Author: margento

TAXATION

Before choosing a date for your year end, think about the date that works best for your kind of business.

When entrepreneurs incorporate their businesses under their respective provincial articles of incorporation, often, little thought is given to the date for the fiscal year end. Many company founders unconsciously identify the company’s fiscal year end with the calendar year end of December 31, and therefore automatically select this date. After the articles of incorporation have been issued, the business may choose any date as year end provided the number of days of the fiscal year do not exceed 371. Conventional wisdom suggests, however, that the last day of the chosen month is the most practical date since most businesses and financial institutions process client data on a month-end basis. Setting the year end date at the end of your chosen month permits an easier cut-off and reconciliation process.

Factors to Consider

Inventory

If, for example, you are a retail business, physically counting inventory during your busiest sales period (i.e., Christmas) would disrupt business, so January 31 would be a good date for your year end. Inventory, as well as the level of in-store activity, will be at their lowest in January when your staff can count, price and value inventory without taking time away from selling. For a service industry such as landscaping, work-in-progress may have to be calculated. It may be best to have a year end such as November 30, after the bulk of the contracts are finished.

Choose a year-end date that works with your accounting cycle.

Accounting

Choosing an arbitrary year end such as December 31, which may not match your accounting cycle, could create issues for your in-house accounting staff as well as your CPA. Internal staff is often overwhelmed with completing year-end procedures for payroll, government reports, and finalizing year-end inventory, not to mention cut off of receivables and payables or budgeting for the coming year. Such stress can lead to errors, increased overtime and frustration.

Also, if your year end is December 31, your CPA may not be as available as you would like because they are consumed by tax planning and tax preparation for individuals and may be in no state of mind to work with staff that is already frustrated by their own year-end requirements. (This is not the best of formulas for getting quality time with your CPA to analyze your financial results.)

Start-up capital

When a business starts up, cash flow difficulties are common, given the need to borrow working capital for start-up costs and capital assets. If, by good fortune, the business does extremely well in its first year and substantial taxable income materializes, a year end set 365 days from the date of incorporation may be advisable. Since there is no requirement to pay monthly or quarterly instalments in the first year of operations, the business gets the maximum tax deferral by setting the first year end as late as possible. A later year end would lessen the actual cash outflow for corporate income tax and provide additional working capital in the start-up period.

The requirement to pay monthly or quarterly instalments begins in the second year, the payment amounts are determined by the taxable income reported in the first year. In case the first year end was shorter than 365 days, the taxable income is normalized to reflect the income had it been for the full 365 days. This may be helpful for seasonal businesses, to set a year end prior to the peak income period because that would not only defer the tax liability of the first year but also reduce the required instalments in the second year. This allows businesses to have more working capital during the start-up phase.

Tax Deferral

Choosing a year end of July or later allows tax deferral of corporate profits. Suppose, for a moment, that the corporate profit is $150,000. Rather than pay the corporate tax on the $150,000, management may decide to pay out the $150,000 in bonuses to various employees of the company. If the bonus is declared for the July 2016 year end but not paid until January of 2017, the income tax expense for the corporation is nil and the tax on the bonuses is not taxed in the hands of the recipient until it is paid in January of 2017. This approach provides working capital for the corporation that otherwise would have gone to the Canada Revenue Agency (CRA).

Changing Your Year End

Your business may have changed over the years so that now there are compelling reasons to change its current year end, such as staffing or administration issues that make it impossible to complete the year-end process in a timely fashion. If, for instance, your business now has a high sales volume or high inventory at the current year-end date, it might be less disruptive to end the year on another date. If you are a subsidiary or highly dependent on another business such as a supplier, there could be administrative and accounting advantages to aligning year ends.

A request to change the year end must be sent to the CRA. Changes can only be made for sound business reasons (i.e., not for the purpose of an income tax benefit). A request for a change is not required if:

• the corporation is wound up and the final return is filed with a shorter fiscal year
• the corporation is emigrating to another country, is becoming exempt from tax or will cease to be exempt from tax
• persons or a group of persons acquired control of the corporation under subsection 249(4) of the Income Tax Act.

Owner-managers should keep in mind that, if a change in year end is granted, it will be necessary to produce financial statements and tax returns for the shorter period. Further, depending upon your accounting system, there may be additional cost in establishing the new year-end protocols.

Check with Your CPA before Making a Change

Decisions about establishing a year end or changing a year end can be fraught with unforeseen income tax consequences for both the corporation and owner-managers if personal and corporate tax issues are not considered. Entrepreneurs should meet with their CPA to discuss tax consequences; seasoned owner-managers should consider meeting with their CPA if making a change to the business year-end seems to be more and more necessary.

Contact Argento CPA today!

Source: BUSINESS MATTERS

Disclaimer: BUSINESS MATTERS deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
BUSINESS MATTERS is prepared bimonthly by the Chartered Professional Accountants of Canada for the clients of its members.
Richard Fulcher, CPA, CA – Author; Patricia Adamson, M.A., M.I.St. – CPA Canada Editor.
Contact us: patricia@adamsonwriters.ca

TRADEMARKS

Protect your business by registering proprietary names as trademarks.

If you want to protect the unique name of your business, website or domain name, logo, product or service name, or company slogan, you may wish to apply for a trademark.

What Is a Trademark?

