Author: margento

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

Technology

A video surveillance system may be a good investment for the security of your business.

It may sometimes seem that nearly every aspect of our lives is recorded. Although we may choose to record and share some of our moments on social media platforms, many more typically mundane moments are captured by security cameras that monitor the public and private spaces of our society. If you think your business could benefit from a surveillance system, take care to consider your options before making a purchase.

Advantages

There are two key elements to a video surveillance system: the recording system and the cameras themselves. As an owner or manager of a business, there are plenty of advantages to considering a video surveillance, or closed-circuit television (CCTV) system as a part of your business’ security. Some of the benefits may include:

• deterring crimes such as theft and vandalism
• protecting employees
• monitoring key entry points, areas and assets
• monitoring machinery and production processes
• providing evidence in the event of an incident

Cameras

A higher resolution camera, such as high definition (HD) 1080p will produce much more detailed images than a lower resolution camera. The ability to make out a face, or a licence plate clearly could be quite important. Many security camera models capture 15-30 frames per second (fps); a higher frame rate will provide smoother video. While a higher resolution and frame rate are clearly better both require more storage capacity.

If you have a large area to cover, you might consider cameras with a wide-angle lens. You may also want to consider zoom lenses to allow close up videos when required. Be sure to use outdoor cameras for outdoor installation; indoor models may not be sufficiently resistant to the elements, or durable to vandals.

Recording System

Secure storage of the recorded images is the heart of your surveillance system. Security images can be recorded using a dedicated appliance such as a Digital Video Recorder (DVR) or Network Video Recorder (NVR), a PC or even in the Cloud. The number of cameras the system can support may be limited by the hardware, software or even licences; whichever type of system you choose, be sure to leave room to expand.

Traditional CCTV systems are simpler to set up and more secure than their networked cousins because they use dedicated analogue coaxial cabling to transmit their images. A DVR receives the camera signals, processes the images and stores them in a compressed digital format that can be retrieved for later playback. A PC with both video-capture hardware and recording software can also perform the same task. In both cases, the hardware physically limits the number of video feeds that can be recorded.

Digital IP-based cameras can be more complex to set up, but the use of Internet standards provide for greater flexibility; IP cameras use Ethernet cables, or even WiFi, just like the other devices on your network. Aside from technological differences, an NVR serves much the same purpose as a DVR; the hardware may, however, limit the number of video signals it can receive and store. A PC with the right software can also be used to receive, store and play back video from your IP cameras; specialized hardware is not required. Many IP systems also allow live or stored video to be retrieved remotely, commonly via a web interface or even a mobile app.

An IP-based camera system can be recorded in the Cloud for a subscription fee.

If you prefer a more hands-off solution, an IP-based camera system can be recorded in the Cloud for a subscription fee. Keep in mind that this may require a lot more Internet bandwidth than if you just store your video locally. IP-based systems do require extra security – like the rest of the computers and devices on your network, they can be hacked.

Regardless of whether you choose CCTV or an IP-based system, storage capacity is an extremely important consideration. The video resolution, frame rate, number of camera feeds and length of time you need to keep your recordings will dictate the minimum amount of hard drive space you need. When the storage runs out, older recordings will be replaced by new ones; more capacity to start with is better.

Do not do it yourself

The many technical, mounting, transmission and security issues that accompany installation of surveillance cameras suggest hiring outside experts to install the equipment is the preferred way to go. When one considers camera requirements, weather conditions, positioning for maximum transmission and recording along with wiring, DVR/NVR placement, not to mention a service contract and warranty, spending a few dollars for installation is a smart expenditure.

Legal Issues

Even though the use of surveillance cameras in the workplace is quite common, Canadian courts are not in favour of the frivolous use of surveillance that infringes upon an employee’s right to privacy. The key question that must be answered before installing surveillance cameras in the workplace is: “Should the employee have a reasonable expectation of privacy?” As such, constant monitoring in the workplace may be frowned upon. Where cameras are installed in general areas, consider posting notices in conspicuous places to indicate the area is monitored. Such signs remove any doubt as to the expectation of privacy. If in doubt, it may be prudent to seek legal advice before installing a new surveillance system.

