Finding the Right Bookkeeping Solutions in Canada
It is not easy managing a business, especially a small business. One may think this to be a contradictory statement but it’s true. Small business owners have their hands full and usually operate with limited resources. They may be good at their core business operations but dealing with the paperwork may not be their cup of tea. There are a lot of daily invoices to keep track of as well as diligent record-keeping of the components of the balance sheet such as short-term debts and liabilities. Although doing business in Canada is not too complicated, one cannot escape the grind of keeping financial documents in place and ensuring tax filings are in order. If you have an established business set up in Vancouver or anywhere in Canada for that matter, you would need the services of a knowledgeable and efficient Vancouver bookkeeping service provider that categorizes your account-related paperwork in time and helps you file your T1 or T2 tax returns in time.
Since small and medium businesses are often bound by resource constraints, they may not be able to afford a dedicated accounts team to handle all their financials. In such a case, it’s crucial to hire a bookkeeping service that handles all this work for them otherwise it could result in an immense headache for the owners when there’s last-minute scrambling for the relevant documents. The financial management has to be even precise if you are expanding your business and construction projects are going on in your business premises. One has to take the separate construction accounting records into consideration and integrate it with the overall accounts.
What is bookkeeping and why do you need it?
Bookkeeping means the process of recording your company’s financial transactions in an organized manner every day. This is important as you would need accurate and timely financial data to assess your business needs and performance. The daily financial data can be compiled into reports that help you keep a tab on your business and address any problems. You can be prepared during tax audits and not scramble for documents.
Bookkeeping is of two different types depending upon the size of the business and entry volumes. These are:
- Single-entry bookkeeping: This is most suitable for small firms and sole proprietorships that have limited assets and handle small inventories. As these units don’t buy or sell on credit, a single entry is made on the account book to record each transaction. The transactions shed light on the revenue and expenses of the firm.
- Double-entry bookkeeping: This method is used in the case of large businesses that operate on the credit system or when the inventory handled is large. It is called double-entry because each transaction is recorded in two different accounts as debit and credit respectively. The purpose is to balance the financial data as each debited transaction should match its equivalent credit transaction. The double-entry method makes provisions for errors.
Bookkeeping service saves you time and money
Business owners could do all the bookkeeping entries by themselves as these are fairly simpler and do not really involve complex jargon. However, it is not feasible as the process is time-consuming and entrepreneurs have to deal with clients and associated business activities which leaves them little time to handle accounts diligently. There are multiple entries to be recorded in the ledger such as invoice receipts, accounts payable, accounts receivable, sales returns, etc. If you have a construction project going on in your business premises, then you have to make separate entries like raw materials, labor, overhead expenses, and so on. In such a scenario it is advisable to hire a custom bookkeeping service that takes care of all your needs including construction accounting.
- Streamlined service: A bookkeeping service provider would make sure that all your financials are streamlined and their team would collect all relevant financial documents from your office at the beginning of the month and then categorize the entries in relevant columns according to standard practice based on the guidelines of the financial authority. They’ll check your books multiple times and prepare all the necessary reports like Profit and Loss, Balance sheet, as well as revenue forecasts. This saves you from the drudgery of bureaucratic work and gives you a bird’s eye view of the company’s performance.
- Timely tax return filing: Canadian tax laws are classified into two major groups – T1 and T2. The former is called the General Income Tax and Benefit Return and has to be filed by salaried individuals. The T2 form on the other hand is for the corporate tax return. One has to furnish details like profit and loss reports, gross and net income along with balance refunds of the previous taxation year. A bookkeeping service makes sure that all the important details are presented in time so that you don’t have to face last-minute jitters.
Businesses especially small and medium ones, have a lot on their plate and don’t often have enough resources to cover their accounting needs. Bookkeeping is an essential part of the business because only when you keep a record of all the day-to-day financial details, you can check the progress of your business and be free of tax worries. There are capable Vancouver bookkeeping services in the city that can take care of all your account-related needs so that you can focus on growing your business.