Author: Mallory Raber

Maximizing Tax Deductions: Good Bookkeeping Can Save You Money

Are you tired of paying too much in taxes every year? One way to reduce your tax liability and save money is by maximizing your tax deductions. And the key to doing that is good bookkeeping.

Proper bookkeeping practices can help you keep accurate financial records, identify all of the tax deductions you are eligible for, and ensure that you are taking advantage of them to the fullest extent possible. Here are some ways that good bookkeeping can help you maximize tax deductions and save money.

Keep Accurate Records:  Good bookkeeping starts with keeping accurate and up-to-date financial records. This means keeping track of all income and expenses, organizing receipts and invoices, and reconciling accounts regularly. Accurate records can help you identify deductible expenses and provide documentation to support your deductions in case of an audit. Keeping accurate financial records enables individuals and businesses to manage their finances effectively. Accurate records help you track your income and expenses, monitor your cash flow, and make informed financial decisions. Without accurate records, it can be challenging to know how much money you’re making or spending and where it’s going. If you don’t keep accurate records, you may miss recording certain expenses and this will result with you not getting a tax deduction for them. This can be a costly mistake since nobody once to overpay taxes. By knowing that your financial records are accurate and up-to-date, you can have confidence in your financial decisions and avoid the stress and uncertainty that comes with disorganized or incomplete records. Ultimately, you get peace of mind.

Identify Deductible Expenses:  There are many expenses that can be deducted from your taxable income, including business travel, office supplies, equipment, and even home office expenses. By keeping track of your expenses, you can identify all of the eligible deductions and ensure that you are claiming them on your tax return. In addition, when you keep track of your expenses, you are able to see where you are spending money. This helps you budget and forecast your expenditures. The result is you know whether you are spending too much or too little. By adequately categorizing your expenses, you will better manage your finances and gain insight on saving money.

Understand Deductions vs. Credits:  When you pay for goods and services, you pay GST on purchases. Proper bookkeeping will ensure you claim all your deductions and, most importantly, your GST tax credits. GST is 100% refundable, so you don’t want to miss categorizing those amounts.

Business Growth: Bookkeeping plays a vital role in the growth and success of a business. By keeping accurate financial records, businesses can gain insights into their financial health and make informed decisions about future investments and growth strategies. Here are some ways that bookkeeping can help businesses grow:

1. Identifying Profitability: By keeping track of all income and expenses, businesses can determine which products or services are most profitable. This information can be used to make informed pricing, marketing, and product development decisions.
2. Budgeting and Planning: Accurate financial records can help businesses develop budgets and financial plans for the future. By analyzing past financial performance, companies can forecast future revenue and expenses and identify areas where they can reduce costs or increase revenue.
3. Managing Cash Flow: Cash flow is essential to the success of any business. By keeping accurate records, companies can monitor their cash flow and ensure they have enough funds to cover expenses and invest in growth opportunities.
4. Securing Financing: Lenders and investors typically require proof of a business’s financial stability and growth potential when seeking financing or investment. Accurate financial records can provide this proof and help companies to secure the funding they need to grow.
5. Compliance: Compliance with state and federal laws and regulations is essential to the long-term success of a business. By keeping accurate financial records, companies can ensure that they are compliant with tax laws, labor laws, and other regulations.

Avoid Common Mistakes:  When claiming deductions, mistakes can be costly. That’s why it’s essential to avoid common mistakes and ensure that your deductions are accurate and supported by documentation. Here are some common mistakes to avoid:

1. Mixing Personal and Business Expenses: One of the most common mistakes businesses make is mixing personal and business expenses. It’s essential to keep personal expenses separate from business expenses and only claim deductions for expenses directly related to your business.
2. Claiming Non-Deductible Expenses: Another mistake to avoid is deducting expenses that are not directly related to your business. For example, if you work from home, you may be tempted to deduct your entire home mortgage payment or rent as a business expense. However, only the portion of your home used exclusively for your business is deductible.
3. Failing to Keep Accurate Records: Accurate record-keeping is critical when claiming deductions. If you don’t keep accurate records, you may miss out on deductions you’re entitled to or risk an audit by the Canada Revenue Agency (CRA).
4. Not Seeking Professional Help: Finally, failing to seek professional help can be a costly mistake. A tax professional can help you identify deductible expenses and ensure that your deductions are accurate and supported by documentation.

In conclusion, good bookkeeping is essential for maximizing tax deductions and saving money on your taxes. By keeping accurate records, identifying deductible expenses, understanding deductions vs. credits, maximizing deductions, and avoiding common mistakes, you can reduce your tax liability and keep more of your hard-earned money. So don’t neglect your bookkeeping – it could be costing you more than you think.

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Since the start of 2022, construction costs have jumped by just over 8%. This increase contributes to the 33% increase in costs since the pandemic’s start. 

For construction businesses, these rapid changes are forcing reevaluations of how they run their business and especially how they manage their cash flow. 

A successful business demands a strong cash flow so as prices continue to rise, it’s essential you make it a priority. 

You can do this by identifying where problems begin and how those problems connect back to cash flow. 

This article will cover common problems in the construction industry and how prioritizing cash flow will help solve them. 