Plan Ahead

Before making a decision to buy a surveillance system, consider the needs of your business, your budget limitations and the legal aspects of installing cameras. If you decide to proceed, get equipment designed for commercial use. Avoid consumer-grade components which may be less durable and provide less flexibility. Buy the best you can afford.

 

 

 

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.

MANAGEMENT

Attention small business owners: are your affairs in order in case death takes you by surprise?

About 150,000 people around the world die every day; of these, about 730 are Canadians. Even though death is still inevitable, life expectancy for Canadians has risen significantly in the last hundred years and continues to rise. A male born in Canada in 1911, for example, could expect to live for 47.1 years and a female for 50.1 years. A male born a century later in 2012 can expect to reach 79.8 years of age and a female to reach 83.9. This dramatic extension of life expectancy is largely attributable to a sharp reduction in infant and child mortality rates through medical intervention (e.g., vaccinations), improved sanitation and a better quality of life through the elimination of child labour, improved education, and better diet.

Changing Statistics

PIn the years between 1979 and 2009, the percentage of deaths due to diseases of the heart declined sharply to 22% from 35% for men (to 20% from 34% for women) while the number of deaths attributable to malignant neoplasms (i.e., malignant tumours that spread to other parts of the body) rose to 31% from 22% for men (to 29% from 24% for women).

Unexpected Death

If death comes unexpectedly, are your business and personal affairs in order so your business associates and family can move forward with the minimum of problems? As a test of your preparedness, ask yourself the following questions. Your answers will indicate what you need to do to be ready in case the unthinkable happens. Discuss the results with the appropriate individual and document as required.

• As a starting point, consider what information should be up to date.
• Who has signing authority on business and personal bank accounts?
• Who is your second to take over operations?
• Is key man insurance in place?
• Are financial statements current for valuation purposes?
• Have you established protocols and the format of notification of your death to clients and suppliers? (email? text?)
• Is there a (prewritten) letter to all clients and suppliers assuring them that the business is still viable and that named individuals will be looking after their accounts and business?
• Does the company have a corporate lawyer and a corporate accountant who should be notified?
• Is there a summary of all business and personal passwords to access bank accounts, tax accounts, computer programs, Cloud applications, hard drive backup, and client accounts?
• Are the minutes of the company kept up to date?
• Do the registers of directors and shareholders reflect current appointments?
• Is there a listing of all business and personal insurance policies, RRSPs, TFSAs and other such investment vehicles that must be accessed?
• Is there a listing of financing arrangements for business and personal vehicles, and your residence?
• Is there a listing of all credit cards and required passwords to determine balances owing?

Is your will up to date to reflect changes in your personal life?

• Is your will up to date to reflect a divorce, marriage, acquired children or other dependants who may have created claims on your estate?
• Have you determined what, if anything, you wish to give to charities?
• Are survivors aware of who has the original will?
• Who is the executor(s) of the estate?
• Have insurance policies, RRSPs, TFSAs and the like been updated to ensure that the named beneficiary is correct?
• Have you reviewed personal and business debt to determine whether insurance coverage is adequate?
• Has a guardian for children or those with disabilities been named?
• Is access to safes and safety deposit boxes guaranteed with appropriate passwords, keys, and alarm codes?
• Have you considered meeting with funeral directors to discuss funeral arrangements (and payment) for a religious funeral service, cremation or burial to reduce the stress on survivors?
• Are family members aware that the Canada Pension Plan will pay a death benefit to the spouse and/or survivors in the event of your death?
• Have you considered a Statement of Wishes that outlines such issues as funeral arrangements, custody of children, and any other area that you would like to be in place upon your death? (Although not necessarily legally enforceable, it does provide guidance to survivors in times of stress.)
• And finally… have you made a list of the above-named items and provided those lists to the appropriate individuals who need to know how to act?

Act Now

We all put off what we should do today until tomorrow… but what if tomorrow never comes?

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.

TAXATION

Registered Disability Savings Plans help persons with disabilities save for the future.

Having a disability or caring for an individual with a disability can be emotionally and financially draining. The Canadian government, recognizing the need to assist in the future care of an individual with a disability, has created a vehicle for persons with disabilities and their families to save for the future.

