

• complete and file all legal and compliance documents required for your business to operate
• make sure your company is up to date with current tax laws
• prepare annual statements of accounts
• keep your company’s status updated with the government’s registration
• maintain all records of all directors and other administrative staff
• organize and record shares  and stock allocation – during the business formation, when partners resign and when new partners are brought on board
• handle your employee  payroll whilst ensuring all employees tax codes and payments are properly recorded

Preparing your tax documents the right way is a money-saver – and could even be more money saved than what your accountant charges you. Any good accountant will apply their experience and knowledge of Canada tax laws to recommend options to help you free up cash flow, save money and raise capital for business and other project expansions.

Challenges in growing a small business in Canada

There are several important reasons to hire an accountant from Baffilk Financial Consulting during the various stages of the growth of your company. Starting from the business plan, formation of the company, loan application and even government audit, a BFC accountant can make the process easier for you and your company at every step of the way.

The good thing about this is, you do not need to employ a BFC accountant full-time. You don’t even need to hire us on a retainer basis. There are times you may only need our services for a couple of hours and that’s it. You may also subscribe to any of our services which best suits your companies needs.

Just like any small business owner, you are always trying  to save money. This might make you think you can’t afford an accountant from BFC. Please consider how long it takes to learn, understand and undertake certain tax tasks even on automated tools like Turbo Tax. Do you think it is worth the use of your entire week or two trying to save a couple of hundreds of dollars by filing your company’s taxes and keeping your books all cleaned up?

Let’s dig a little deeper. Let’s say 10 hours is how long it takes you to file your company’s taxes. Since you’re trying to build a multi-million dollar company, let’s round off your worth experience and time investment  $100 per hour’s worth. That’s still $1000 of input just to file your company’s taxes all by yourself. What’s more, you will  make mistakes – most business owners are doing several things at a time hence mistakes are inevitable.

On the other hand, if you secure the services of a BFC accountant, all those  time-consuming tasks like taxes will be taken care of. And it will not cost $100 per hour in most cases. This leaves you with extra time to come up with new revenue generation ideas, the peace of mind of knowing an expert is handling your books hence all details will be covered without any errors.

Let’s look at other scenarios for any growing small business and how our expert accountants at BFC may be able to assist.

When creating a business plan, you need a BFC accountant

It’s important to secure the services of a BFC accountant during the writing of your business plan. With our expansive knowledge in accounting, we utilize the right accounting software which will enable us to create financial projections and relevant  reports needed. That is how a formidable, sound, realistic and professional business plan is created for success. Our business plan packages have been created to get you started right away.

Among the most stressful moments for many individuals in Canada is the annual personal income tax season, which occurs in March and April.

The year 2021 has been about money for many reasons, as there has been a lot of attention placed on the latest crypto, inflation, housing prices, taxes, and a few others. While income can go up and up or down and down depending on your business or cause, taxes are typically more predictable if you are prepared. 

There is never a bad time to decide whether to hire someone to fill out your forms or do them yourself. The degree of complexity — or simplicity — of your own tax situation can guide you in this choice.

One should always be primarily responsible for their income tax returns even if they hire an accountant or not. It’s up to the taxpayer to gather the year’s tax documents together — and those of previous years as well, if needed.

You are not ignorant of the fact that money is important to many aspects of our lives. Recently, a study by the American Psychological Association revealed that money has become a source of intense tension in many people’s lives, including work, family, personal health concerns, and other sources.

Tax deadline in Canada

The deadline for filing your 2021 personal income tax return and paying any tax owed comes on Friday, April 30, 2022. If you or your partner is self-employed, then June 15, 2022, is the deadline to file. The deadline to pay is still April 30, 2022. What happens if you are late with your deadline? Filing late means paying interest: 1% per month that you’re late (up to 12 months) and 5% on the balance you owe.

Tax brackets in Canada and how they show much you owe the Canada Revenue Agency

Without additional information, tax brackets are straightforward and simple: you find your annual income on your T4 slip and your tax rate is determined. Unfortunately, it’s not that straightforward. There are some calculations to be completed, as the tax brackets in the federal, provincial, and territorial taxes operate like climbing up the staircase of a highrise building. There are different tax rates at different levels of income. If your annual income falls within a specific range, then you could be subject to tax rates from two or three brackets.

To save you time, we break down the 2021 tax brackets for Canada and the provinces and territories based on annual income, showing the minimum and maximum tax dollars for each bracket—before tax credits, deductions, etc.