Common Problems in the Construction Industry (and How to Prioritize Cash Flow to Solve Them) 

Mismanaging Payroll

Payroll is a large portion of construction costs, often making up 20-40% of the total job cost according to The Construction Labor Market Analyzer. 

This means you have to have a significant amount of cash on hand to cover the labor costs as paying your workers should be a top priority for your business. 

However, many businesses run into trouble in this area because they don’t collect payments from clients until after the project is finished. This means they are required to dip into cash reserves to pay their employees and if they don’t have the proper amount of cash set aside, they can’t pay.  

How to Prioritize Cash Flow in this Situation: 

To avoid this problem, prioritize your cash flow by: 

• Collecting a down payment and/or progress payments for your projects.
  • Collecting a down payment will give you the flexibility you need to pay your labor costs throughout the project. 
  • Collecting progress payments ensures a steady inflow of cash throughout the project, again giving you the flexibility to pay your workers as you go. 
• Work with subcontractors
  • Many construction businesses outsource their labor because they don’t have to pay the labor costs throughout the project. Instead, it’s typically one lump payment after the job is complete. This means you won’t be paying for labor until after you’ve collected the full payment from the client. 

Change Order Inaccuracies 

Change orders are common in the construction industry. However, many businesses fail to create a sound process for managing them, which often leads to cash flow problems. 

In one scenario, the change to the project requires more work than what the client is paying. 

In another scenario, the cost of additional supplies isn’t properly accounted for. 

How to Prioritize Cash Flow in This Situation: 

To avoid this problem, prioritize cash flow by solidifying your change order process.

First, you need to verify that the change makes logical sense for your business i.e. are you still profitable? 

If the answer is no, you’ll need to rework the contract to ensure the change is still positively impacting your cash flow. 

If yes, then the key is efficiency. When a change is made, make sure you are quickly managing and processing the change order so you can resume work as normal and continue building your cash flow.

Mishandling Progress Payments

Most good job contracts will include progress payments. These are great tools to help you prioritize your cash flow, however, they can also lead to problems if:

• You’re falling behind on work
• You’re not allocating the cash properly as it comes in 
• You’re not collecting them on time

How to Prioritize Cash Flow in This Situation: 

To avoid this problem, prioritize cash flow by:

• Staying as close to “on track” as you can during the project
  • Many clients won’t make their progress payments unless your work is on track. If you’re not holding up your end of the deal you can’t expect them to hold up theirs. 
• Planning out how you want to use the cash 
  • Know exactly how and what you plan to use each progress payment for. Keep your cash flow in mind as you do this by timing expenses when they make the most sense for your cash reserves and completing the project. 
• Creating clear payment schedules and terms
  • Make sure you’re clients are aware of when progress payments are due and the repercussions of missing or falling behind on payments. 
  • Also, provide payment methods that the client prefers. 

Prioritize Cash Flow with the Help of a Trusted Accountant

Prioritizing cash flow can be challenging in the construction industry. Many factors play a role in creating and maintaining a strong cash flow. 

This means that as problems arise, like the inability to pay for labor, unprofitable change orders, and unaccounted-for progress payments, a focus on cash flow is often the solution. 

If you’re struggling to prioritize your cash flow or simply want better guidance on how to improve it, turn to Argento CPA.

We are experienced in the trades industry and can help you implement the systems and strategies needed to build a healthy cash flow and a successful business. 
Contact us today to learn more!

The construction industry presents plenty of opportunities for accounting mistakes. Many of these mistakes can be costly. 

Here are six of the most common accounting mistakes in the construction industry and why you must avoid them. 

1. Completing Undocumented Work 

Oftentimes, when a project gets underway, additional work is added or the original plan for the project changes. What was documented at the beginning of the project often ends up not being an accurate representation of the work you actually did. 

When these changes happen, it’s essential to follow proper documentation procedures. If you don’t write down the changes and report new pricing negotiations it often results in:

• Less profit 
• No profit
• A loss

The solution: Create a stronger process for mid-project changes. In this process, make sure your contractor has time to figure out the new price, document the changes, and send the info to the right person for invoicing. 

2. Inaccurate Job Costing 

There are a lot of different ways inaccuracies can present themselves in job costing. As you can imagine, mistakes in this area can affect profitability. Let’s take a look at some common job costing mistakes:

A. Not Knowing How Much Things Cost

It’s easy to try to estimate how much a project will cost along with the cost of equipment and labor. While your estimate may be close, even the slightest variation can lead to a loss of profit or cause you to miss out on jobs because of inaccurate bids. 

The solution: Turn to your income statement to review expenses. Ensure everything is accounted for and then create a detailed method for calculating costs for each project.

B. Misallocating Costs

Creating an accurate budget for projects can be complex. However, you should be able to account for each cost on every project. 

You’ll need to account for variable costs (costs that fluctuate, like in material and labor) and fixed costs (costs that never change, like rent, admin staff, and office expenses). When you factor in both types of costs, you’ll be ensuring you aren’t leaving profit on the table. 

The solution: Run through your financial processes and complete a detailed review. Before every project, make sure you are properly allocating your costs. Try allocating a percentage of your fixed overhead to your calculations so that you are taking everything into account. 