As a Starter

The first step is to open an RDSP in the name of the beneficiary who must be a Canadian resident under the age of 60. If the beneficiary is 59, the plan must be opened before the end of the calendar year in which the individual turned 59. Other requirements for enrolment include the need to have a social insurance number and be eligible for the disability tax credit. The program allows only one RDSP per beneficiary and only one beneficiary per RDSP.

Determining the Holder

Once these criteria have been met, the RDSP holder (administrator) must be determined. The holder can be an individual or an organization. If the beneficiary is under the age of majority (the age of majority varies from province to province), the holder can be a parent, a legal representative or the provincial trustee.

If the beneficiary is over the age of majority but not capable of entering into the RDSP arrangement, specified family members may be able to open the RDSP on behalf of the disabled beneficiary until the end of 2018.

Choosing the Financial Institution

The RDSP must be administered through a financial institution participating in the program. Most banks, as well as a number of credit unions and trust companies, offer this service.

There is no annual contribution limit.

Contribution Limits

Unlike other savings plans, there is no annual limit on contributions to an RDSP. However, the lifetime limit of contributions is $200,000 and the threshold must be met by the end of the calendar year in which the beneficiary attains 59 years of age. The federal government actively contributes to an RDSP plan based upon family income levels.

Tax-Deferred Growth

Similar to the Registered Education Savings Plan (RESP), contributions made to the RDSP are not eligible for a tax deduction by the contributor(s) but income and capital gains within the plan grow on a tax-deferred basis. Once the funds are withdrawn, the amount is taxed as income in the hands of the beneficiary. Withdrawals include a blend of taxable and non-taxable amounts. Money that has been contributed to the RDSP is not included as taxable income when it is withdrawn. (The amount of non-taxable income is calculated according to a formula developed by the Canada Revenue Agency.) However, investment income and capital gains, plus any Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB) amounts in the plan are included in the beneficiary’s income for tax purposes when paid out of the RDSP.

Contributions and Withdrawals

It may come as a surprise, but anyone can contribute to a specific RDSP as long as the holder approves the contribution amount in writing. Withdrawals must begin when the beneficiary turns 60. Annual withdrawals, Lifetime Disability Assistance Payments (LDAPs), continue until the death of the beneficiary. A beneficiary may make a one-time withdrawal under the Disability Assistance Programme (DAP).

Investment Criteria

The investment criteria mirror those of an RRSP investment in that investments can be made in mutual funds, fixed income investments, GICs and Canadian, U.S. and foreign equities, including new issues.

Canada Disability Savings Grant

The beauty of the RDSP is that the federal government will assist saving for the beneficiary by providing matching grants of up to 300% for every dollar placed into the account by contributors. The maximum grant provided through the Canada Disability Savings Grant tops out at $3,500 per annum and has a ceiling of $70,000 during the matching contribution period that ends when the beneficiary turns 49 years of age.

As can be expected, grant amounts are based upon the beneficiary’s family income and inflationary factors but, if you meet the various criteria to apply for the grants, the rewards to the RDSP are as follows:

If family income is less than or equal to $87,900:

• For the first $500 you contribute each year to the RDSP, the federal government will deposit $3 for every $1 you contribute, up to $1,500 a year.
• For the next $1,000 you contribute each year to the RDSP, the government will deposit $2 for every $1 you contribute, up to an additional $2,000 a year.

If family income is greater than $87,900:

• For the first $1,000 you contribute each year to the RDSP, the government will deposit $1 for every $1 you contribute, up to $1,000 a year.

The government also contributes funds to low- and modest-income Canadians through the Canada Disability Savings Bond. Those who qualify can receive up to $1,000 per annum to a maximum of $20,000, depending upon family income. The government will make no more contributions after the year in which the beneficiary turns 49. Note that it is possible to receive the bond even if contributions are not made to the RDSP

Withdrawals from RDSPs

Because RDSPs are designed as long-term plans, withdrawal of funds from either the bond program or the grant program before the 10th anniversary triggers repayment requirements. Plan holders should be aware that the death of the beneficiary or a determination that the beneficiary may have a shortened life expectancy will create withdrawal or repayment requirements.