According to the Canadian Intellectual Property Office:

“A trademark is a combination of letters, words, sounds or designs that distinguishes one company’s goods or services from those of others in the marketplace. A trademark is unique. It is important to a company because over time, a trademark comes to stand not only for the actual goods and services you sell, but also for your company’s reputation and brand.”

There are three types of trademark registrations available to protect your business name:

• A logo trademark: protects the design element that identifies the goods or services of a business or an individual. For example, an apple with a bite out of it immediately brings Apple computers to mind. A logo is protected by its unique artistic and layout elements.
• If your business name: is important as an identifier to your product or service you can protect it by registering. If you do not register your name someone else can use it and force you to change your business name. If such were the case you would have to change everything in your business that contains the words registered by another party. There is no protection offered by placing a (™) beside the name.
• our Website domain name: can also be trademark registered. It should be noted that registering the domain name with an Internet registration authority does not provide any protection or right to use the domain name commercially in Canada.

Registration of a trademark can take 12 to 18 months.

Registration Takes Time

The registration process can take anywhere from 12 to 18 months. But, once you register your trademark, it:

• is irrefutable proof that the trademark belongs to you
• provides you with exclusive rights to use the trademark in Canada for 15 years
• provides comfort that others cannot use a similar confusing trademark
• allows monitoring of infringements by others
• allows you to license the trademark and provide a boost to your company brand
• should be noted that, if you need to protect your trademark in other countries, it will be necessary to register the trademark in each country in which you wish protection

Trademarks are good for 15 years in Canada. The Canadian Intellectual Property Office (the Canadian registry for trademarks) sends a notice when the 15-year period is about to expire. If the renewal application and payment are not received, the trademark is expunged. This means effectively that someone else could adopt your original logo.

Who Knew?

Interestingly, a trademarked name can become so entrenched in our culture that they become generic. For instance the following words are all trademarked but are used in our everyday conversations: Aspirin, Band-Aid, Jeep, Kleenex, Lycra, Popsicle, Taser, Vaseline, Velcro, Zipper.

It May Be Worth Your While

Because of the time, effort, expertise and cost required to register a trademark, owner-managers wishing to register a trademark should seek counsel. The Internet lists organizations willing to assist for a fee.

Contact Argento CPA today!

Source: BUSINESS MATTERS

Disclaimer: BUSINESS MATTERS deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
BUSINESS MATTERS is prepared bimonthly by the Chartered Professional Accountants of Canada for the clients of its members.
Richard Fulcher, CPA, CA – Author; Patricia Adamson, M.A., M.I.St. – CPA Canada Editor.
Contact us: patricia@adamsonwriters.ca

MANAGEMENT

Make time for strategic planning.

Strategic planning is not usually a strong suit of most entrepreneurs. They have a great initial idea and know how to turn it into a business. But then, they become too involved in day-to-day affairs and do not take the time to plan where they have to be in five, 10, or even 20 years to stay competitive. No one should start a business without a vision of what their company should be at some point in the future. Unfortunately for many businesses, the intermediate stages do not get planned, goals get forgotten in the details of everyday life, and suddenly the calendar reads 2036 instead of 2016.

There is no magic formula that will provide specific steps to achieve personal and business goals; each individual and each business has different needs and abilities that must be factored into the desired results. The starting point, however, is the same for everyone since there is a symbiotic relationship between a business and its owner.

Taking the First Step

First, determine your personal objectives and needs: current income requirements, retirement savings plans, the future for your spouse and children inside or outside the business, and the amount of personal vacation time you want. If personal goals are set too high, disappointment will stifle forward momentum; conversely, if goals are set too low, underachievement may stall growth.

Specific achievable targets are essential. Common quantifiable goals include sales volume, gross margin, profit before income taxes or debt repayment. Other goals that are quantifiable but may be somewhat subjective include attaining specific market share or increasing a client base.

Because most businesses are cyclical, it is essential to establish three-to-five-year goals that take into account how progress is going to be made in smaller periods, such as each quarter. Frequent reviews will monitor progress and allow any redefinition of the goals to meet the changing reality.

Make a CPA part of your team.

You Are Not Alone

You will not be able to achieve your business goals without considering your own abilities and shortcomings, future staffing needs, and any assistance from outside consultants to supplement missing skills. You will need inputs from all current staff members to determine whether existing equipment, hardware, software, physical location, transportation, financial services and communications can handle the future projections.

Objectivity is essential to good planning. A Chartered Professional Accountant (CPA) who understands your personal needs, your business, and the financial information required to produce meaningful projections should be part of your team. Not only will your CPA help map the future, but also will be able to support any application for external financing.

Who Are We?

Businesses often try to be everything to everyone. Thus, clients and customers become unsure of the ability of the business to support all the products they sell. As part of the planning process, it is essential to ask yourself:

• What business are we in?
• What business do we want to be in five years from now?
• What do we do best?
• Who are our main customers and what do we provide to them?
• What services or products provide the most return on investment of staff and production facilities?

Analysis of these five areas should show you where to concentrate your production and marketing energies. Such analysis will help define achievable goals and guide your planning for the next three to five years.

Projecting Costs

Once the goals have been determined, it is necessary to project costs and the need for funds. Such information includes:

• Production costs, either by unit or as a percentage of sales, include labour, material, transportation and amortization of equipment.
• Selling costs as a percentage of sales include marketing, advertising, entertainment and travel expenses.
• Administration costs generally include all costs not directly tied to production.