C. Fixed Costs in Bids

Another common practice for contractors is to include fixed costs in their job contracts. This can be a costly mistake. 

The market for materials and other expenses fluctuates quickly and when your costs are fixed in your bids, you could end up losing money. 

The solution: Remove fixed cost language from your bids and instead use language that will allow you to adjust the cost based on the market.

3. Cash Flow Mismanagement 

Cash flow mismanagement is a mistake in any business model but especially in the construction industry. 

In many cases, the business is required to cover the cost of the job until the project is completed. This leads to a negative cash flow for long periods of time. If your business doesn’t have the cash on hand to cover the job costs and other expenses, you won’t be around for very long. 

The solution: Ask for deposits on projects or negotiate vendor contracts to reflect an easier payment schedule for your business. This will ensure you have cash on hand to cover expenses.

4. Misunderstanding Joint Ventures

Working with other businesses can be a great way to bring value to your clients. However, they take a great deal of management on the accounting side and if you and the other business are not on the same page, it can lead to errors. 

The solution: Be clear on your expectations and how you plan to handle the accounting side of your agreement. Don’t forget to document all activities as well. 

5. Accepting Unprofitable Change Orders

Change orders can be great for business, but in some cases, they can be a costly mistake. 

Accepting unprofitable change orders is often a result of not fully understanding the scope of work before making changes on a project. 

Similarly to mistake #1, this leads to:

• Less profit
• No profit 
• A loss 

The Solution: Before you start any work, make sure your change order is fully processed and approved. This will ensure profitability for every change order. 

6. Not Working with an Experienced Accountant

Costly accounting mistakes are frequently made in the construction industry. In nearly every case, the negative results could’ve been avoided with the proper systems and processes in place.

The Solution: Work with an accountant with experience in the construction industry. They are well-versed in the procedures required to run a successful construction business and can help you put them into place to ensure profitability and success. 

They also know the best third-party applications to help your business’s finances run smoothly. 
If your construction business is ready to stop making these common accounting mistakes, contact Argento CPA. We will help you automate your processes and use real-time data so you can scale your construction business and avoid costly mistakes!

For those in a trade business, it is critical to have all of your business systems working at their best. 

Are they strong and compatible with each other? Are they helping you reach your business goals? Do you understand the processes and feel confident in their functionality?

Or are they competing against each other and leaving you frustrated with a lack of results? 

Now is a great time to take a closer look at some of the business systems you have in place to ensure they are built to help your company grow.

Automate Wherever You Can

Technology can handle just about all of the tasks you need it to do through automation. The more you turn over your manual task to a computer, the better off you’ll be. 

Automation gives you more time to focus on your operations and minimize frustrations along the way. 

Nearly every area of your finances can be automated, this includes:

• Job costings
• Bill collecting
• Internal communication
• Centralizing receipts and invoices
• Payment processing
• Bookkeeping
• Project management
• Profitability analysis
• Creating bids and change orders
• Financial forecasting
• Business planning
• Payroll management

Each of your business systems is able to operate more efficiently and accurately when they are automated like this. It eliminates the risk of human error and ensures timely completion. 

Automation also leads to better data and reporting, allowing you to make better business decisions.

Tools for the trade

Here are a few tools we (Argento CPA) recommend for trade businesses. They all work well together and offer industry-specific benefits. 

Knowify: This is a great place for trade businesses to start as you can then integrate most everything else into Knowify for easy management. It is designed for the trade industry and includes financial management, project management, invoicing, and much more.

QuickBooks Online: A must-have for most companies, this tech tool helps you with auto-tracking of your expenses and your income. It can also sync all of your transactions automatically. It will help you to create real-time reports and bi-directionally syncs to Knowify.

Wagepoint: For Canadian companies, Wagepoint is the go-to in payroll tools. It can help you with managing your employees’ benefits and sick pay, too.

Dext: This is a super easy tool to use for capturing your receipts. It can pull all necessary data into your logs for them as well.

Stripe: For those that need a tool to accept and send payments, Stripe is a go-to option that works for most needs.

Plooto: This technology solution automates your business’s accounts receivable and payable, pulling that information right from QuickBooks.

Keep Your Team in the Loop

As you begin to make these changes, know that it is always important to keep your team in the loop. 

If you are reworking existing systems or you are adding new tools, be sure your team is up to date on what is happening. You may need to provide training where necessary to ensure they can do their job at the best level possible. 

Keep in mind that your systems can only be as successful as the people who are managing them. Be sure to set them up for success.

Simplify Your Processes

Work to simplify any processes possible. The more complex your processes are, the more time there is for your employees to wait around for the information they need. 

Consider a total reboot. Look at each system and process you are using right now. Find out how you can make adjustments to see significant improvements in operations. When you do this, it lets you get the most out of your technology and makes things easier on your staff.

Carve out Time to Check-In on Your Business Systems

Get in the habit of regularly managing your systems. That is especially necessary for your finance systems. Be sure your data is still being tracked promptly and accurately and you are getting reports that help you manage your business. Look for any bottlenecks to work on. When you find them, see these as an opportunity to make improvements.