Understanding your tax bracket, and how it may affect you, will be able to help you plan and prep accordingly, so you’ll be able to expect what’s coming on April 30. Could boosting your registered retirement savings plan (RRSP) contributions change your brackets? Sometimes. You should also check to see if your employer has taken enough or too much tax out of your paycheque. Saving up in time to help cover your tax bills gives you the opportunity to save a little over anticipated tax payments if you are expecting to owe.

In case you missed the deadline for filing your 2020 income tax return

If you’re still reading this part, then there’s a big chance you missed the deadline for last year’s tax filing. Depending on your circumstances that could mean you need to take action ASAP to avoid owing any more to the Canada Revenue Agency. There is no penalty for submitting your taxes late without paying a fine, if you are due a refund. The government is happy to hold on to your money, interest-free, for a bit longer. By law, you have up to three years from the filing deadline to complete a return and get your refund.

Baffilk Financial Consulting has a goal to provide reliable accounting and bookkeeping services in Barrie so you devote that time investing in and operating your business. BFC utilizes all resources to set up financial platforms correctly from the onset, thus making your bookkeeping and accounting needs more robust and easy to handle. We have to improve your financial apparatus in an impactful way, that you will always prefer our methodology and not what you were used to – which wasn’t really that impactful or reliable.

When there is a lack of proper bookkeeping and accounting services from a professional accountant in Barrie, your business will hit a cash flow crunch. This will waste your time and money, hence hurting several opportunities. Baffilk Financial Consulting’s bookkeeping and accounting services in Barrie can manage your entire business, avoid the headaches of tax preparation, and unearth streams of revenue you didn’t know were possible. We aim to the operation of your business as stress-free as possible. Let’s take it from here whilst you can relax a little or focus your time on other more important aspects of your business growth.

Baffilk Financial Consulting provides professional accounting and bookkeeping services to not-for-profit organizations, small and medium-sized companies. Our accounting and bookkeeping services in Barrie are as follows:

• Certified Bookkeeping
• Not-for-Profit Bookkeeping
• Accounts Receivable
• Accounts Payable
• Bank Reconciliation
• Payroll Reconciliation
• General Journal, General Ledger
• Bookkeeping Clean-up
• Business and Personal Accounts
• Balance Sheet, Custom Reports
• Cloud Computing
• E-Commerce
• Profit Loss, Trial Balance

What professional accountants do

Our team provides accounting and bookkeeping services in Barrie to help set up a new business or clean up an already existing company. We create informed reporting and platforms to better run your business.

Your bookkeeper from Baffilk Financial Consulting can create budgets and projections so that you can plan your business strategically.

Baffilk Financial Consulting can help with GST/HST, payroll setups and integration of existing platforms. We will help streamline your bookkeeping systems with the correct checks and balances for best practices.

Our accounting and bookkeeping service are exactly you are looking for if the following applies to you:

• Have small to medium-size company or non-profit organization in the Greater Barrie Area.
• An individual who wants assistance with personal financial record-keeping.
• Starting a new company and want to make sure that everything is handled correctly from the beginning
• Spending too much time on your company’s bookkeeping and not enough time bringing in new business
• Mismanagement of financial records
• Full-time bookkeeper costs
• Quarterly and annual tax filings poor preparation
• Hoping your staff had a better understanding of accounting software

It is highly recommended to hire experienced bookkeeping and accounting service that has a strong proven track record of high client retention rate and stellar reviews. BFC is exemplary of these core strengths when it comes to bookkeeping and accounting services in Barrie. We have broad experiential knowledge and the day-to-day of all client accounts provide top tier customized bookkeeping and accounting services in Barrie.

Processing payroll is most of the time tedious and tiring. This is why most small business owners avoid it or hire an accountant to get it done. If you are a small business owner with employees in Canada, here are eight steps simplified for you to process your payroll.

1. Register with federal agencies

To run payroll in Canada, you need a Business Number (BN) and payroll program account through the Canada Revenue Agency (CRA). A BN identifies your business to the federal government. It’s the business version of a Social Insurance Number (SIN).

A payroll program account is a 15-digit number that contains your nine-digit BN. It’s your business’s unique identifier to the CRA. New businesses can register for a BN and payroll program account simultaneously on the CRA website.

The registration process requires the following information:

• Pay schedule, whether it’s weekly, bi-weekly, or semi-monthly
• Number of employees
•  Payroll software or service you intend to use

You may also need to set up accounts with the Ontario Workplace and Safety Board and the Ontario Ministry of Finance to remit workplace insurance and health tax payments.

2. Gather employee information

Next, collect the following information from your employees:

• Name
• Address
• Phone number
• Social Insurance Number (SIN)
• Date of birth
• Bank account information for direct deposit

Employees must submit federal and provincial TD1 forms. The information they provide determines some payroll deductions. You can download TD1 forms on the CRA website.