A good starting point for making three-to-five-year projections is a line-by-line review of financial results for the last three to five years. This will provide insight into annual sales, expenses, profit and taxes and show yearly changes in sales and costs as well as the ratio of costs to sales revenue. Management can use these ratios to predict the proportional contributory costs of many expense areas to the realization of projected sales. For example, if over the last five years advertising represented about 2% of sales, you could use this figure to estimate the cost of advertising needed to produce your sales projections.

Personal Time Matters

Success in business depends upon maintaining a balance between time spent in business and time spent satisfying personal needs. Therefore, when establishing goals, consider how your personal needs will impact your business and its long-term strategy.

Anticipating Change

You also need to consider the impact of changes such as a divorce or the loss of a key business associate or important customer. You must have a fallback plan and sufficient resources to navigate through the hard times.

Review both the short-term and long-term plans on a regular basis and adjust the expected outcomes to the new information. It is doubly important to review and update plans in the event of dramatic life changes or opportunities.

Let the Business Work for You

Time and resources are limited. Proper planning is the best method of ensuring the business is working for you rather than you working for the business.

 

Contact Argento CPA today!

Source: BUSINESS MATTERS

Disclaimer: BUSINESS MATTERS deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
BUSINESS MATTERS is prepared bimonthly by the Chartered Professional Accountants of Canada for the clients of its members.
Richard Fulcher, CPA, CA – Author; Patricia Adamson, M.A., M.I.St. – CPA Canada Editor.
Contact us: patricia@adamsonwriters.ca

TAXATATION

Complete, accurate and readable records will make a CRA audit less onerous.

Regardless of whether your business is a proprietorship, a partnership or an incorporated company, the Canada Revenue Agency (CRA) requires the business to maintain financial books and records. Here are a few of the CRA’s record-keeping requirements you should know.

Only in Canada, eh?

The CRA requires that records must be kept in Canada, either at your place of business or your residence. If your head office is in Canada and your books and records are stored electronically outside the country and accessed by your Canadian-based operation, these records are not considered to be maintained at your head office. Thus, if you are currently running cloud-based accounting software that is storing data in a foreign jurisdiction, your business is in violation of CRA requirements. If you wish to keep records in a jurisdiction other than Canada, you must seek written permission from CRA to keep them elsewhere.

Your Responsibility

Your business must assure the books and records are protected and available for inspection even if a third party is processing or storing the information. The third party must have adequate security and backup to be able to provide information when requested.

Records must be complete and unabridged.

Complete and Unabridged Records

Records must be complete and unabridged, have sufficient information to support your tax liability or claim to funds owing to you, be supported by documentation and be maintained in English or French, or a combination of both languages.

Electronically stored data must be readable by CRA software.

CRA Request

In the event the CRA requests information, it is your responsibility to:

• produce books and records (general ledger, accounts payable/receivable/payroll, etc.) requested, whether those records are in electronic form or hard copy: It is not your responsibility to provide data that is not requested. Thus, it is prudent to request written documentation outlining specific requirements for your particular business.
• ensure documents supporting the books and records are available: Mainly, the CRA would like to see original-source documents such as expense receipts, contracts, sales receipts, etc. With most businesses opting for electronic processing of sales invoices, taking pictures of expense invoices, or receiving images of suppliers’ invoices, hard-copy data is rapidly disappearing. Nevertheless, the transition to electronic copies does not diminish the responsibility to keep and be able to produce records upon request from the CRA.
• make sure your employees or the third-party record keeper is available when an audit or examination of records is required: Co-operation in accessing and providing information means the CRA will be in and out of your office quickly.
• allow the CRA to make copies of the data or provide copies to the agent as requested: Under normal circumstances, a business should not allow original-source documents to leave with a CRA agent.
• be able to decrypt encoded information in order to provide the data to the CRA: If you change service providers, ensure that all data is readable.

Factors to Consider

• If data is maintained on a remote server, whether inside or outside Canada, ensure original data can be downloaded to an in-house computer or to another server.
• If you use a cloud-based accounting service, make sure your business can download data in a user-friendly format. You should also consider whether you will be able to produce current data if you stop using your service provider or it goes out of business.
• Before upgrading or changing computers, ensure all data is backed up in at least two locations.
• Ensure software is available to open historical data.
• Store older computers with historical software and data.
• Keep a written record of all software and data access codes by year, device, software, and data base. Without such a record, you may not be able to access information five years from now.

Record Format

Original paper documentation must be kept in paper format unless it is converted to and stored in an accessible and readable electronic format. CRA guidelines suggest that microfiche and/or microfilm can be used as well; however, most businesses would probably opt for a high-speed scanner to store historic data. The CRA insists that any reproduction must provide the same detail as the original paper document without issues of “resolution, tonality or hue”.

Length of Storage Period

The CRA requires that all records and supporting documentation must be kept for six years from the end of the last tax year. The tax year is considered the fiscal year end for a corporation and the calendar year for an individual. This retention period is also required by the Employment Insurance Act, the Canada Pension Plan, and the Excise Tax Act (GST/HST).

Other Retention Issues

Documents concerning long-term acquisitions and disposal of property, the share registry, or other historical information that would have an effect on the sale, liquidation or wind‑up of the business must be maintained indefinitely. CRA may ask you to maintain records for longer periods. If an income tax return is filed late, the destruction date is six years from the date the return was filed.

In the event of an objection or appeal, all data must be maintained until the latest of the:

• a. date the objection or appeal is resolved
• b. date for filing further appeals has passed
• c. six-year record-keeping period has expired.