Make it a habit to do this type of check-in for your business systems. Doing so helps to make sure you have a pulse on your finance functions at all times and gives you insight into what is happening throughout your business.

Work with an Accounting Partner Experienced in Building Business Systems and Streamlining Finance Functions

Building your business systems and streamlining your finance functions is one of the best ways to improve efficiency and set your business on the right track for growth. 

Identifying which ones will work best and implementing them into your existing processes is the toughest part. For assistance, consider reaching out to Argento CPA. We are experienced in building business systems and streamlining finance functions for trade businesses. Contact us today to learn how we can help!

Every growing trade business needs the support of financial pros, and you’ve likely weighed the options of outsourcing CFO services or having a CFO in-house. 

Outsourcing can be a smart alternative to hiring in-house, especially for successful companies that are not of the size or complexity that requires a full-time CFO.

There are pros and cons to outsourcing CFO services that usually come down to properly fulfilling the business’ needs. We will cover both to help your trade business determine the option that works best for you.

Pros of Outsourcing CFO Services

Strategize Long-Term Goals and Why You Want to Achieve Them

While trade business owners, like yourself, are busy managing the day-to-day operations of their business, it can be easy for long-term planning to slip through the cracks. 

However, identifying your own personal, top priorities, allows you to then build a business that will help you reach your goals and serve as a representation of your core values. 

An outsourced CFO can help. They are planners that don’t just look at current financial statements but guide business owners to identify where they want their business to be in several years and then refine that vision. 

Once a complete picture exists, a CFO will use the numbers and help craft a vision of how to get there. 

The result is that you’ve then extended your financial, business, and personal goals; and as a result, can realign the present to get yourself to where you want to be.

Break Down Stretch Goals into Short-Term Action Plans

Breaking down your long-term goals into short-term action plans is essential for aligning the present and the future. You’ll start with your long-term or 10-year goal and work backward by crafting a 5-year, 3-year, 1-year, and finally 90-day goal. Because these 90-day goals are derived from your long-term goals, each time you accomplish a task, you’ll be one step closer to getting your business where you want it to be. 

As you can see, getting to this point requires a lot of planning and strategizing. This is where an outsourced CFO can really push you to reach your goals. They will collaborate with you to build 90-day goals, with your numbers in mind, that are relevant and achievable. Their financial expertise will elevate your business to the next level.

A Trusted Numbers-Savvy Advisor

In order to reach your short- and long-term goals, you need to have a strong understanding of your numbers. You’ll need to track the right metrics, run and derive essential information from your reports, and spend time making sure everything is accurate. This can take time, the time you need to actually run your trade business.  

This is where an outsourced CFO will be beneficial, they’re number pros who will get to know your financial condition, analyzes what the numbers say, and present the information to you so you can make the right decisions. 

You’ll be able to focus on your business and personal goals while they manage your finances.

Cons of Outsourcing CFO Services

Less Control

If you like to be hands-on in all aspects of your business, outsourcing CFO services might not be the best option for you. 

An outsourced CFO handles all of the finances so that business owners don’t have to. If your goal is to do more than check in to ensure you’re on track, an outsourced CFO is not for you.

You Could Find an Outsourced CFO that Lacks Experience in Your Industry

Trade businesses are unique. Cash flow demands look different, job costing is among one of the many essential and unique metrics to track, and compensating employees can be far more complicated – just to name a few financial tasks specific to the trade industry.

For these reasons, it’s essential you find an outsourced CFO that specializes in trades. They can set you up with the right tech stack, ensure you’re tracking the right metrics, and craft goals and strategies that are specific to your industry. 

If you don’t work with an industry-specific outsourced CFO, you won’t be leveraging your finances to their full potential. 

There Can Be a Disconnect

An outsourced CFO needs to understand you and your business. Communication is key, without it, your business could suffer. 

When you work with an outsourced CFO it’s a two-way street. Your decision-making has to be complementary to their high-level financial analysis, and vice versa. 

If communication isn’t where it needs to be, it can prevent your business from reaching its goals.

Outsourcing CFO Services is Easy with Argento CPA

An outsourced CFO can be the best thing that ever happens to your business or just another challenge to overcome. Argento CPA specializes in trade businesses, like electrical, plumbing, and HVAC, and understands the needs of its clients. 

We will work with you to avoid industry-specific issues and help you discover and set the right goals. 

We act as a partner to your business, ensuring your numbers are handled and you are confident in where your business stands financially. If you are interested in adding Argento CPA as a trusted member of your team, visit our website to learn more about our outsourced CFO services and business coaching!

Running a trade business can be hectic, but accounting technology makes it easier. 

It removes the need for manual entry, cutting out the tedious tasks that take away from the time you need to manage your business. 

Accounting technology also gives you the ability to see exactly where you stand in all areas of your business including:

• The strength of your cash flow
• Total job costing
• Profitability through a profitability analysis
• The current state of each of your projects
• And more

With the right third-party applications, you can build a tech stack that works together to manage your finances and provide you with all of the accurate details you need to grow your trade business. 

Accounting Technology Stacks Organize Automation

The idea behind a tech stack is to automate as much of your accounting system as possible while ensuring each tool integrates with the others. This streamlines information and limits the need for manual work. 