Enter this information into your payroll software. Employers who do payroll manually should create a secure records management system to store sensitive employee information.

3. Calculate gross wages

Gross wages are an employee’s earnings before payroll deductions, such as taxes and retirement contributions. An employee’s gross wages are the amount you put on his or her offer letter. Gross wages can be expressed per hour, pay period, or year.

Include taxable fringe benefits in the gross wages calculation. If you reimburse your employees for their cell phone or parking costs, add those benefits to gross wages. Check the CRA website for the taxability of benefits and allowances.

Hourly employees who work over 40 hours in a workweek or over eight hours in a day might be subject to time and a half overtime pay.

Consider Olivia, who works at a flower shop in British Columbia. She makes CA$60,000 per year and is paid twice monthly. Her annual gross salary is CA$60,000. She doesn’t receive any fringe benefits. She also brings a fantastic bouquet whenever she’s invited to a dinner party. Olivia’s gross wages for the pay period are CA$2,500 (CA$60,000 / 24 pay periods per year).

4. Calculate and deduct taxes and contributions

Both employees and employers buck up for Canadian payroll taxes and contributions.

As an employer, you’re responsible for withholding and remitting a portion of employees’ wages for taxes and contributions. CRA payroll deductions include:

• Federal income tax
• Provincial or territorial income tax
•  Canada Pension Program (CPP) or Quebec Pension Program (QPP) contributions
• Employment Insurance (EI) premiums
• Registered Retirement Savings Plan (RRSP) contributions

All but RRSP are required CRA deductions. CPP/QPP contributions apply to employees ages 18 to 69, and EI premiums apply to employees of all ages. Both employees and employers pay into CPP/QPP and EI, based on employee earnings. Contributions stop once they’ve reached their annual maximum. All provinces but Quebec follow the same contribution rates and limits.

In some provinces, employers with annual payroll expenses around CA$500,000 or more pay the Employer Health Tax (EHT), which helps fund the country’s universal healthcare system. Employees don’t contribute to EHT.

Your payroll software automatically calculates tax and contribution amounts according to tax law, your employees’ Forms TD1, and other information you enter.

Business owners who do their own payroll can use the CRA Payroll Deduction Calculator to calculate their employee paychecks.

I calculated Olivia’s paycheck dated April 1, 2020 using the CRA online tool.

Olivia’s paycheck is CA$1,933.97.

5. Reconcile and issue paychecks

Let’s get your employees paid.

Before you finish processing payroll, complete a payroll reconciliation to check for errors. Compare your payroll register — a list of payroll transactions — to your tax records and general ledger.

Once you clear up any errors, you’re ready to send out employee paychecks through your payroll software. Most payroll software packages offer portals where employees can see their pay stub.

Employers doing payroll manually should still provide a pay stub for employees to prove income when applying for loans and leases, get a status update on accrued vacation and sick time, and catch payroll errors.

Finally, record a payroll journal entry in your accounting software. You can integrate your payroll and accounting software to complete this step.

6. Remit deductions and taxes to the CRA

Now it’s time to send the deductions and employer taxes calculated in step four where they need to go. By default, businesses must remit payroll deductions by paper or electronically by the 15th of the month following the pay period.

But if that pay schedule doesn’t work for you, you’ve got options — honestly, more than you need. Established businesses can change to a quarterly, twice-monthly, or four-times-monthly payroll tax remittance cadence.

Send federal taxes, provincial taxes, CPP deductions, and EI deductions to the CRA. Send QPP deductions to Quebec’s revenue agency, Revenu Quebec.

8. Generate and share Forms T4

By the last day in February of the following year, you must share a Form T4 with each employee and the CRA. Form T4 summarizes the employees’ earnings and deductions from the previous calendar year.

In the packet of Forms T4 submitted to the CRA, you must include a summary form that sums all employee earnings and deductions.

Get help with your payroll if  the above is tasking.

If you made it to the end and you didn’t shed a tear at step four, kudos.

While it’s important to know how payroll works, you can feel comfortable letting payroll software take care of payroll tax and contribution calculations. When set up correctly, payroll software reduces errors (read: headaches) and increases efficiency.

We get it – the DIY-approach can be appealing, especially if it will save you money. However, when it comes to your books, taxes, and payroll, you want to watch out for amateur mistakes. When you hire an accounting professional, you’re also paying for their expertise, experience, and industry know-how.