If you are a sole proprietor or in a partnership, records must be kept for six years after the end of the taxation year of ceasing business. If a company is dissolved, keep all records and supporting documents for two years after the date of dissolution.

Before You Destroy Records

Legal representatives of a deceased taxpayer should obtain a clearance certificate before they destroy records that show how property of the deceased was distributed.

When concerned about GST/HST issues, it is advisable to ask for and fill out form GST352 Application for Clearance Certificate. If you wish to destroy records before the mandatory retention period, complete form T137 Request for Destruction of Records or apply in writing to your local tax service office.

If you have made electronic copies of the original paper books of account and supporting documents and the CRA considers the images to be representative of the original documents, you can destroy the original paper documents.

Tax regulations suggest that destruction of records in advance of mandatory retention dates or before receiving official written permission may result in prosecution.

An Important Business Procedure

Records must be kept in a format and for the time period prescribed by the CRA and other regulatory bodies. Meeting regulations is an important business procedure that will ensure that any review of historical records by the CRA will be as effortless as a review of today’s information.

Contact Argento CPA today!

Source: BUSINESS MATTERS

Disclaimer: BUSINESS MATTERS deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
BUSINESS MATTERS is prepared bimonthly by the Chartered Professional Accountants of Canada for the clients of its members.
Richard Fulcher, CPA, CA – Author; Patricia Adamson, M.A., M.I.St. – CPA Canada Editor.
Contact us: patricia@adamsonwriters.ca

HEALTH AND SAFETY

Bad posture and overuse of smartphones and other devices can cause unexpected health problems.

A recent British study of smartphone use showed that young adults checked their smartphones 85 times a day and used them for a total of five hours of use per day. The long-term effects of such constant smartphone use are not yet known but, if current studies and reports by the medical profession are any indication of the future, it would be advisable for all users to consider the impact smartphones and similar devices can have on their health.

In the Short Term

Text neck: a neck strain resulting from hunching over smartphones, tablets, or laptops for prolonged periods. Stress on the neck and upper back muscles causes pain because the body is subjected to an unnatural position for extended periods of time.

Computer vision syndrome (CVS): eye strain resulting from constant staring at small text or from scrolling through articles, messages or tweets. Common symptoms are dry eyes, blurred vision, headaches, and dizziness.

Phantom pocket vibration syndrome (“ringxiety”): the belief that your smartphone is vibrating when it is not. Studies show that some individuals may experience increased anxiety levels when they go an extended period without receiving a notification.

Nomophobia: (“no-mobile-phone-phobia”) is a term coined to describe the anxiety of individuals to be without a smartphone. Sufferers obsessively check to ensure the smartphone is present and constantly worry about misplacing it.

A recent study in the U.K. determined that 66% of the user population may suffer from this “ailment.” Symptoms include increased anxiety, which can manifest as a variety of physical symptoms including headaches, intestinal troubles, and muscle tension.

In addition to the more obvious outward physical pains and strains, there might even be a hidden tax on your health.

The Long Game

Medical specialists have determined that the poor posture caused, in part, by use of smartphones may cause excessive wear on the cervical spine (the neck) which can result in permanent degenerative changes including arthritis. The neck is designed to support the weight of your head (10 to 12 pounds) in an upright posture. Bending your head forward to text or read can place up to 60 pounds of stress on your neck muscles. This excess strain on your cervical spine over the years can increase the risk of cervical degeneration.

In addition to the more obvious outward physical pains and strains, there might even be a hidden tax on your health; when individuals use a smartphone, they tend to slump forward and curl their shoulders in toward their chest, thus restricting lung capacity. This, in turn, reduces oxygen intake and forces the heart to work harder to get oxygen to the brain. A lifetime of poor posture can have a negative impact on your cardiovascular health.

Preventing Injury

The best way to ensure these potential symptoms do not affect you is to stop using these devices completely. Since this is not possible, given our increasing dependence on technology, experts suggest the following may relieve symptoms and prevent long-term problems:

• Reduce eye strain by using larger fonts. Hold the device at least 16 inches from your face. Look up and away from the screen frequently. Scroll by page and not by line. Blink to ensure your eyes stay moist.
• During your next visit to a physician, physiotherapist, or chiropractor, ask about neck exercises you can do during work to help alleviate neck strain.
• If your wrists and hands feel sore or weak, try flexing your wrists or pushing down on a flat surface to stretch your fingers. If pain persists, talk to your doctor or physiotherapist.
• Improve your posture by evaluating the ergonomic setup of your work or home office. You can find an online self-assessment tool from the Ontario Ministry of Labour at: www.labour.gov.on.ca/english/hs/pubs/comp_erg
• Take regular and frequent stretch breaks (every 15 minutes or so), following the stretching guidelines provided by your doctor or physiotherapist. If you are prone to forget, set a reminder on your phone, computer or personal fitness tracker.
• If you have any of the symptoms associated with nomophobia or phantom pocket vibration, consider placing your device in a location more difficult to access when you’re not using it and scheduling specific times to check and respond to messages. For more serious symptoms, consider seeking professional counselling.

Be Tech-Strain Aware

Communication devices have provided benefits beyond our wildest expectations. While those benefits cannot be denied, they have brought with them other unforeseen issues that may have a long-term impact on personal health and welfare. Recognition of these issues should lead management and staff to work to prevent future personal health issues and to maintain the productivity of the entire workforce.