Currently, there are tools to eliminate nearly every corner of your accounting system, including:

• Job costings
• Bill collecting
• Internal communication
• Centralizing receipts and invoices
• Payment processing
• Bookkeeping
• Project management
• Profitability analysis
• Creating bids and change orders
• Financial forecasting
• Business planning
• Payroll management

As previously mentioned, what’s most important is that all of these tools work together. If not, you’ll have to transfer information from tool to tool, making it more of a hassle and time-consuming process than expected.

The Benefits of a Well-Built Accounting Technology Stack

When utilizing a tech stack that’s working properly together, you’ll see a number of key benefits:

• Work from anywhere. There’s no limit to accessing information in the cloud through this type of technology setup.
• Save time. Put more time toward tasks you need to personally handle since there’s no manual data entry needed.
• Ensure accurate data input since the human factor is eliminated (everyone makes mistakes sometimes!)
• Easy reporting and viewing of data. At any time, you can see who owes you money, what you owe suppliers and other critical information needed for balancing cash flow, forecasting, and planning within your company.

Argento CPA’s Ideal Accounting Technology Stack

Here’s what we believe makes the perfect tech stack for trade businesses:

Knowify

Start here. Everything else you do integrates into Knowify (or QuickBooks which also integrates with Knowify). 

It’s built for the trade industry, which means every component is valuable. More so, it’s easy to use with a streamlined dashboard. 

The job costing feature is one of its most useful tools. It lets you see how you are doing financially on every project at any time. It also includes project management, invoicing software, and a CRM built specifically for trade businesses.

QuickBooks Online

QuickBooks and Knowify bi-directionally sync, which is incredibly important in a tech stack for trade businesses. It allows for the auto-tracking of your expenses and your income. 

QuickBooks syncs all of your accounts automatically, organizes your transactions, and allows you to see valuable reports in real-time. It’s a fundamental tool in an automated accounting system.

Wagepoint

Wagepoint is important for Canadian businesses. It knows Canadian payroll rules for each province and does an excellent job of automating tax and source deductions. 

With Wagepoint, you can: 

• Track your employees’ sick pay and vacation days
• File ROEs electronically
• Track your employees’ benefits
• Set up direct deposit
• Automatically pay for taxes on the day they are done
• And more.

Dext

Instead of manually entering them, Dext allows you to capture your receipts quickly and easily. It pulls all of their necessary data and logs it into your system. Then, it saves your data and sorts it based on what you need and don’t need. Dext also integrates with Knowify.

Stripe

If you don’t already have an account, Stripe is one of the best tools available for accepting and sending payments. It works well with Knowify and is competitive in terms of features and pricing.

Plooto

One of the best accounting components to your tech stack is this. Plooto automates the entire accounts receivable and payable for your business. It pulls the information directly from QuickBooks. 

Plooto helps you make payments, match those payments to invoices, and then mark them as paid. You can also see your accounts payable owning each day as it provides live updates. Plooto also creates an audit trail to streamline record keeping.

Everything Connects with Accounting Technology

Each of these tools is necessary when relying on a solid tech stack to run your accounting system. 

One of the greatest benefits of this particular tech stack is that they each work together without redundancy. This ensures you have everything you need, all in one place.

Ready to Build the Ideal Accounting Technology Stack for Your Trade Business?

If you are ready to grow your trade business, you need a comprehensive tech stack to manage your accounting. With this insight, you can make better decisions and automate many of the tasks you have to do daily. The right tech stack is critical to streamlining processes, saving time, and improving efficiency.Let Argento help you put together a tech stack that drives growth. Contact us today to learn more!

What can your trade business gain by automating bookkeeping? The answer is: a lot. 

If you’re still manually managing your books you’re likely seeing plenty of errors, losing your own and your employees’ valuable time, and working with numbers that are several entries behind. 

These can pose as major roadblocks for any growing business. 

Instead of moving two steps forward with every move, manual bookkeeping takes you two steps forward and one step back. It gets the job done but lacks the accuracy and efficiency needed to grow a business. 

Automating your bookkeeping eliminates these setbacks and offers plenty of additional benefits. 

What Does it Mean to Automate Your Bookkeeping?

When you automate your bookkeeping, all of your data is collected for you, meaning you no longer have to make manual entries. It allows you to easily see your transactions, keeping them readily available when you need them. 

There are a number of tools you can use to automate your bookkeeping, however, at Argento CPA, we rely on QuickBooks Online. It checks all of the boxes for strong bookkeeping automation. QBO is easy for any size business and provides the big picture view that’s needed to grow. 

It also integrates well with a variety of other tools (Knowify, Wagepoint, Dext, Stripe, Plooto, and more). For trade businesses, the combination of Knowify and QBO can do wonders for your financial system. They sync together bi-directionally so that both systems are working off the same data, eliminating the need to duplicate entries that show up in both QBO and Knowify. 

When you automate your bookkeeping with QBO (or another tool) and combine it with the right tech stack, you’ll unlock growth potential. 

Automating Bookkeeping Saves Time and Improves Profitability

An automated system can not only do bookkeeping tasks faster and more accurately than people; it can also do them at a lower cost. You’ll no longer see costly mistakes that drain your time and money. Automation will improve profitability in this way. 

