Category: News

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

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

These can pose as major roadblocks for any growing business. 

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

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

What Does it Mean to Automate Your Bookkeeping?

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

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

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

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

Automating Bookkeeping Saves Time and Improves Profitability

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

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

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

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

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

Automating Bookkeeping Provides Financial Visibility

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

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

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

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

Automating Bookkeeping Leads to Better Decision-Making

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

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

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

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

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

Automating Bookkeeping Prevents Burnout

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

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

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

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

Maximize Business Growth with the Help of an Experienced Accountant

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

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

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

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

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

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

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

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

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

Know What Deductions and Credits You Qualify For

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

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

There are tax breaks for:

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

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

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

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

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

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

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

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

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

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

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

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

Know Your Due Dates

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

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

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

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

Create a Tax Plan

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

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

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

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

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

Work with an Experienced Accountant

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

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

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

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

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

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

1. Look for Applicable Credits and Deductions

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

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

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

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

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

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

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

2. Contribute to an RRSP

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

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

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

3. Transfer Tax Credit to Your Spouse

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

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

4. Look into Your Capital Cost Allowance

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

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

5. Write Off Losses

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

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

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

6. Pay Your Family

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

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

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

7. Keep Good Records and Pay on Time

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

Paying on time keeps you away from unwanted fees.

Get the Most Out of Personal Tax Considerations

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

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

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

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

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

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

Here are a few pointers to get you started: 

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

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

Why is that? 

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

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

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

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

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

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

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

Are NFTs Taxed As Business Income Or Investment Income?

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

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

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

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

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

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

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

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

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

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

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

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

What Are Taxable Events?

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

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

How A Qualified CPA Can Help

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

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

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

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

Canadians who travel across the border for work may have a U.S. retirement plan such as an IRA or a 401K. While it’s okay to keep the retirement plan in the U.S. many people choose to move it over the border. 

Some of the reasons for moving your plan to Canada may include: 

• The desire to keep all of your financial affairs in one country
• Risk mitigation and running into possible investing restrictions
• Trying to avoid paying U.S. estate taxes
• Saving money by having one advisory service manage all your financial affairs

Whatever the reason may be, there are tax implications from both sides of the border you’ll need to keep in mind before making the move. 

U.S. Retirement Plan Tax Implications

If you decide to make the switch to a Registered Retirement Savings Plan (RRSP), you will be faced with U.S. tax implications. These implications will vary depending on:

• Your age.
• Whether or not you still pay income tax in the U.S.
• How you choose to withdraw your money.

Because you are moving your money from the U.S. to Canada, you will need to sort through the U.S tax implications before moving on to the Canadian tax implications.  

Early Withdrawal Penalties 

Making a withdrawal under the age of 59.5 will result in a U.S. withdrawal penalty of 10% of the total amount. This fee is required for citizens in both the U.S. and Canada. 

However, you are responsible for remitting the penalty as the U.S. plan administrator is not responsible for collecting this. To make the remission, you will need to complete the appropriate U.S. return depending on your filing requirements. 

Withholding Tax

You will be subject to withholding tax depending on how you choose to withdraw from your U.S. retirement plan. There are two ways to withdraw, a lump sum withdrawal or a periodic withdrawal.

Lump Sum Withdrawal 

A lump sum withdrawal is a one-time payment from your administrator. As a Canadian citizen, a lump sum withdrawal is subject to a 30% U.S. withholding tax. However, in some cases, your administrator may elect to enforce a reduced withholding rate so, it is advised you check with them before making any withdrawals. 

Periodic Withdrawal

A periodic withdrawal means your total will be paid out in payments over a set period of time. Because of an income tax treaty between the U.S. and Canada, periodic withdrawals come with a reduced withholding tax of 15%. That 15% will be applied to each of your payments. 

In order to claim this reduced withholding tax, you will need to file a W-8BEN form with your administrator. This indicates your foreign status from the U.S. and allows you to take advantage of the reduced rate that is a result of the treaty. 

Canadian Retirement Plan Tax Implications

Once you’ve gone through the process of withdrawing from your U.S. retirement plan you’ll have to focus your attention on meeting the Canadian tax implications. 