Contact Argento CPA today!

Source: BUSINESS MATTERS

Disclaimer: BUSINESS MATTERS deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
BUSINESS MATTERS is prepared bimonthly by the Chartered Professional Accountants of Canada for the clients of its members.
Richard Fulcher, CPA, CA – Author; Patricia Adamson, M.A., M.I.St. – CPA Canada Editor.
Contact us: patricia@adamsonwriters.ca

TECHNOLOGY

Good low-cost printing is now available for small businesses.

Even though the amount of printing being done today is declining because so much data can be stored for instant retrieval on hard drives or the Cloud, every small business should still have a printer. Today’s multi-function printer (MFP) provides an owner-managed office with most of the capabilities offered by a printing company but at a starting price of about $1,300 for colour and between $500 and $600 for black and white.

If you are considering replacing the old printer or cancelling your lease contract, consider the features now offered on printers that support both Mac and Windows operating systems and are not much bigger than a microwave oven.

Features

Most MFPs have the following features:

• colour and black and white capability
• ability to print on various media of varying size and weight as well as labels and vinyl
• LCD touch screens
• ability to print from a USB and to scan to the USB
• ability to scan and send to a personal computer
• ability to print forms stored on a website
• ability to scan on a flatbed scanner
• automatic feeders allowing scanning of multiple documents as well as duplexing pages to cut back on paper costs
• preview ability on the control panel allowing you to print only the pages needed
• ability to join your wireless network (WiFi) and print right from your smartphone or tablet. (You may need to purchase this option separately.)
• Ethernet ready (Check to be sure in case there are wireless communication issues within your environment.)
• memory in off-the-shelf units: 512 MB or 1 GB, with expansion to 3 GB or more (more memory allows the printer to handle larger or more complex documents, such as images)
• duty cycles up to 150,000 pages per month and eliminating the replacement of costly imaging components
• rated to print from a low of 700 pages a month to 25,000 pages a month
• printing speed for most printers in the range of 40 ppm in colour mode and 50 ppm or greater for mono
• starting to print within five seconds if “on” and within 20 seconds if “sleeping”
• resolution to 2400×1200 dpi if finer detail or richer colour saturation is required.

A monthly warranty can cost as little as popcorn and a movie.

Low-Priced Warranty Package

Up to now, small businesses could never afford a printer that offered all these features. Most small businesses leased a printer and paid a per-page charge for warranty and service. State-of-the-art MFPs from reputable manufacturers carry at least a one-year guarantee and offer extended onsite warranty packages from two to five years for a monthly cost equivalent of popcorn and a movie.

Contact Argento CPA today!

Source: BUSINESS MATTERS

Disclaimer: BUSINESS MATTERS deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
BUSINESS MATTERS is prepared bimonthly by the Chartered Professional Accountants of Canada for the clients of its members.
Richard Fulcher, CPA, CA – Author; Patricia Adamson, M.A., M.I.St. – CPA Canada Editor.
Contact us: patricia@adamsonwriters.ca

TAXATION

The new Liberal government has proposed a few minor changes to personal income taxes for 2016 and beyond.

The election of a new government in Ottawa is often accompanied by changes to the way income is taxed. The last federal election was no exception. The changes announced in the March 2016 budget that will impact many taxpayers are as follows:

Family Tax Cut

Spousal income splitting was eliminated. In the past, one spouse or common-law partner could transfer as much as $50,000 of taxable income to the other to save up to $2,000 in income taxes. This option will no longer be available.

Child Tax Benefit

Taxpayers with children are familiar with the Canada Child Benefit (CCB) tax-free monthly payment and the taxable Universal Child Care Benefit (UCCB) that were designed to assist parents with the cost of raising children under the age of 18.

The new budget proposes that the CCB will provide as much as $6,400 per child under the age of six and $5,400 for children from six to 17. As can be expected, the benefits will not apply equally to all income categories. Levels of payout will be adjusted for those whose family income is between $30,000 and $65,000 and those who earn in excess of $65,000. If family income exceeds $200,000, there will be no benefits.

Indications are that the CCB will not be taxable and will not be included in certain federal income-test programs such as the Registered Disability Savings Program (RDSP). The new structure will be based upon the adjusted net family income for the 2015 tax year. Because the amount of the benefit will be tied to family income, benefits will be reduced as income rises.

Labour-Sponsored Venture Capital

Up to now, the federal government has permitted the creation of labour-sponsored venture capital corporations (LSVCCs) at both the federal and provincial levels. Prior to 2015, individuals purchasing $5,000 worth of shares in such corporations each year received a 15% federal tax credit. The credit was reduced to 10% in 2015. The federal government proposes to restore the credit to 15% for provincially registered LSVCCs for 2016 and thereafter but will reduce the credit to 5% for federally sponsored LSVCCs in 2016, then eliminate it. This is part of the federal government’s plan to close the federal part of the program altogether.

Education

Post-secondary

Individuals attending post-secondary educational institutions could previously claim tuition fees plus an education and textbook amount based upon the number of part-time or full-time months of attendance at a qualified institution. For 2016, the federal education and textbook amounts will be eliminated. The tuition fee amount will remain intact.

Teacher tax benefit

There are teachers and early childhood educators who may spend their own money on classroom supplies. To offset these out-of-pocket expenses, a new Teacher and Early Childhood Educator School Supply Tax Benefit will be introduced. A licensed and certified teacher can now purchase up to $1,000 worth of school supplies each year and receive a tax credit of 15% that should provide a tax savings of up to $150 each year.