Digging deeper into the profitability benefits of automating your bookkeeping: you’ll have more time to invest in your employees. This opportunity presents itself when you take repetitive manual bookkeeping tasks off your/their job descriptions and use the extra time to improve other skills.

Doing your bookkeeping manually is error-prone, costly and a waste of the time and talents of people who could be doing something more productive. 

An automated bookkeeping system is a leverage tool that increases the value of every hour your staff spends at work.

Potentially one of the greatest benefits of automation is accurate job costing. You know better than anyone that insight into exactly what a job costs and how much you make from each job is essential for growth in your industry. Automation allows you to see these numbers in real-time so you know exactly where profit lies on each job. 

Automating Bookkeeping Provides Financial Visibility

A well-automated bookkeeping system does more than simply take over manual tasks. It provides additional functionality, and reporting is one of the most effective areas in which it does so. 

There’s no doubt your manual system produces useful reports, but often it’s not easy to get new, up-to-date information. That would take a ton of sorting through existing data and manipulating it to build new reports.

An effective automated solution contains a flexible reporting interface. Usually, there’s a dashboard where you can see the financial status at a glance, and you can dig deeper right from the interface. 

This is useful for budgeting and forecasting future business performance – two essentials for a growing business. 

Automating Bookkeeping Leads to Better Decision-Making

It’s easy to get so caught up in day-to-day operations that you don’t step back a take the big view of where your company could be going. 

An automated bookkeeping system helps you do just that with clear, error-free, and well-kept books. 

As we mentioned, budgeting is one of the primary places you’ll see improvements with the help of automation. Because all of your expenses will be tracked in real-time, you can be confident you have accurate data to serve as a foundation to build your budget. 

However, the benefits extend far beyond budgeting. All of your financial reporting will be improved and will lead to stronger short and long-term planning.

Automating bookkeeping leads to effective decision-making that strives for and achieves company growth.

Automating Bookkeeping Prevents Burnout

You didn’t start your business with the thought of spending your working hours keeping your books straight. Your interest and expertise lie in delivering a service and delighting your customers. 

An automated bookkeeping system saves you from getting bogged down in work that isn’t enjoyable and doesn’t give you the time you need to focus on what matters most for your business.

It takes away the busy backend work that steals you and your employees’ time and offers confidence that your books are being managed without your constant hand. 

As your business grows, your time becomes more and more valuable and you need to be able to invest it in the right places – your employees and your customers. Automation makes this possible and lets your bookkeeping system work for you, rather than you working for it. 

Maximize Business Growth with the Help of an Experienced Accountant

Even if you’re convinced that an automated bookkeeping system will help you grow, you may not have the time or the expertise to choose the right solution, put it in place, and mine all of the value you can bring to your business. Additionally, if you fail to set up your apps like Quickbooks and Knowify correctly, it can lead to major issues in your books that become extremely difficult to fix in the long run. 

That’s why a trusted and experienced trade business accountant can be an invaluable aid to your business.

Argento CPA can not only show you how to automate your bookkeeping but also bring the advantages of automation to other aspects of your finances. With our help, your finances will be accurate and primed for growth. Why struggle with manual bookkeeping any longer? Contact us today to get started with growth-building automation.

Nobody likes filing or paying taxes, but when taken seriously, personal income tax considerations can save you money. 

Every year, you have to get ready for tax season, and it’s always hard to be certain you’ve thought of everything so you can proceed with confidence when you file with the CRA. 

It becomes especially complex if you’re an entrepreneur who has individual income from one or more of your business ventures.

What inflows am I required to report? What deductions and credits can I claim? Do I have everything I need to file? Should I be doing this on my own? 

With so many questions, it’s easy to lose confidence. 

Here are some tips for easing your mind as you pull your returns together.

Know What Deductions and Credits You Qualify For

You don’t have a legal or ethical obligation to pay any more taxes than you owe. 

To avoid overpaying the CRA, you need to take advantage of every deduction and credit you’re entitled to. Canada has plenty of them. 

There are tax breaks for:

• Medical expenses
• Child care
• Caregiving
• Spouses and dependents
• Disabilities
• Pensions and savings plans
• Home office expenses
• Etc. 

It’s good to look through the entire list and see what you’re eligible for. Knowing in advance gives you the opportunity to collect everything you need.

Don’t forget to claim any deductions or credits specific to your province or territory.

Find and Keep All of Your Receipts for Your Personal Income Tax

It’s not enough to say you’re eligible for deductions and credits. There’s a good chance you’ll be called on to prove it. That’s why it’s important to retain all of the receipts related to these expenses. 

Ideally, you collected them all during the previous year, but if you haven’t, you’ll have to gather them.

It’s likely some of your receipts are electronic and others are on paper. Copies of them should be organized into electronic or physical files by tax year. 

It makes the job easier if, within those folders, you further break them down by deduction or credit type.

Make Sure You’re Using the Right Forms for Your Personal Income Tax

Everybody has to file a T1, but there are other forms you may need to complete. The complexity goes up if you have entrepreneurial income. 