Because withdrawals or the death of the beneficiary will create different repayment or settlement terms, the beneficiary should understand the financial and income tax impact of early withdrawal, death or shortened life expectancy. Your CPA tax advisor, in conjunction with the financial institution representatives should be able to offer advice.

Excellent Means of Saving

RDSPs are an excellent vehicle for individuals with disabilities or those responsible for their future financial security. As in any program designed to look after the future welfare of those we care for, the earlier the program is registered, the more opportunity is available not only for government contribution but for the RDSP to grow and provide that financial security.

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.

MONEYSAVER

If you have a medical condition that first responders need to know about, consider getting a MedicAlert bracelet or dog-tag.

Canadian business owners do business all over the world. Most enjoy medical coverage from their respective province or territory and may carry additional travel and medical insurance when out of their province of residence.

Just as important as medical coverage, however, is the ability of emergency response teams or a foreign doctor, nurse or medical support worker to know immediately whether you have any special conditions that could determine how you need to be treated.

A MedicAlert bracelet or dog-tag lets first responders know that you have a specific medical condition or a specific allergy even if you are unconscious. (The bracelet/dog-tag can be easily identified by the symbol of a serpent-entwined rod known as the Staff of Asclepius, a Greek god associated with healing.) The MedicAlert Foundation is a non-profit, charitable, and membership-based organization founded in 1956 in Turlock, California, by Dr. Marion Collins. The Foundation’s mission is to protect and save lives by serving as the global information link between members and emergency responders during medical emergencies and other times of need.

The Bracelet/Dog-Tag

Each MedicAlert bracelet/dog-tag provides first responders with information regarding allergies, implants such as artificial heart valves, medical treatments such as chemotherapy and treatment wishes.

Each bracelet/dog-tag contains the wearer’s unique ID number, medical condition and an emergency toll free number that connects to a live operator 24 hours a day seven days a week. As well, the organization provides a wallet card with emergency contacts and health information.

Worldwide Information Network

In the event of a medical emergency, medical practitioners or first responders can call the emergency number and speak to a live operator who can reference your health records that may include your medical condition, types of medications and dosage, as well as past surgical history. If the emergency requires transfer to a medical facility, MedicAlert will transmit the information to that facility so the information will be available when you arrive. In the event your travel takes you out of country, the MedicAlert Foundation is present in more than 50 countries and translation service is available in over 140 languages.

Low Cost

Firstly, let it be known that it is not possible to obtain a MedicAlert bracelet/dog-tag without becoming a member. Because the bracelet/dog-tag cannot carry all your medical information, you must become a member before the bracelet/dog-tag will be issued.

MedicAlert protection starts at $39.

According to their Canadian website, the cost of the MedicAlert ID starts at $39. (For the fashion conscious, MedicAlert provides a catalogue of specialty wear that resembles jewellery with prices topping out at around $2,700.) On top of the cost of the bracelet/dog-tag, a $24 fee is required to set up your medical profile and ensure the ID bracelet/dog-tag is properly engraved. The coverage after that is $5 per month with small discounts provided for prepayments of 24 or 36 months.

Other services provided by the MedicAlert membership include:

• online access to your medical information anywhere 24/7
• notification of family members or other named individuals in the event of a mishap

MedicAlert offers an optional service plan that enhances the basic plan with additional personal information that includes for example DNR orders, X-rays, MRIs, or CAT scans. These documents are available to a designated proxy or medical practitioner as needed.

If you are a frequent flyer, an entrepreneur who has previous medical history or have employees who could benefit from wearing a MedicAlert bracelet/dog-tag, perhaps now is a good time to investigate membership. Unfortunately, the cost of membership is not a tax-deductible medical expense and thus, if management determined that membership should be paid by the business, that cost would possibly be considered a taxable benefit.

MedicAlert Reduces Risks

The MedicAlert program is relatively inexpensive when one considers that information provided to first responders or medical practitioners provides knowledge crucial to your well being. That knowledge could reduce the risk of incorrect medical treatment as a result of a wrong diagnosis, may prevent unnecessary medical care, and ultimately just might save your life.

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.

INCORPORATION

The incorporation process is relatively simple whether you incorporate provincially or federally.