Tax Free Savings Account

The tax free savings account will be reduced from $10,000 per annum to $5,500 for the 2016 tax year. In that the 2015 tax budget increased the former limit of $5,500 to $10,000, it is assumed the taxpayer will not be penalized for taking advantage of the $10,000 limit when tax planning in the start-up months before the March 2015 budget.

Home Buyers’ Plan

The Home Buyers’ Plan (HBP) allows first-time home buyers to withdraw up to $25,000 from their RRSP to purchase or build a home without having to pay tax on the withdrawal. The current plan required the amount to be repaid over a 15 year period. The government will now allow taxpayers faced with significant life changes (e.g., job relocation, death of a spouse, marital breakup or the requirement to house an elderly family member) to borrow from the RRSP without tax penalty.

Employer EI premiums are waived for young hires.

EI Break

The budget proposes to waive the Employment Insurance (EI) premium for 12 months for companies that hire individuals between the ages of 18 to 24 if they are hired into a permanent position in the years 2015 to 2018 inclusive. A minor reduction of the EI rate after the first year of hiring is contemplated as well.

Small Business

The previous government planned to reduce the small business tax rate from 11% in 2015 to 9% by 2019. The 2016 reduction to 10.5% is frozen with no further reductions planned.

67 to 65

The former Conservative government raised the age of eligibility to collect Old Age Security (OAS) from 65 to 67 starting in 2023. The new rules of the Liberal government will return the age of eligibility to 65. This age drop applies equally to the Guaranteed Income Supplement. Both programs will be adjusted to a new Seniors Price Index to reflect the actual rising cost of goods and services.

Personal Tax

Tax cuts are always welcome. If all goes as planned, middle income individuals (i.e., those earning between $45,283 and $90,563 per annum) will have their tax bracket lowered. This table provides the tax bracket as well as a comparison of 2015 and anticipated 2016 federal tax rates.

Automobiles

The automobile allowance rate for the 2016 taxation year is 54 cents per kilometre for the first 5,000 kilometres driven, and 48 cents per kilometre after that. Add four cents per kilometre in the Northwest Territories, Yukon, and Nunavut. This is a reduction of one cent per kilometre.

The following amounts are unchanged:

• capital cost for vehicles: $30,000 plus applicable taxes
• leasing rate for vehicles: $800 per month plus applicable taxes
• monthly interest deduction: $300 per month
• taxable benefits associated with employer-owned or employer-leased vehicle available to employees.

The personal portion of automobile operating expenses paid by employers for 2016 is reduced from 27 to 26 cents/kilometre. If the taxpayer is selling or leasing vehicles as a mainstay of employment, the rate will be reduced to 23 cents/kilometre. These personal portions are taxable.

Little Changed in 2016

Changes to the tax system for individuals will not have a significant impact on the take-home pay for the average taxpayer and will not, for most, change the information required for preparation of the 2016 personal income tax returns.

Contact Argento CPA today!

Source: BUSINESS MATTERS

Disclaimer: BUSINESS MATTERS deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
BUSINESS MATTERS is prepared bimonthly by the Chartered Professional Accountants of Canada for the clients of its members.
Richard Fulcher, CPA, CA – Author; Patricia Adamson, M.A., M.I.St. – CPA Canada Editor.
Contact us: patricia@adamsonwriters.ca

TECHNOLOGY

These apps may help you optimize your work when you are mobile.

TeamViewer

Two similar and occasionally underrated tools for business are remote control of other devices and screen sharing. Screen sharing is a critical tool, not just for one-way meetings and presentations, but also for interactive collaboration among colleagues in different locations. Remote control is useful not only for troubleshooting and technical support, but also as a convenient way of using multiple separate computers or devices from a single workstation, regardless of where the computers are physically located.

In the screen-sharing camp, tools such as GotoMeeting, join.me and Skype for Business are also popular. For remote control, in addition to built-in or bundled options such as Windows Remote Desktop, Chrome Remote Desktop, and Mac OS X Screen Sharing, more feature-rich or cross-platform tools are also available, such as various VNC-based tools like RealVNC.

TeamViewer includes both functions, and supports a wide range of platforms, including Windows, Mac OS X, Linux and Chrome OS on the desktop, and Android, iOS, Windows and BlackBerry on mobile. This app is free for non-commercial use such as family and friends; one-time commercial licences start at CDN$759.

Scanner by JotNot Pro

Ever want to make a copy of a client quote or a sales document while at a remote location but had no photocopier or scanner with you? For simple tasks, the built-in camera app and email might be sufficient to snap a picture and send it by email. A dedicated scanning app, such as Scanner by JotNot Pro, may offer features like cropping and image processing to tidy up the picture and then save it as a PDF or JPEG.

Once the scan is complete you can send it off by email or into iCloud, Dropbox or a number of other storage facilities. The software allows you to password-protect files, sort data by name or date or rename or delete files on your smartphone.

By importing a Word or PDF document into your smartphone and entering the fax number, a fax can be sent to any U.S. or Canadian fax number by simply tapping the Send icon.

Consider a video conferencing app for your business.

Video Conferencing

Video and voice conferencing are useful business tools to connect colleagues, vendors and clients. Skype allows for video and audio communication and is widely available on nearly any platform including desktop operating systems, mobile devices, and even Xbox consoles.