Regardless of how you choose to withdraw from your U.S. retirement plan, the money will need to be recorded as income on your Canadian tax return, and will therefore be taxed. 

However, if you move your withdrawal directly into an RRSP, you will be eligible to claim a deduction that could help cover some or all of the costs. In order to be eligible for this deduction, there are a few requirements: 

• You must withdraw as a lump sum as opposed to periodic payments. 
• The money you are transferring has to be money accumulated while you were a U.S. retirement plan member and were not a resident of Canada as far as income tax goes. 
• You are currently a Canadian resident and, in most cases, plan to be a permanent resident. 
• You have to add your funds to your RRSP within 60 days of withdrawing from your U.S. retirement plan. 
• You are under the age of 71.

Example

As an example, let’s say you are under the age of 59.5 and have a total of $45,000 in your U.S. retirement plan. You are planning to make a lump sum withdrawal. 

You will be subject to both a U.S. early withdrawal penalty and a U.S. withholding tax. Your early withdrawal penalty will total $4,500 and your withholding tax (with the 15% reduced rate) will total $6,750 bringing your total tax withheld to $11,250. This means $33,750 will be available to add to your RRSP. 

In many cases, people will choose to contribute the amount withheld to “top off” their RRSP considering the entire $45,000 will need to be claimed on your Canadian income tax return for that year. 

Need Help With Your Retirement Plan? Turn to a Tax Professional

Making the move from a U.S. retirement plan to an RRSP can be complicated because of the U.S. and Canadian tax implications. 

To ensure you are maximizing your retirement savings, get in touch with a tax professional, like Argento CPA. We will work with you to create a strategy for withdrawing that guarantees: 

• The lowest possible tax implications
• A timely withdrawal
• All rules and regulations of both countries are met
• All available deductions are claimed

For more information on how Argento CPA can help you financially prepare for your future, contact us today!

A financial forecast is an important component in helping your business reach its goals. 

You may understand quite a bit about where you stand today. You might know your historical data and the current state of your finances. Possibly you’ve identified a number of ways to increase your profitability. But if you aren’t using a financial forecast, you’re missing out on one of the top tools for setting business goals and monitoring your progress toward them.

A financial forecast tells you what revenues and expenses you can expect for a given period of time, for example, the year 2022. 

It’s not a pie-in-the-sky wish of what you would like to achieve. Instead, it’s a realistic projection of what you can reasonably expect to happen given the way you run your business today. It’s a valuable measuring stick both for setting goals and for tracking actual results against the goals.

Use Your Financial Forecast to Set Your Goals

Financial forecasting isn’t exactly the same as budgeting, although the difference between the two is subtle, and they’re generally used together. 

A budget lays out what the business hopes to accomplish in terms of revenue and expenses, while a financial forecast is what the company should expect to happen given historical performance and its current business trajectory. 

With a financial forecast in hand, you can create expense and revenue budget targets that are more ambitious than the forecast, and you can develop ways to achieve your budget goals.

Let’s Look at an Example

Suppose you are reviewing your cash flow. Your financial forecast will tell you where your cash flow will be at the end of the year if you stay on your current course. After analyzing, you decide you’d be more comfortable with a stronger cash flow. So you set a goal to raise your cash flow. 

Goals should always be SMART. That is, they should be:

• S – specific
• M – measurable
• A – attainable
• R – realistic
• T – timely

There should be dollar amounts or percentages tied to your cash flow goals this way you know exactly what benchmark you are aiming to reach and you can measure your progress throughout the process. 

Be sure your newly set goals are within reach. Setting goals that are too far above your forecasted measures often lead to failure. 

Once you get started, you can continue setting goals for revenues and expenses as well as non-dollar goals such as adding new customers and customer retention. You should arrive at a budget that seeks improvement over the status quo but is still within reach.

Use Your Financial Forecast To Measure Your Progress

Once you’ve employed your financial forecast and your budget to set your goals, you can use your forecast to assess how well you’re doing. This assessment can actually help you reach your goals. 

Your forecast tells you how you can expect to do if you maintain your present course. If you modify that course, the financial forecast could change. Six months, three months, or even a month from now, your forecast could give you numbers that are closer to those you hope to achieve.

