The Traveling Entrepreneur

As a small business owner, you may occasionally need to take a business trip or send your employees on one. While you shouldn’t travel frivolously, you also shouldn’t hesitate to travel in cases where it may benefit your business. This includes conferences and conventions, meeting with prospective clients, attending out-of-town training sessions or networking events, and similar types of activities. As you plan these trips, keep the following tips in mind.

Strategies for Saving

If you travel relatively infrequently, use travel websites such as Travelocity or Flight Centre to help you find deals. If you travel on a regular basis, join a loyalty rewards program for frequent travelers. For example, instead of taking a different airline each time you fly, take the same airline and reap frequent flyer miles. Similarly, always try to stay at the same hotel chain and use its loyalty rewards program. This approach saves you time – you don’t have to look for new airlines or accommodations for each trip. In some cases, you may spend more on each individual journey than you would have if you took the time to find a great deal. However, the overall savings you earn through the rewards programs helps to smooth out the difference. Also explore other strategies for saving money, such as shopping for meals at local grocery stores instead of eating in restaurants or having employees share hotel rooms instead of having their own rooms.

Tax Write-Off

The Canada Revenue Agency allows you to claim a business deduction for the cost of business-related travel. In particular, you may write off 100% of public transportation fares and hotel accommodations, but you may only write off 50% of the cost of food or entertainment. Similarly, if you pay for your employees to travel, you may deduct the same expenses on your tax return. In addition, if you travel to a convention, you may write off the convention fees up to twice per year. If you require your employees to travel and cover their own expenses, they may write off these expenses on their personal income tax returns using Form T777. However, you must fill out a Form T2200 stating that you require your employee to incur these costs as part of their jobs.

Tracking Expenses

To make these claims on your tax return, you need to have records and receipts of your expenses. Whether you are travelling on your own or sending your employees out into the world, consider utilizing an expense-tracking app. Depending on the app you select, you may be able to take a picture of receipts, track mileage with GPS, upload receipts, or perform other functions that make it easy to organize your travel expenses. Choose an app with the features that meet your specific needs. For example, if you want employees to pitch travel ideas and submit purchase order requests, you need an app that can facilitate that. Similarly, if you want to track travel spending, look for an app that can generate those types of reports.

If you need help deciding which app will suit you and your company needs best, let us know and we will arrange a free consultation!

Time Keeping

Keeping track of your time sounds easy but what if you are handling two jobs at once? What if you are handling only one and you have 2 staff on board? What if you have more than one and each staff have several as well?? On top of that, what if you have to travel to different locations or your staff have to travel…? There are so many different situations that having a stopwatch sometimes just won’t do.

Time to check out TSheets! This amazing time keeping app is seamlessly integrated with QBO, it can be used from anywhere on any device (even has a GPS tracker on mobile devices!!) and gives you access to real-time business data with accurate, detailed reports to better understand your company’s biggest expense: labor.

It’s essentially effortless and very accurate providing you peace of mind and money in your pocket saving you time from manual entries and fixing mistakes.

Features:

Get real-time reports, customize company settings, and manage employee timesheets in one place. Then track, edit, and submit time from the TSheets web dashboard or the TSheets Chrome app.

Employees and admins can use the TSheets mobile time tracking app to capture, submit, and approve time from their smartphones. Push notifications remind employees to clock in and out, and mobile scheduling makes it easy to update and share employee schedules.

TSheets Time Clock Kiosk is a simple way for employees to clock in from one device. A cost-effective alternative to traditional punch clocks, TSheets Time Clock works on any computer or tablet with an internet connection, is biometric, and is optimized for quick clock in.

Save time by tracking it and knowing where it all goes in order to manage it better!

First Year in Business

Here are 10 things to keep in mind when your journeying through your first year in business:

1. Set Your Business Up Properly

Use the right set of tools to launch your business in today’s expanding and changing economy. That means the right app’s for procedures, the right software, registrations, licensing/permits, the right business bank account and cards, the right accounting system and support and a lot of patience. Just like a major painting of the whole house - preparation is key. It may seem to take longer than you think and at some points may seem not useful but trust me, your future self and your business will thank you.

2. Organize For Success

Begin your journey with the right information to move yourself forward with your business venture. The biggest mistake people make is spending all their time working in the business rather than on the business. Budget your time and money for a proper business plan, marketing, accounting, operating systems, management, IT and data security.

3. Cash Flow 101

Monies coming in; monies going out. Know how to evaluate your cash flow situation so that you too can be aware of your cash needs. check out our cash flow blog post for more info!

4. Your Best Business Partner – Your Accountant

The knowledge and expertise of an accountant will help you take those first successful steps in business. Contact us for a free consultation where we will discuss how we can help you set up and manage the accounting portion of your business.

5. Setting Up Payroll

Payroll is complex. It is more than just income tax calculations. Understanding how to pay your staff will save you time and money.