Skype for Business (formerly Lync), however, is an internal business communications tool, generally for medium or large-sized companies, that now comes bundled with Microsoft Office 365.

Many other video conferencing apps can be considered for your business. Apple’s Facetime, included for free on Apple’s devices, may be suitable if most of the people you work with primarily use iOS or a Mac. Unfortunately, Facetime is not cross-platform compatible. Google Hangouts is a free Google platform alternative which, in addition to Android, is also available for iOS and most computers via a web browser.

Margin Calculator

Although fully functioning spreadsheet apps such as Microsoft Excel, Apple Numbers or Google Sheets can handle more than just margins and taxes. For quick answers to relatively simple problems, an app such as iMargin (iOS), or Margin Markup Calculator (Android) might suit your purpose.

The software instantly calculates the markup or margin to keep a reasonable profit when negotiating the sale. If you want to determine a markup based on a selling price, enter the cost and the selling price, and the markup amount and percentage are displayed. Selling to a foreign entity? Some apps offer an upgrade for an additional fee to include a currency converter, although there is always the free option to convert currency via a separate app.

AirDroid

Big fingers, little keyboard, make typing, dragging or accessing items on your smartphone a productivity nightmare. Enter AirDroid 3, an app that allows access to everything on your Android phone through your Windows or Mac computer or web browser.

The free app can be enhanced with other features such as unlimited file transfer by remote transfer with one GB for Windows or Mac and 100 MB with Web. You also have the ability to connect six devices to the software using one AirDroid account. The app also allows you to see through the lens of your camera remotely and will take pictures of individuals attempting to unlock your smartphone. And it also permits dialing phone numbers remotely from the Web and talking on the phone. The premium app costs US$1.99 per month or US$19.99 annually.

If you use an iOS device and a Mac, there is no need for an app like AirDroid since many of those capabilities are already included for free, such as Handoff, AirDrop, AirPlay and iCloud.

Android Device Manager/Find my iPhone

Anyone who has lost their wallet or handbag knows the gut-wrenching panic that sets in knowing the problems that arise with lost identification. Magnify that 100 times when your smartphone, with all client contacts, emails, and calendar data is lost. Both Android Device Manager (for Android devices) and Find my iPhone (for iOS devices) are a free-platform solution. For peace of mind, you should install this app on your smartphone as soon as you get it. Both apps allow you to locate the devices tied to your Google or Apple account, respectively. For a selected device, you can lock the screen (requiring a password), display a message and, if necessary, erase all data on the phone. Both services allow tracking via the app, which is useful if you have another device on the same platform, such as from a tablet; both can also be accessed on a PC via a website.

Contact Argento CPA today!

Source: BUSINESS MATTERS

Disclaimer: BUSINESS MATTERS deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
BUSINESS MATTERS is prepared bimonthly by the Chartered Professional Accountants of Canada for the clients of its members.
Richard Fulcher, CPA, CA – Author; Patricia Adamson, M.A., M.I.St. – CPA Canada Editor.
Contact us: patricia@adamsonwriters.ca

MANAGEMENT

Improved employee literacy is essential to meet the challenges of changing markets.

Literacy

Literacy: “The ability to understand and employ printed information in daily activities, at home, at work and in the community — to achieve one’s goals and to develop one’s knowledge and potential” (Definition provided by the International Adult Literacy and Skills Survey)

We live in a country where we take literacy for granted. After all, we spend millions on our education system and pride ourselves in having some of the best universities in the world.

And yet, 42% of Canadian adults between the ages of 16 and 65 have low literacy skills. What is considered literacy? Studies focus on three categories:

• Prose literacy: the ability to understand and use information from texts such as editorials, news stories, poems, and fiction.
• Document literacy: the ability to locate and use information from documents such as job applications, payroll forms, transportation schedules, maps, tables, and graphs.
• Quantitative literacy: the ability to perform arithmetic functions such as balancing a chequebook, calculating a tip, or completing an order form.

Employers may not realize the negative impact that low literacy skills have on their bottom line. Issues that accompany low literacy include:

• inability to understand safety rules
• inability to interpret and explain work-related issues to fellow employees or those they are training, thereby lowering the standards of excellence throughout the business
• inability to problem solve with reference to manuals, government documents, schematics, graphs, etc.
• increased in-house training costs to produce goods and services and carry out corporate policy
• lost opportunities to promote individuals with skills but who cannot meet established deadlines, work within budget, or understand quality assurance guidelines
• risk of accidents or errors when individuals cannot calculate simple maximum weight or height capacities of equipment
• lost productivity when employees cannot adapt to new instructions
• lost revenue when employees make errors in cost calculations

Essential Skills

When the Conference Board of Canada asked the question “Is Canada’s workforce sufficiently skilled?” in a June 2014 document, the answer was:
No. Given that Canada is a leader in post-secondary educational attainment, one might reasonably expect that the country would also be a leader in adult skills. Yet Canada and most provinces do relatively poorly on adult literacy, numeracy and problem-solving skills, earning mainly “C” and “D” grades.

To improve on these standings, Human Resources and Social Development Canada has identified nine essential skills needed to improve workplace literacy:

• reading
• document use (understand electronic and paper formats)
• writing
• numeracy
• oral communication
• thinking
• digital technology
• working with others
• continuous learning (ability to increase knowledge and adapt to change)

The Canadian workplace is experiencing a shortage of skilled labour as older, experienced persons retire. To fill the gap, employers are required to hire younger, less experienced individuals and immigrants.