If you’ve done a good job choosing changes in your business, your forecast numbers should be trending closer to your goals each time you run a forecast. If that’s the case, congratulations! You’ve been successful in implementing the steps to reach your goals. If you’re not getting any closer, or if your forecasts are moving in the wrong direction, you may have to make adjustments to get back on track.

Of course, there may not be anything you’re doing wrong as a small business owner. There might be hiccups in the economic environment that make it more difficult to increase revenues or keep expenses under control. 

However, even in a difficult business climate, financial forecasting will give you a picture of where you stand. It might even suggest some improvements to help you cope with the difficulties.

Work Closely with an Accountant

Financial forecasting can be challenging. Your forecast is only as good as the data you start with and the assumptions you make. 

An accounting partner such as Argento CPA can help guide you through the process. We’ll look at the data you’re using and assess its accuracy. We’ll help you generate a financial forecast based on your history and your current financial status. Once you have that, we can work together to set realistic goals based on the forecast, the business climate, and your aspirations for your business.

We’ll continue to check in regularly with you as you track your progress, and we’ll help you identify the actions that are most likely to lead to success. 

Contact Argento CPA and learn how an experienced accounting company can help you use financial forecasting to reach your goals.

It’s that time of year again: tax time.

If you’re like other entrepreneurs, the next couple of months will be stressful. In fact, studies show that roughly 50% of business owners worry about their taxes each year. 

While it’s common, worrying doesn’t have to be a part of your tax time routine. With the right preparation and strategies in place, you can have confidence money will be saved and your taxes will be paid without a hitch. 

Here are a few pointers to help you cover all the bases and make sure you are prepared and confident heading into tax time.

Minimize Corporate and Personal Tax Before Tax Time

To ensure you enter tax time with confidence, know what you need to do to minimize your personal and corporate tax. 

Conduct a Dividends vs Salary Analysis

Paying yourself via dividends or a salary will affect how much you’re required to pay in taxes. 

If you choose to pay yourself a salary or wage you can consider your pay as a company expense. This route lowers the taxable income your company is required to pay. Although, you will have to claim your pay as income. This will subject you to paying more in personal tax and requires you to pay into your CPP. However, paying yourself a salary increases your RRSP contribution room so that you can make RRSP contributions which are tax deductible.

If you choose to pay yourself via dividends, you will be collecting investment income and are taxed more in the company and less on your personal tax return due to personal dividend tax credits. From the business side, you cannot claim dividends as an expense and consider yourself a shareholder rather than an employee. 

A primary point to consider when choosing between dividends or salary is retirement. If you do not want to pay into the CPP, dividends are a better choice for you. However, it’s advised you have an alternative retirement plan in place if you take this route. 

Use Tax Deferrals When Possible During Tax Time 

To help minimize your personal tax, be sure you are contributing to tax-deferred accounts. 

Tax deferral accounts do not require you to pay taxes on your contributions until a later date. This means as your money grows in the accounts, you will not have to worry about tax implications. 

Incorporate the Shareholder Loan 

The shareholder loan is the total owner cash draws from your company minus funds you have contributed. If you’ve contributed more than your cash draws, it will be marked as an asset on your balance sheet. If you have contributed less, it will be considered a liability. 

Transactions that affect the shareholder loan include: 

• Cash contributions
• Paying for company expenses with a personal credit card
• Cash withdrawals
• Paying for personal expenses with company funds

When you use the shareholder loan, you do not have to pay taxes on the money you withdraw until the end of the fiscal year. If it falls as an asset at the end of the year, you declare it as either dividends or salary. You can incorporate the shareholder loan into your tax plan to minimize tax implications. 

Review Your Future Personal Expenses

A key step in crafting a tax plan that helps you minimize your personal taxes as well as your corporate taxes includes planning out future personal expenses. When you do this, you can schedule your spending so that you are getting the most out of your company in the process. 

Take Advantage of Deductions and Credits

There are hundreds of deductions and credits business owners can qualify for. To claim your credits and deductions, you’ll need proof you qualify. Meaning you need to keep your business records organized and easily accessible. In some cases, you’ll have to present the proof with your taxes, and in others, you’ll need to keep it on hand in case you’re audited.