Hiring a reputable accounting professional will help keep you on track with all business payments, bookkeeping, cash flow, financial development, and business expenses. If you decide to DIY your own bookkeeping and accounting, the opportunity cost might be that you make a serious financial business mistake. Hiring someone to manage your finances eliminates financial risks because the chances of making serious mistakes are almost none. Regardless of the business size, bookkeeping is important – not only for the purchase records, daily expenses, and sales but also for keeping track of all financial transactions. When you pay for professional accounting services, you will have a detailed record of all financial transactions, which will enable you to predict any potential financial losses or gains.

Accounting professionals are authorities in their field. Thanks to their expertise, they are capable of providing business advice about investments you are planning to make. They can help break down the economic cost of a project before your business takes it on. If you are new in the business world, professional accounting services can help you develop a useful cost accounting strategy and set up a solid structure for your business to be financially stable.

By hiring accounting professionals that are focused on your financial and accounting needs, you will be able to concentrate more on the core goals of your business and to grow your brand. Using a professional accounting service will help you run your business smoothly and avoid any major financial problems in the future.

You’ll get help in creating a business plan

Hiring a professional at this early stage will mean you get the benefit of their financial knowledge and advice right from the start. That could save you time and money compared with hiring one later.

You’ll get advice about your company’s legal structure

Not all businesses have the same legal structure – there are different types that are determined by a number of factors. Some might be called limited companies, limited liability partnerships or corporations, others could be sole traders or proprietors. These vary from one country to another.

You should carefully consider each type before deciding which one best suits you. For example, you may do business as a sole trader or sole proprietor, working on a self-employed basis and invoicing under your own name. If this is the case, you might be able to offset some of your living expenses against tax.

However, this also means you could be held personally liable for any business-related obligations. If your business fails to pay a supplier, defaults on a debt or loses a lawsuit, the creditor could legally come after your house or other possessions.

With a limited liability company structure, it’s different. As the name suggests, the liability of the business is limited to the assets owned by the business, not you personally (though there may be exceptions in some circumstances).

BFC accountants can explain the legal business structures available and help you choose the one that best suits you.

Cloud accounting can be defined as completing standard accounting tasks. For example: balancing and managing books, utilizing software available on a server or an application, and deploying as-a-service model. The entire administration, users with special access and accountants are all able to manage accounts payable, accounts receivable, etc. within the application. Cloud accounting software operates via a cloud provider. They are not on a local hard drive or server. This means the user can access all tools and plugins needed via the internet. This also means accountants can be anywhere in the world and still complete tasks without being in the geographic location as the business or client.

As of February 2022, nearly 85% of companies in U.S & Canada used cloud software for accounting and streamlining their finances. Only few businesses do not feel the need to advantage of cloud accounting technology. But as all new technology, with time, sometimes in under 5 years, it becomes the new standard.

The history of Cloud Accounting

In the late 1970s, technology application developers released the first-ever accounting software. This drastically became the change in how accountants do their jobs. Digital tools that run on computers replaced paper ledgers and basic tools that helped bookkeepers crunch numbers.

Accounting software has been taking a big leap forward, moving from desktop software to cloud-based accounting systems. Just like any cloud software, these big leaps gave businesses immense flexibility while helping reduce capital expenditures, and maximizing human resources.

Clear advantages have been shown for cloud accounting over previous approaches, which is critical for the success of all organizations. It makes sense why it has become a fast-growing solution to accounting and finance.

Cloud Accounting vs. In-house Accounting: What’s the Difference?

The early systems were available only on-premises or in-house. This means they ran on the company’s accounting team’s hard drives, on a hard drive in a server that is owned and maintained by the company. For anyone who wants to use the software, a computer is needed with the proper software installed on it and/ or in close proximity of the server. Since the information was all stored locally, and not on the cloud, it was vulnerable and could be lost or damaged.

Although in-house accounting software offered significant benefits over manual solutions, like paper records, these tools couldn’t match the adaptability or versatility of cloud applications. For instance, the business was liable for overhauling the product, which could be a costly and tedious exercise. This is a critical distinction software-as-a-service (SaaS) systems, a widely used cloud tool where the product supplier deals with all upkeep and overhauls and clients pay a yearly permitting expense.

It’s worth noting that SaaS is only one kind of cloud accounting tool. Using a multi-tenant SaaS cloud accounting application, different organizations share a similar framework on the public cloud. Organizations may likewise utilize the private cloud, meaning they have servers devoted to their software instance. There are also hybrid models that use both the public and private cloud. It’s worth noting that these private clouds and hybrid deployment models present the company/ user with more responsibilities and not the provider.

How Does Cloud Accounting Work?