6. Invoicing

Are you billing or invoicing your customers? Expand your awareness of how invoicing affects you and your business. Invoicing seems simple enough but its actually a crucial step that needs to be done right the first time and every time. If you don’t do a good job invoicing, you could seriously damage your small business’s cash flow, which in turn could seriously damage your new small business’s chance of success.

7. Prepare for your Income Tax

Learn what is considered an acceptable tax deduction and leave the shoebox of receipts at home. We can help you set up a system that will leave you with nothing to do once income tax time comes!!

8. Prepare for Year-End Ahead of Time

Year end is stressful enough. Make the job easier on you and your staff by learning how to prepare for your year end. We can show you how!

9. Helping to Audit-Proof Your Business

Audits go wrong when you misrepresent your income or your expenses. Learn how to protect you and your business from a potential audit.

10. Dealing With the CRA

Revenue Canada is a vast conglomerate made up of many departments. Learn how to maneuver your way around the CRA today.

For a more in depth look at any of these points, visit the Quickbooks article!

Are you afraid of money?

It’s not just the fact that taxes were due over a week ago and you haven’t gotten all your ducks in a row… It’s more that you don’t even know how many ducks you have and where they are! Do you worry about money and how much you have and if you will make it through the next month? This is not right and it absolutely should not be this way…

Well, According to Money Coaches Canada; The good news is that you’re not alone. Many people have a crippling fear of finances, and it’s no wonder:

Every time something catastrophic happened in life, one of the first thoughts you probably had was how you were going to pay for it. You might even have felt that devastating feeling: the sinking realization that you can’t afford the crisis at hand.

That can make you want to keep as much distance between you and your finances as possible.

There’s just one problem: That’s the wrong move.

This Fear Gets Better When You Face It

When you avoid your financial situation, it can only get worse. You can’t solve a problem if you don’t understand what the problem is in the first place.

The closer you look at your money, the more you’ll realize it’s not a terrifying force that’s out to crush you, controlling your life. Money behaves in very predictable ways. It can be managed and understood. It’s not a monster with a mind of its own; it’s more like a household pet.

Here are 3 Steps to take provided by Money Coaches Canada:

Step #1: No Judgment

Wherever you are is where you are. It’s likely that one of the reasons you’re so afraid of money is that you’re embarrassed or ashamed about where you think you might be right now. You might be in a less-than-ideal place, and you think that’s a dirty little secret you should hide. You feel that people are going to be judgmental.

Here’s the truth: No one needs to know about your financial situation but you.

You can keep this information entirely to yourself and never tell a soul.

You’ll still know where you are, money-wise, whether you tell others or not. And when you know where you are, you can start to move forward to where you want to be.

Step #2: Know the Truth (the Whole Truth)

It’s tempting to guess at how much debt you have and call it a day. It’s close enough, right?

If you do this, the problem is that you’ll always know that the number is maybe not quite what you thought it was. You’ll worry that it’s worse than you thought. You’ll still be hiding from the truth.

We want to face that fear, not run from it. That’s the only way to stop fearing money in the first place.

Start by writing down the number that’s in your checking and savings accounts right now. If you have investments, write down the totals in those accounts as well. If you own a house, include the equity you’ve paid on the house. Tally all of those numbers up into one big number.

These are your Assets.

Then go through and check the balance on all of your credit cards, and write those totals down in a separate column. Got a mortgage? A car loan? Student or personal loans? Put down those numbers as well, along with the interest rate you’re paying on each loan or debt.

Tally up those numbers. These are your Liabilities.

Now take a deep breath, and subtract your Liabilities from your Assets.

That’s where you are with your money right now.

Step #3: You Can Do This

The number you’ve arrived at may worry you. If you’ve been scared of looking at your finances for a long time, it’s very likely that where you are with your money is in the negative. It may even be a pretty sizeable negative number.

That’s okay.

That’s okay because now you know – and knowing where you are is always better than not knowing.

You have something to work with. You can turn that number from a negative into a positive. You can do this with your own attention and care and ingenuity. And you can do it for yourself – to make it possible for you to enjoy even more of the things you truly want in your life.

Money Coaches Canada has created the Money Map Coaching Program, and this special, interactive program is entirely dedicated to YOU and your financial success.  You’ll learn about managing your money in a way that completely takes away all your fears and sets you on a confident path to success. Check out the program: Money Map Coaching Program! Do not miss out on the opportunity that will impact the rest of your life.

Entrepreneurship at any age

A New Year, A New You!! Do what you love. It’s NEVER too late!

We hope you are enjoying the very beginning of 2019 already! Check out this inspirational 15min video on how Paul Tasner went from being fired to entrepreneur at the age of 66. Entrepreneurship comes at any age!

Christmas is right around the corner!

It’s time to spend and make special memories with the ones we love. One thing you may not want to do over the holidays is call your accountant. Don’t worry, we’re not offended! However, businesses still buy and sell, file their HST and pay their workers so entrepreneurship never really goes silent. But, things slow down and we find ourselves (hopefully you have finished all your holiday shopping and preparations by now!) with some extra spare minutes.