Specific requirements depend on where in Canada you live, what your business structure is, and what deductions and credits you plan to claim.

Before you get started, identify all the forms you need and make sure you have them handy. Tax season is easier if you don’t have to stop what you’re doing to go find a form.

Know Your Due Dates

Missing due dates is stressful and costly. Your taxes are already high enough without paying penalties and interest for filing late. 

The big deadline for most people is April 30 (May 2 in 2022 due to the weekend), but there’s also a deadline for self-employed filing. 

If you don’t have the money to pay the entire tax bill, file on time anyway and pay what you can. If you demonstrate that you’re serious about filing and paying, the CRA will work with you to make payment arrangements.

Also, don’t miss the quarterly deadlines for installments on next year’s taxes. This will lessen the blow come tax time.

Create a Tax Plan

If you followed a tax plan during the previous year, congratulations! You’re finding tax season easier to deal with than those folks who are scrambling to gather documentation. 

If you didn’t follow a plan, make a resolution to do so for the coming tax year.

One advantage of adhering to a plan is you’ll have a method for storing all your receipts as you receive them, and they will be ready for you when you file, which as we mentioned is important for claim credits and deductions. 

A bigger advantage: throughout the year, you can deliberately manage your spending to realize as many credits and deductions as possible. Many are available, you just have to be sure you are meeting the requirements, a tax plan will help you do that.

You may also be able to manage your income to your benefit. Also, part of your plan will be a task list, ensuring you never miss a due date.

Work with an Experienced Accountant

The best way to be confident about your personal income tax considerations (and to save money!) is to have a tax plan. 

However, it’s hard to know exactly what to include in your planning. You won’t have confidence if you’re not sure whether you’ve left something out.

That’s where an experienced accountant comes in. Argento CPA is experienced in personal income tax consideration. We know exactly what you need to do to maximize your savings and will work with you to put together a comprehensive plan to ease your mind and prepare you for tax season. We will help you make sense of your taxes so you can approach tax season with confidence. Contact us today to learn how we can help.

When filing taxes, saving money is always the goal, so personal tax considerations are essential to ensure you don’t overpay. 

While you should pay what you owe, you certainly don’t need to pay more than you have to. That’s no way to live your ideal lifestyle. 

Before you file, you may want to look into these personal tax considerations that can save you a lot on your taxes.

1. Look for Applicable Credits and Deductions

You likely apply for one or some credits and deductions, so be sure to look through and find what you qualify for. Missing a credit or deduction is like leaving money on the table. Let’s look at some tax filers often forget.

Home office deduction – You may be able to claim a home office deduction as an employee that could equal $2 per day or actual expenses you paid like costs related to the workspace, supplies, and specific phone expenses. The deduction is intended for those who worked from home in 2020, 2021, 2022 due to the pandemic, so even if this doesn’t sound like a deduction you’d claim in a normal year, you may qualify.

Moving expenses – You may qualify for the moving expense deduction if you are an employee or self-employed and moved to a new location inside or outside of Canada.

First-time buyer – Many first-time homebuyers will qualify for a $5000 non-refundable income tax credit if they live in the home as their new residence.

The Canada Caregiver Credit – If you support a dependent, common-law partner or spouse with a physical or mental disability, you may qualify for this credit, which in most cases will be $2,295. However, it could be higher if the person is an adult-dependent (not your spouse or partner).

Child care – You may be able to claim eligible childcare expenses deduction for children under 16 to reduce your taxable income.

Medical Expenses – Keep your medical receipts because you may be able to deduct medical practitioner payments, prescription drugs, certain medical devices, and the cost of insurance. To qualify the total expense must exceed 3% of your net income or be greater than $2,268.

2. Contribute to an RRSP

Investing in a Registered Retirement Savings Plan is an investment in a more secure financial future for you and your family. Up to the limit for the year, (18% of earned income up to $27,830 for 2021), you can deduct contributions from your taxable income to pay fewer taxes. Personal tax considerations like this can save you a lot of money.

You don’t have to pay taxes until the money is withdrawn, therefore lowering what you pay now, and getting tax-free growth to get the most out of retirement savings. 

Grow your money between now and retirement and feel confident you can retire comfortably.

3. Transfer Tax Credit to Your Spouse

In some cases, if your spouse (or common law) has less tax obligation than credit, they can transfer the credit to you. Some examples include

• Age amount if your partner is 65 or older
• Canada caregiver for a sick child
• Pension income
• Tuition, education, and textbook amount

4. Look into Your Capital Cost Allowance

Capital Cost Allowance (CCA) applies to depreciable property, furniture, and equipment used for business. 

These types of property provide value over an extended period of time so you can deduct these costs over several years. If you qualify, the depreciated amount you claim lowers your taxable income.

5. Write Off Losses

You can write off certain losses for the year, such as

• Non-paying customer
• A capital loss
• Theft losses
• Unpaid rent
• Business investment losses.

However, you have to be careful with this and there are plenty of regulations to follow. 

6. Pay Your Family

This is among the personal tax considerations that can save you big if you run a business. As a family, you are likely to share expenses and responsibilities. You can also share income to lower the tax bracket of the higher earner if you do it the right way. This is also known as income splitting.