As a sole proprietor, you may be looking back at last year’s results and ahead to the time you have to pay your taxes, and wondering whether you might not be better off incorporating to control the income tax expense on earned income. In Canada, a company may be incorporated provincially or federally. Federal incorporation has some advantages:

• You can carry on business in any provincial jurisdiction using the federally approved name.
• The head office can be in any province.
• Books and records can be maintained in any province.
• Annual meetings can be held in any province or territory.
• If you are incorporated provincially and wish, for example, to move your business from Alberta to Manitoba, it would be necessary to dissolve the Alberta corporation and reregister in Manitoba or apply for a discontinuance in Alberta and apply for a continuance in Manitoba. If your business is incorporated federally, you need only file Articles of Amendment indicating the head office is moving and register an extra-provincial corporation in its new home province.

Whether you are thinking of incorporating provincially or federally, the following are a few areas to consider:

Naming the Company

The corporation can have a name company or a number. If you incorporate using a number, you may also use a name (i.e., 1234567 Ontario Ltd. could also register itself as “Able’s Horse Stable”.) This name becomes “attached” to the registered number.

When conducting business using the trade name, you must still identify the company by its registered name. For instance, sales invoices could show “Able’s Horse Stable” but should indicate that the actual incorporation name is 1234567 Ontario Ltd.

The name chosen cannot be either identical or deceptively similar to existing registrants in the province. The name or number must be identified as a corporation by using the French or English forms of “limited” or “incorporated”.

Location

The head office of a provincially incorporated company must be located in the province of incorporation. The head office is usually at the same location as the operations but, if there is more than one operating location, a choice can be made.

Ownership and control are determined by the number of shares held.

Ownership

Shares must be issued in order for the company to be owned. The owners must decide among themselves the minimum number of shares that will be owned by each shareholder. The shares provide the owners with voting rights. Whether the corporation issues 10,000 or only 50 common shares with voting rights, the degree of ownership and control are determined by the proportion held by each individual. The value of each share is decided at the time of issue. If share value was set at $10 per share, then the holder of, say, 5,000 shares would have to remit $50,000 to the corporation to purchase ownership.

Private corporations may not have more than 50 shareholders. The residential addresses of all shareholder(s) must be provided for notification purposes.

Directors

All corporations must appoint at least one Canadian resident as a director. If four or more directors are appointed, 25% must be Canadian residents. The residential address of the directors must be provided along with the residency status.

Officers

In owner-managed businesses, it is not unusual for the shareholder(s), director(s) and officer(s) to be one and the same. It is not a requirement for officers to own shares or be directors of the corporation. However, in that officers manage the operations of the company, they are held to a high standard of stewardship and thus the appointments should not be taken lightly. The residential addresses of the officers must be provided.

Year-End Date

You will have to determine a fiscal year-end date for the corporation. Depending upon the date of incorporation and the business cycle, you may choose a year end other than the calendar year end. It is advisable to speak to your CPA about the best month end for your type of business and to maximize tax-deferral possibilities.

Auditor or Accountant?

Provincial acts of incorporation may require audits of financial statements. This requirement can be waived for non-publicly traded companies as long as all of the shareholders agree to waive the audit provision. Consent to waive an audit is required each year. Most business owners, their banks and creditors do not require audited financial statements; waiving audit provisions in favour of reports provided by a CPA is an acceptable alternative.

Even though the appointment of an auditor may not be required, it is wise to consider appointing a CPA as part of the incorporation process to assist in setting up the required books and records, tax accounts, business number, WSIB, employee payroll remittance accounts, HST or PST accounts and all the other regulatory registrations that may be specific to your business.

Seek Professional Advice

Incorporation requirements vary from province to province. The guidelines above are provided as general consideration as to what is normally required. Entrepreneurs considering incorporation should seek professional assistance in their jurisdiction to ensure the appropriate steps and documentation meet the requirements under their provincial incorporation act.

 

 

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

Crowdfunding is a new way to raise money; however, be careful of the tax implications.

One of the latest means of raising money to start a new business, raise operating funds, or tackle costly research and development projects is to make a broad-based appeal for funds with crowdfunding. Crowdfunding is not new; it was used in the nineteenth century, especially in small communities, to fund local projects through subscription. For example, the monumental base for the Statue of Liberty was financed by a New York newspaper that gathered small donations from 160,000 donors. More recently, it has been used to fund tours of rock bands, and to produce movies, video games and inventions.