Talk With Your Accountant Before Tax Time

Now is the perfect time to ensure you are minimizing your corporate and personal tax. If you’re unsure of how to implement or build a tax plan that includes the above strategies, turn to a trusted accountant. 

They’ll:

• Answer questions you have about taxes.
• Proactively ensure you claim every benefit you’re entitled to.
• Help you build a strong tax plan.
• Provide you with a dividends vs. salary analysis
• Incorporate tax-saving strategies into your tax plan. 
• Ensure you pay everything you owe, but nothing more.

When you have the right accountant, they’ll not only help you through tax season but also work with you throughout the year to manage your finances and improve your profitability.You didn’t start your business to work non-stop on accounting. If you’re looking for a partner to help with your business finances, it’s time to call Argento CPA, the accounting partner you can trust for financial advice and guidance at tax time and at all times. Set up a meeting with us today!

Setting an intention, or your company’s vision, for all your actions is often referred to by productivity experts as one of the best ways to make sure you reach your goals. 

By setting an intention, you can align all your actions to your goals, and everything seemingly starts falling into place. That’s great for individuals, but is there a way that a company can do that? The answer is yes. 

A company’s vision is how you define your intention. It’s a guide to lead you toward your business goals. When done correctly, it will drive your business forward. Unfortunately, many companies, in particular, smaller ones, tend to omit investing time into defining their vision. 

This article will give you a step-by-step guide to building a strong vision for your company.

Importance of a Company Vision

The biggest challenge every organization has is focusing their actions in the same direction to achieve their objectives more effectively. 

Team members on every level tend to focus on what is in front of them, rather than how their work relates to the big picture. While this is great from an individual perspective, it creates a problem when it comes time to make decisions or find solutions. Ideas stem from a limited vision of what matters to the company, since they can only see what impacts their job. 

A company vision is a tool for every team member, regardless of the work they do, to use to focus their actions towards a common goal. This means, when it comes time to make a decision, the company vision can be used as a guide to cross-reference your findings and have the confidence you are taking the best course of action. 

How to Build Your Company’s Vision

There are many approaches you can take to building your company’s vision. This is why creating one can be so tricky. There is an overabundance of options, and business owners often want to write the perfect vision. 

The reality is there is no perfect vision. In most cases, it will be an idea that evolves as your company grows. However, laying the groundwork is essential. 

Step 1: Set a Time Frame

Company visions don’t need to be set in stone. A more pragmatic way to approach them is by setting a time frame for the current vision you are developing. 

Creating an exceedingly long vision can be vague and not very practical to reference. A best practice is to look at either 1, 3, 5, or 10-year time frames to develop your vision. No matter the time frame, you want it to be meaningful for your organization. 

For example, crafting a 10-year vision can sound daunting. It’s a big stretch goal and visualizing how to get there likely won’t be easy. However, you should use your 1, 3, and 5-year visions to make your 10-year vision more reachable with a shorter timeline perspective.

Step 2: Ask Yourself Lots of Questions

Once you have a time frame, you need to ask yourself many questions to pinpoint where you want your company to go. 

Here are some helpful questions to ask:

• Where do you see your company heading?
• Are your business goals attainable?
• What do you want your company to look like?
• How do you, your employees, and outsiders view your company?

Step 3: Consult with Your Team

Even though you should lead the initiative, it’s essential to consult your team. The vision statement will be useful to everyone in your organization, so having their feedback while developing it will help make sure everyone sees it in the same light and bring you some clarity. 

Step 4: Write a Draft, Edit, and Finalize

It is unlikely that you’ll get the perfect version of your vision on the first try. For this reason, start with a draft and build your vision around it by adding and subtracting as you go. Make several edits and experiment with different choices of words until you find the version you want to stick with.

Also, give your team time to make edits. This will help you test if you like it and if it will fit your business culture. Taking a look at it with fresh eyes is another great way to ensure you are happy with your vision. If you need to step away for a while, do it! 

Step 5: Share Your Company’s Vision and Uphold It

Now that you have your company’s vision finalized, it’s time to put it to work. So the next step is sharing it with your whole team. This includes:

• Employees
• Investors
• Customers

Sharing your vision will make sure that everyone understands the why behind your actions and give them the confidence that you have their best interest in mind. 