Salaries paid out are considered a deduction, so paying your family members can help you save. You can pay this out in the form of dividends or as a salary for work performed.

However, you need to make sure you are within reasonable limits – meaning $250,000 for an administrative role is unrealistic. You also must have documentation to show your spouse or child actually works for the business.

7. Keep Good Records and Pay on Time

These are the two easiest ways to save on your taxes. You’ll need receipts and proof when you go to take advantage of the other personal tax considerations. 

Paying on time keeps you away from unwanted fees.

Get the Most Out of Personal Tax Considerations

Paying taxes is an essential civil duty, but you shouldn’t have to pay more than you owe. 

It’s up to you to assess personal tax considerations and save yourself as much as possible without triggering any red flags. 

While the tax considerations above are a good start, there are certainly more things to consider. An experienced accountant, like Argento CPA, can guide you through this process and ensure you are checking all of the money-saving boxes. Contact us today to get started!

NFT taxes are at the forefront of anyone’s thoughts if they are investing and profiting from Non-Fungible Tokens (NFTs). 

However, because NFTs are a relatively new innovation, understanding how to pay taxes on these digital assets can be confusing.

Tax laws surrounding them are constantly changing, making it difficult to keep up. This is why it’s important to learn the basics surrounding NFTs and the Canadian tax code. 

Here are a few pointers to get you started: 

Why It’s Important To Track Your NFTs And Calculate Your Gains Accurately

If you’re interested in buying and selling NFTs as a way to earn money, it’s important that you track your gains accurately. 

Why is that? 

Because, like anything else you earn money on, profiting from NFTs results in income, which of course means paying taxes. Imagine buying some stock, having the price go up, selling that stock, then not tracking your profit. 

How would you file your taxes? You couldn’t, which would get you into some legal difficulties. 

NFTs are the same as any investment, if you are making money expect to pay your taxes. This means you need to track your purchases and sales so you have an accurate picture of what’s going on.

Proper tracking is also key for setting aside the right amount of money for covering your tax bill. Because successful NFTs have huge taxable gains, traders often underestimate how much they should put aside for their tax bill. 

This underestimation leaves the trader low on cash and unable to pay, forcing them to have to sell their remaining NFTs (or other assets prematurely). Working with a CPA is one way to get around this as they understand how much you will owe, so you can set aside enough cash. 

Additionally, it’s important to track your NFTs sooner rather than later — ideally from the start.

The more you trade, the more difficult it becomes to go back and find out what happened. For this reason, you should create a system that helps you to track as you go. This will help you avoid gaps when tax season arrives and ensure you are not paying more than you should be. 

Are NFTs Taxed As Business Income Or Investment Income?

There are no clear-cut rules for determining whether or not your NFTs will be taxed as business income or investment income. However, in most cases, it will be considered business income only if: 

• You are a day trader
• You run a crypto business

If you do not fall under any of these categories, it will likely be taxed as investment income. 

Should you decide to sell an NFT, receive more than $10,000, and choose to deposit it into your bank account, the CRA will have questions. This scrutiny is why you need to ensure you are properly tracking and recording each of your crypto sales.

If discrepancies are found, then you’ll end up owing what you should have paid in taxes plus penalties, and you may run into other legal issues as well. The point is, it’s not worth risking the consequences by not reporting your crypto gains.

Because crypto is viewed as a commodity by the CRA, it’s taxed as either income or capital gains depending on your situation. 

How do you know which way you’ll be taxed? 

It’s hard to say, there are some guidelines, but generally, the CRA decides on a case-by-case basis how you’ll be taxed. 

Some of the factors that come into play are, you conduct crypto activities for commercial purposes, you are trading with the intention of making a profit, you make regular or repetitive transactions, or you are promoting a product or service. 

If any of these apply to you, then you’ll probably be taxed as a business. Because of the uncertainty of the situation, it’s important to keep accurate records so you can be ready if CRA has any questions.

NFT taxes are also influenced by the manner in which you are profiting from NFTs. 

If you are buying and selling them, then you have a better chance of being charged a capital gains tax. But if you are creating the NFT and selling it, you’ll probably be paying business taxes. The good news about paying business taxes is you can usually reduce the amount of taxes you owe if you can show expenses involved in the creation of your NFT.

What Are Taxable Events?

While buying crypto or NFTs with dollars isn’t considered a taxable event, buying crypto or an NFT with another form of crypto is. 

You will also be taxed when you sell crypto or an NFT for a profit. You don’t have to pay taxes on the entire amount you sell your asset for, you only have to pay taxes on the profit, also known as the capital gain.

How A Qualified CPA Can Help

Are you feeling more than a little confused by NFT taxes? 

Turn a qualified CPA who has become an expert on NFTs to guide you through the process. In addition to helping you audit-proof your records, they’ll show you how to track NFT gains/losses and advise you on how much to set aside for taxes.

Given how new NFTs are, if you’re investing in them, or creating them, it’s best to trust a professional to help you to deal with any of the taxes you will end up paying.

The professionals at Argento CPA understand both how NFTs work and how these assets work with the Canadian tax code. If you want to confidently track and pay taxes on NFT gains, contact us today.