Social media have expanded the use of crowdfunding. Social media make it possible to reach a large audience that might be willing to make personal contributions for families with unmanageable medical bills, or to help needy individuals recover from catastrophic personal financial loss.

Why crowdfunding is so beguiling is anyone’s guess, but its success cannot be understated. In 2013, an estimated $51 billion was provided to crowdfunding appeals around the globe.

Crowdfunding and Business

Business entrepreneurs have also discovered crowdfunding as a new means of raising funds because it creates an alternative to traditional financial institutions. Further, the receipt of funds from complete strangers through crowdfunding removes the need for a business to provide the donor with shares, a promissory note, or to pay interest or dividends. At first blush, the recipient might think crowdfunding income meets all of the criteria of a windfall.

Crowdfunding is treated as income and therefore is subject to tax.

Not a Windfall

Because funds raised through crowdfunding are not a windfall or gift, they are treated as income and thus, are subject to income tax.

According to a Dec. 9, 2014 Income Tax Folio S3-F9-C1, Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from Crime, the CRA states that crowdfunding is a taxable benefit. As a starting point, the income tax folio states:
1.5 However, sometimes individuals receive a voluntary payment or other valuable transfer or benefit by virtue of an office or employment from an employer, or from some other person. In such cases, the amount of the payment or the value of the transfer or benefit is generally included in employment income pursuant to subsection 5(1) or paragraph 6(1) (a). (See also Guide T4130, Employers’ Guide — Taxable Benefits and Allowances.) Similarly, voluntary payments (or other transfers or benefits) received by virtue of a profession or in the course of carrying on a business are taxable receipts.

The Folio continues with an example specific to crowdfunding:
Assume a business uses crowdfunding as a method of raising funds for the development of a new product and the contributors do not receive any form of equity. The amounts received by the business would be included in its income pursuant to subsection 9(1).

Subject to Tax

Whether the business organizational structure is a proprietorship, a partnership or a corporation, funds received from crowdfunding are subject to tax. If, as part of the crowdfunding activity, consideration is provided in the form of thank-you plaques, pens, T-shirts, etc., then these costs are deductible expenses. In addition, many campaigns raise money for a particular purpose. If spent for that purpose, little or no taxable income may result. If one also considers that financing costs are minimized along with the need for debt repayment and perhaps personal guarantees for the borrowed money, the income tax cost, if any, may not be onerous.

Selling Ownership

Some entrepreneurs want to use crowdfunding to raise equity capital. Securities regulators of British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia have implemented or expect to implement registration and prospectus exemptions that will enable start-ups and early-stage companies to do just that. Companies will be allowed to raise up to $500,000 in a year through approved Internet funding sites. No more than $250,000 of this can be raised in one offering, however. No individual can invest more than $1,500 per distribution. People will have the right to withdraw their money within 48 hours. Ontario has decided to develop separate standards. As would be expected, funds raised through an equity issue are not taxable to the recipient company, but any dividends or capital gains received by the contributors will be subject to income tax.

Be Aware of the Tax Implications

Raising money through crowdfunding, whether for operational, developmental or equity issue, is a relatively new means of raising funds and many budding entrepreneurs may not realize the tax implication of receiving crowdfunding money. For businesses or corporate entities considering using crowdfunding as a means of generating operating capital, it would be wise to consult your chartered professional accountant to determine the amount of tax for which they may be liable.

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

Effective communication is the key to effective management.

The new technologies may enable us to send and receive messages at the speed of light, but the understanding and interpretation of those messages still depends on the clarity of the message itself. A meeting or set of instructions is worthless if its message is ambiguous.

Hearing is something we do all the time. Listening, on the other hand, is the process of decoding, understanding, and retaining what we have heard. As a result, management and staff have a vested interest in ensuring that the message presented is the message received, and that what is said is what is heard.

Management must be sure the message is clear and concise and that the listeners have the skills to understand the information as presented. Having listening skills is essential to absorbing and comprehending the message.

To improve your listening skills, consider the following.