When it comes to cloud accounting, accountants, administrators, and chief financial officers utilize login credentials to access the system via a web browser.  Any computer like a laptop, smartphone or tablet can be used for this. Sometimes the cloud provider may also have a mobile application (app) option to aid better user experience for tablets and phones.

How much is CPP and EI for 2022?

The maximum contribution to the CPP by both the employer and employee for the current year will be $3,499.80 each.

What is the payroll tax rate in Canada?

The contribution rate increased from 5.45% in 2021 to 5.70% this year – 2022 – due to the CPP Enhancement which has been implemented since January 1, 2019.

What are deductions in pay in Canada?

As well as withholding income tax, Canadian employers must also deduct Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums and any applicable provincial employer taxes (source deductions).

From the manual data entry to submitting tax forms and payments, your employees may spend countless hours or sometimes days.

Across Barrie, Ontario Baffilk Financial Consulting offers payroll services to businesses of all sizes. Whether you are a small, medium, or large business, having happy employees is essential for your business’ growth and success. In order to have happy and hard-working employees, you need to make sure that you are paying them both accurately and on-time.

The payroll services at BFC Professional Accountants ensure that your employees are consistently compensated for their hard work. Our bookkeeping and accounting specialists make sure that you are paying them on time and that you are paying the right amount of taxes and deductibles on each check. Accurate pay statements are important to your employees, but also for your business’ taxes and overall financial success.

If you don’t have a payroll specialist at your business, consider outsourcing your payroll services to BFC Professional Accountants. Benefit from payroll that is tailored to the needs of your business and employees. With us, you can count on:

• Reliable payroll
• Increased efficiency
• Reduced risks
• Reduced administrative duties
• Year-end preparation and help

Benefits of Payroll services

Our BFC Professional Accountant knows just what it takes to simplify the payroll process for our clients. We can use cloud-based accounting software to store your data safely in a remote server allowing us to automatically reconcile accounts and simplify the entire process. Using the right software, we are able to keep track of important details such as the employee hours, pay staff automatically or schedule payments in order to ensure deadlines are met. We use just the right software to simplify the process of changing employee’s personal data. Furthermore, our accountant can carry out tax calculations fast and avoid manual processes that are prone to errors by using the right software. Because we avoid manual processes when handling our clients’ payroll activities, we reduce errors significantly helping your business to save more money.

There’s too much to consider when handling payroll work. First, you have to ensure the pay periods and deadlines are met and taxation guidelines followed to the latter. Failure to do this could attract numerous penalties which cost the business so much money. Additionally, because this work involves a lot of data entry, it’s always prone to errors. Manual data entry will always be more prone to errors as well as tax issues. You may end up overpaying or underpaying your employees which could result in serious compensation claims. You can avoid all this by hiring BFC Professional Accountants to offer income tax preparation Barrie.

Why you should hire an accountant for Payroll services

Payroll is a lengthy process if you are new to it or have many employees. We know that as a business owner, you have several talents and expertise that go towards growing your business. We encourage you to focus on your strengths and let us focus on your payroll services.

Our advanced payroll managing software enables us to stay on top of changing tax laws and regulations. We have years of experience serving many companies and industries. We can give you advice on proper compensation for your employees based on industry standards and location.

We specialize in payroll accounting, and that is why we have invested in some of the most reliable software systems on the market today. Your employee’s details will be stored securely and confidentially. Our software also securely maintains records, pay slips, and employee contracts which will be made readily available to you.

A paycheck is simply an employee’s wage – deductions and allowances. A deduction is an amount that is subtracted from a wage such as a replacement entry card. Whereas an allowance is an amount added to the wage for work-related expenses such as gas money and uniform expenses. However, both deductions and allowance have expenses that can be taxable and non-taxable, making the process difficult for someone unfamiliar with the current tax code.

Rest assured, our payroll experts will easily be able to differentiate between the two. With us, the paychecks will always be accurate.

Payroll services saves you time and money

In order to save you time and money, we consider the needs of your business when offering our payroll services. Your business may need to run bi-weekly, semi-monthly or monthly. We’ll choose an efficient solution to save you money. You may have more salaried employees compared to part-time employees which require changes when running services. If you have a high staff turnover, your work becomes more complicated. We’re here to make things easier for you by providing a customized tax services in Barrie. Get in touch with us for more.

When you outsource your payroll to us among other accounting services, we are able to handle all your financial information and provide all the required services in our office. For most of our clients to whom we are offering our accounting services, it’s easy to handle their service because we already have their financial information and data. We use online software allowing you to check your data whenever you need to. We even offer our clients simple training to understand how they can review their data in new and useful ways.