The following suggestions will not take too long but will make a big impact and you won’t have to think about them for the rest of the year!

1. RRSP’s: Call your bank or go online and starting in January, set up a regular monthly contribution, by automatic transfer. Making automatic monthly contributions (amounts are different for each individual) allows you to forget about making the payments. You may not even notice them coming out of the bank!

2. Emergency Records: You don’t often think about it, or want to think about it but it does happen. Fires, floods, an death or illness… If any of this would happen, would you or your loved ones know where all your accounts were, who you were insured with, what credit cards you have available? And the account numbers for all of these? Heres what to do:

   • Go through your filing drawer.

   • Photocopy the latest statement/ renewal for each account/ policy you hold, or grab an old one if the account details haven’t changed.

   • Photocopy your passport, driver’s licence, OHIP and SIN card.

   • Repeat for each household member.

   • Put in a sealed envelope and write contact details for your executor, lawyer, and accountant on the front.

   • Give to someone you trust that doesn’t reside in the same location to keep safe.

   • You can also create a digital copy of all of the above and store in a password protected folder in the clouds and give the password to a few select people.

   • Do the same next year.

   Done!

3. As you know, the tax year ends on December 31 – for all individuals, and for many corporations too. All the big firms publish “Year-end guides for tax planning”, although many of them are broader tax planning documents, rather than what to do in December. These guides are worth reading at some point however they me be a little heaver of a read… Here are some pointers to get you started:

   • If you need to take money out of savings – say, to pay holiday bills – take it out of your Tax Free Savings Account (TFSA) in December. That way, you can put it back in 2019. If you wait to 2019 to withdraw, the headroom isn’t topped back up until 2020. [Flip side: Money taken out from RRSPs are taxable withdrawals. Push these withdrawals back to January, so they’re taxable in 2019.]

   • Review your debts. The interest paid on money used to earn business or generate investment income can be used as a tax deduction.

   • If you need to purchase a car or musical instrument for work, do so at the end of the year to enjoy the benefit of accelerated capital cost allowance claims.

   • Donate shares instead of cash. Not only do you get the charitable donation deduction, but by donating the shares you’re not subject to capital gains tax.

   • Check out this year-end tax planning checklist via pwc Canada.

From our family to yours, we would like to wish you all a very Merry Christmas and a Happy New Year!

Cash Flow

So what is cash flow anyways?

In short, cash flow is the money that is moving (or flowing) in and out of your business. But there is more to it than just that.

If you are in a “positive cash flow” situation then you are making more money than you are spending. You have enough to pay your bills etc. If more cash is going out than coming in, you are in danger of being overdrawn, and you will need to find money to cover your overdrafts. This is why new businesses typically need working capital (like a loan or line of credit) to cover shortages in cash flow.

Lack of cash is one of the biggest reasons small businesses fail.

A great video summarizing cash flow and a real world sample can be seen here, click below (thank you Investopedia!):

Cash Flow When Starting a Business 

Dealing with cash flow issues is most difficult when you are starting a business. You have many expenses and money is going out fast. And you may have no sales or customers who are paying you. You will need some other temporary sources of cash, like through a temporary line of credit to get you going and on to a positive cash flow situation. 

The best way to keep track of cash flow in your business is to run a cash flow report. We can do this for you! Click here to see more or ask us how. Sometimes cash flow reports need to be done on a weekly or even daily basis…

Cash Flow vs. Profit 

It's possible for your business to make a profit, but have no cash. How can that happen? The short answer is that profit is an accounting concept, while cash, is only the amount in the business checking account. You can have assets, like accounts receivable (money owed to you by customers) but if you can't collect on what's owed, you won't have cash. 

Your accounting system may also show a difference between cash and profits. If your business runs on accrual accounting, you recognize income when the invoice is sent, even though the customer hasn't paid. In this case, you might show a profit but not have the cash. 

Check out this Tip:

A tip from The Balance Small Business website;  A quick and easy way to perform a cash flow analysis is to compare the total unpaid purchases to the total sales due at the end of each month. If the total unpaid purchases are greater than the total sales due, you'll need to spend more cash than you receive in the next month, indicating a potential cash flow problem.

To dig deeper into this tip: 

1. At the end of this month, look at your total sales.

2. Add up the purchases you have made that still need to be paid for. 

3. The difference is what you will need to bring in as income to stay even. 

If this monthly cash shortage continues for several months, you'll get further and further behind. 

So how do I solve my cash flow issues?

There are several ways to tackle cash flow issues. Especially for a start up business, a budget is very important to understand how much you need and where you stand financially. at Cloud Accounting we have all the tools to work with you to create a budget, analyze the budget and also forecast the future budget so that you can have control over your finances all the time. Click Here to see more information on our services or contact us anytime to discuss further.

Looking to do more research on your own? The Balance Small Business site has a great article with more information on how to solve some cash flow issues!