• Turn off your smartphone.
• Pay absolute attention to the presenter. Listen not only to the words but also to intonations of the voice and observe the body language. These markers communicate as much as the actual words because they provide indications of the importance attached to specific subject matter.
• If you are listening to a formal presentation, save your questions until the end. Everyone will benefit from hearing the uninterrupted flow of the speaker’s argument. This allows the presenter to complete the line of argument and perhaps actually answer your question before you even ask.
• Phrase your question carefully. You must be specific in your question to receive a specific answer. Do not ask open-ended questions. A well-structured question relates directly to what has been presented and simplifies the work of the presenter.
• Do not interrupt the speaker’s answer to your question. Interruption redirects the presenter’s thinking and, as a result, the response may not be as in-depth as it should be.
• Always acknowledge the answer to provide closure to the presenter and other participants.
• There is a difference between not understanding a topic and not understanding what a presenter has said. Often a presenter’s syntax may leave you wondering just what was meant. If that is the case, seek clarification by raising the issue and presenting the thought in your own words. For instance, if the presenter were to say: “Well, that is water under the bridge” and you did not quite understand the idiom, you might ask: “Did that last comment mean the issue is behind us?”
• Leave your personal biases and opinions at the door. We all have an opinion on how the system should operate but clinging to one idea closes the mind and does not allow for understanding of the other point of view, nor does it encourage the creation of a dialogue or the possibility of creating an entirely new process.
• Presentations are built from the ground up and contain snippets of information that may seem off topic to the listener but are part of the larger message. If you are unsure about the relevance of the specific item, make a note. When it is time for discussion, ask a question to get clarification as to how the point ties into the overall project.
• When colleagues ask for clarification, let the presenter handle the question. Do not distort the question by interrupting or adding your opinion unless asked by the presenter to do so.
• As well as listening to what is being said, it is important to listen for what was not said to determine whether there is a subtle message not being brought to the forefront. (By way of explanation: If a presenter indicates that 30 new staff will be hired, is the hidden message that people may be let go?)

Keep Their Attention

The presenter’s role is to get and keep the listeners’ attention. An attentive and involved audience is more likely to retain more information. Researchers have discovered that those who attend a 10-minute presentation retain only 50% of the topic presented. To involve participants in listening, the presenter should keep the following in mind:

• Know your audience. Know what they need to know and do not talk over their heads or treat them like simpletons. For example, an engineer would present the same information one way when talking to fellow engineers and in a different way when addressing salespeople to upgrade their product knowledge.
• Make sure you have the central point of your presentation clear in your own mind.
• Be enthusiastic and entertaining. No one benefits from a dull, monotonous, fact-filled presentation.
• Indicate the length of the meeting, its purpose and the topics to be covered. Explain what attendees are expected to know at the end of the presentation.
• Ask for the participants’ attention. Request that all smart phones be turned off.
• Keep the meeting short and on topic.
• Be prepared. Know your topic better than the participants. Anticipate any questions they may have.
• Do not wander off topic with anecdotes but use plenty of simple illustrations.
• When participants raise enquiries outside of the agenda, indicate that the issue is outside the scope of the discussion and ask them to talk with you about the issue after the presentation.

Check your equipment before starting the presentation.

• Make sure beforehand that all your equipment is working. Check and double check that your projector, computer and software are working. Always have backup available.
• If the Internet is necessary, be sure it is on line and working.
• Toward the end, summarize the main topics and line of argument.
• Close by restating the purpose of the meeting and how the subject matter achieved this purpose.
• Reiterate the goals and ask individuals if the presentation, in their opinion, met specific goals that you had hoped would be obtained.
• Provide a hardcopy summary of the presentation at the meeting or later on the corporation’s website.
• Stay within the time allowed.

Responsibilities

Employees and employers have a responsibility to ensure that what is communicated is understood by the one receiving the communication. Good listening skills enhance efficiency, effectiveness and harmony within the work place.

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

Dashcams can provide the key evidence in a vehicle accident or fraud claim.