Technically skilled workers may not be promoted because they lack literacy skills.

Younger employees may have advanced entry skills in some of the aforementioned attributes (e.g., continuous learning and computer use) but lose opportunities for promotion because they lack skills in communication, numeracy or writing.

Immigrants certainly have job skills, but the inability to use either official languages creates a learning problem in the workplace.

Future Success

If Canadian businesses want to succeed, management must examine current operations and imagine what skills will be needed five to 10 years down the road. Because changing markets will require highly literate employees, more time and money will have to be spent within the organization to increase employee competence.

To make this happen, employers will need to identify the literacy levels of current employees and then be prepared to invest more time and money on organizational training. Such training should not only reinforce such basic skills as reading, writing and arithmetic, but also encourage development of the other essential skills that promising employees may lack.

Such a program will mean that businesses should seek outside help to assess the literacy needs of all employees, seek assistance with sourcing appropriate programs, hire knowledgeable experts, and work up a budget and schedule training as a necessary part of the workplace model.

Long-Term Benefits

The end result of improving literacy skills will be less time lost because of accidents, fewer insurance and workplace safety claims, improved product quality and greater productivity. Both employees and employers should reap the rewards and benefits

Contact Argento CPA today!

Source: BUSINESS MATTERS

Disclaimer: BUSINESS MATTERS deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
BUSINESS MATTERS is prepared bimonthly by the Chartered Professional Accountants of Canada for the clients of its members.
Richard Fulcher, CPA, CA – Author; Patricia Adamson, M.A., M.I.St. – CPA Canada Editor.
Contact us: patricia@adamsonwriters.ca

MANAGEMENT

Simple precautions will protect your personal and corporate information if natural disaster strikes.

The fires in Alberta show how quickly natural catastrophes can totally disrupt personal and business life. Technology is now available to protect you from losing important information when disaster strikes.

On a Personal Level

Financial institutions need tangible evidence of your existence. Even if the originals of documents are destroyed, you can reassert your identity with photographs. Take pictures of the front and back of all credit cards, debit cards, health cards, social insurance cards, driver’s licences, vehicle insurance cards, etc. Keep all original birth certificates, passports, change-of-name documents, adoption papers, copies of power of attorney, living wills or other caregiver instructions as well as appraisals of jewellery, artwork, collectible or other valuable insured items in a fireproof safe or safety deposit box.

Scan and add to the safe all documents that record RRSPs, RRIFs, investment and your Notices of Reassessment for the last six years to establish your income tax history.

Take pictures of all household furnishings. Not only will these be beneficial for insurance purposes, but they will also provide you with images to use when rebuilding your new home.

Use the highest resolution on your camera or smartphone so all names and numbers can be read when enlarged.

Take pictures of assets and serial numbers.

On a Business Level

Take pictures of all movable assets along with their serial numbers. Re-establishing ownership is easier if you can prove the asset belonged to your business. Scan or take pictures of both sides of all credit and debit cards.

Scan at least one Goods and Services report or Corporate Notice of Assessment to provide the business number.

Scan all important business documents:

• loan agreements
• insurance policies
• lease agreements
• articles of incorporation and resolutions that establish shareholders, directors and officers of the corporation
• bank account numbers, credit card numbers, etc., together with passwords
• invoices for capital asset purchases

Corporate History

If your business is destroyed the history of your success may disappear. Your accountant and lawyer may have copies of financial statements, tax returns and contracts, but what if their business suffers the same calamity as yours? Ensure your future is supported by the success of your past. Scan all financial statements and tax returns and back them up to USB drives, external hard drives or your cloud storage. If you cannot find your past data your accountant or lawyer should be able to PDF it to your computer for transfer to your remote storage facility.

Maximize Loss Recovery

Purchase an encrypted USB drive and an encrypted external hard drive and copy all data onto them. Store the USB in your safe and keep the hard drive at some other secure location such as a fireproof safety deposit box at your bank.

Perhaps the safest storage site of all is on the cloud. There are hundreds of cloud storage services available and thus the only question is how much storage do you need and how much will it cost. Companies such as Google, I Drive, and Microsoft offer a range from five GB to 15 GB for free and expanded storage services for a fee. Dropbox Pro offers a Terabyte of storage for about $10 per month.

Use one of the many web-offered password managers to store your passwords. For about $20 a year, they are a good long-term strategy. Make sure you store the password to log on to the password manager itself in a safe place.

Physical Security of Data

Important articles stored in the basement are more likely to survive because the basement does not usually get as hot as the burning structure above. If you are going to use a fireproof safe, ensure the ratings are at least in the 1750 F (955C) ranges. The best place to store the safe is in a corner. However, any extreme heat over an extended time will eventually erode even the most fireproof safe.

Precautions Reduce Anxiety

Recording personal and business data will not eliminate the heartbreak and stress that accompany such unfathomable tragedies. The use of multiple means to back up important personal and business data, however, will go a long way to reducing the anxiety and frustration that will accompany the long process of rebuilding your personal and business lives.

Contact Argento CPA today!

Source: BUSINESS MATTERS

Disclaimer: BUSINESS MATTERS deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
BUSINESS MATTERS is prepared bimonthly by the Chartered Professional Accountants of Canada for the clients of its members.
Richard Fulcher, CPA, CA – Author; Patricia Adamson, M.A., M.I.St. – CPA Canada Editor.
Contact us: patricia@adamsonwriters.ca