According to Transport Canada, automobile collisions in 2013 resulted in 165,306 personal injuries, of which 10,315 were serious and 1,923 were fatal. These statistics do not take into account the thousands of fender-benders that are not included in Transport Canada’s data. According to the Allstate 2015 Safe Driving Study, rear end collisions accounted for 25% of all accidents while turning at intersections was a close second at nearly 24%. Interestingly, almost 14% of reported accidents involved a parked vehicle.

Owner-managers have need to be concerned about accidents in company-driven vehicles. It may be worth considering outfitting your company-owned vehicles with an onboard camera, better known as simply a dashcam. Typically, a dashcam is used to continuously record video through the windshield. Having a dashboard camera in your vehicles could provide evidence regarding an accident which may help to mitigate legal or settlement costs, as well as to provide detail to establish the driver’s responsibility.

Must-Have Features

Get the best video resolution you can afford; for better results consider models that record in at least 1080p High Definition (1920 x 1080 pixels); additionally, quality night recording capability is a must.

The viewing angle (i.e., how much of the world the camera can see) is an important consideration. A wide-angle lens such as 160-degrees may capture more in the frame but may produce a more distorted image; narrower lenses are more likely to pick up sharper details.

Loop recording automatically overwrites the oldest footage.

Almost all dashcams should have loop recording that automatically overwrites the oldest recording when the storage card becomes full. Choose a dashcam with a G-sensor. The G-sensor automatically indicates when the vehicle is involved in a collision or if there is a need for emergency braking. This specific footage will not be deleted by the loop recording. Given the number of claims involving a parked vehicle, a motion detector feature may prove handy. Upper-tier dashcams should incorporate a buffered parking mode that continuously records what is happening while the vehicle is parked but does not record to memory unless stimulated by the G-force sensor or by the visual motion detector program.

Auto start should be standard. Every time the vehicle is started the dashcam should start recording automatically so that the driver does not have to remember to turn the device on. On the flip side is the need for automatic shut off to avoid draining the vehicle’s battery.

Battery drain is a problem with some dashcam models because they run off the vehicle’s power. Consider models that either contain their own battery for when the car is off, or can automatically shut off when they detect the vehicle’s battery is getting too low to start the engine.

You may wish to consider a unit with a GPS option. Having GPS support most likely does not include any navigation assistance, but it can record the exact speed and position of the vehicle. Some units have the GPS built in and others can connect to an existing GPS device to receive that data.

Date and time stamp are a must. That said make sure the date and time are set up properly. Check the settings occasionally and recalibrate as necessary.

Forward-looking cameras are great, except that when one considers that 25% of accidents happen from behind, it makes sense to consider a Dual Channel model: in addition to the forward-facing camera, some units include a second camera that can be used to look through the rear-view mirror or be mounted in the rear-window.

In that dashcams are mounted at the top and near the centre of the windshield ensure that the power cord is long enough to permit concealment in the vehicle’s window seals whether or not the device is plugged into the dash power source or directly mounted to the vehicle power source.

Memory is extremely important. The more memory available, the longer the camera can run without having to over-write older video. Some units may include a smaller memory card than the maximum they can support. Because memory cards are relatively inexpensive, you may wish to consider maxing out the memory. Do not settle for less than a 64 GB SD card; 128 GB would be even better.

WiFi ranges from a useful feature to an absolute must, depending on the model. Some models include a built-in LCD screen to view and replay recordings right on the device. However, for models that do not include a screen, you may be able to view and download videos from the dashcam to a smartphone or tablet using a WiFi connection. WiFi also allows an easy way to retrieve videos from the dashcam without having to remove the physical memory card.

Check Provincial Regulations

It should be noted that at least one manufacturer combines a radar-detector product with dashcams, which can help users share information on radar and red light cameras, as well as other traffic issues. Before purchasing these devices, check with your province as to whether the units are legal. Further, if vehicles will cross provincial boundaries it would be prudent to determine which provinces discourage or have outlawed radar detectors; the penalties may range from confiscation of the device to stiff fines.

Expensive But Worth It

Inexpensive dashcams can be found for under $100; however, feature-rich models will likely cost about $400-500 per vehicle. Having a recording from a high-end dashcam can go a long way to providing evidence in the event of an accident or a fraudulent insurance claim. As well, they will provide information to monitor employees’ driving habits and check the routes being driven.

Can your business afford to be without a dashcam?

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