Also worth mentioning is that you need to choose the best way to communicate your newly developed vision. Don’t just publish it on your website and call it a day. Invest enough time to make sure everyone understands what drives you, and that way, your vision will become apparent to everyone. 

Need More Time to Work on Your Company’s Vision?

One of the reasons why business owners don’t develop their company vision is because they don’t have enough time to get it done. It becomes a case where the urgent tasks don’t leave enough time for the critical tasks. They also often lack guidance for building a vision that will support their business. 

When you work with Argento, not only will we handle your finances to free up your bandwidth, we will also consult with you to help you find out what your vision is and create strategies your business can use to reach it. 

Contact us to learn more about how Argento CPA can drive your business!

With ever-shifting workplaces, a strong culture has quickly become a coveted aspect for any business. 

Having a healthy culture comes with many benefits, the most important being employees who enjoy working for you. 

However, getting to this point takes work, and it definitely doesn’t happen overnight. You need a good understanding of what a strong culture is and a process for creating one. 

Importance of Creating a Strong Culture For Your Team

The culture of your team defines your business’s identity. A strong culture sets the tone for how everyone views your business, from the inside and out. For your culture to serve your identity in a positive way, you need clear values, goals, etc. Without them, your business’s identity will be lost.

Building a strong culture for your team will result in higher employee retention. When an employee feels like they are an asset to a strong team, they are more likely to stay with the business. 

In a team-centered atmosphere, the desire to perform well is heightened. Meaning a strong culture that focuses on teamwork improves employee performance. Because everyone knows what is expected of them, better work gets done.

Characteristics of a Strong Culture

The characteristics of a strong culture vary from business to business, so pinpointing exact traits isn’t easy. However, most cultures place emphasis on:

• Working from a unified point of view
• Communicating in an effective and constructive manner
• Having a clear and defined purpose for its members
• Offering room for employees to learn and/or training in their professions

When you break those traits down, you’ll see effective communication, clear expectations, and growth at the core of nearly every strong culture. 

How to Build a Strong Team Culture

Like anything in your business, building a strong culture requires implementing a process and following through with each step. 

It takes time, however, when you do spend the time to create a strong culture, you’ll see tremendous improvements in your team.

Define Your Ideal Culture

You and your team need to know what is expected of them. You should take the time to set clear goals and values. Once they are set be sure to make them known. It’s helpful to provide examples of exactly how your team members can implement your values into their work. 

Consider creating a 90-day plan for defining and implementing your ideal culture. Use this time to develop training materials and guidebooks along with videos and web-based content for employees to access that outline your ideal culture. Proving resources gives employees on-the-go access to information if there is ever a question.

Hire People Who Fit Your Ideal Team Culture

You build your team. As you hire, make sure the people you are adding will work well with and reinforce your ideal culture. You can do this by explaining your expectations and determining whether or not you think they can uphold them. Send potential hires away with your resources outlining the cultural expectations and when you have them in for an additional interview, ask them if and how they think they will fit into the culture. 

The importance of making good hires can’t be stressed enough. Not only does hiring the right people save you money, but your culture is greatly affected by the members of your team. One bad addition can throw off the whole team. 

Reinforce Your Ideal Culture

Simply suggesting and explaining your culture isn’t enough. You need to continually show your team that your cultural expectations are important, that you care about building your culture to be strong and successful. 

You can reinforce your culture by: 

• Conducting regular culture reviews with employees
  • Ask them if they see your ideal culture coming to fruition and how you can make improvements to benefit the team.
• Making sure you exhibit and explain the culture you expect your team to demonstrate
  • A strong culture is only as strong as its leader. You should be showing your team how to function in your ideal culture.

Be Open to Change

As time goes by, your team changes and your business grows. You’ll start to see a shift in what’s required to maintain a strong culture. As your business and employees grow, make sure you are helping your culture grow with it. What worked a year ago may no longer work in today’s workplace. 

A static culture, with no growth and adaptations, opens the door for a weak culture and a business with a loss of identity. 

Work With a Trusted Accountant

It takes effort to build a strong culture for your team, however, it is an essential aspect of a successful business. Don’t let refining this process be placed on the back burner. Take some time to build a strong culture that you, your team, and your customers are proud of.If you’re searching for ways to free up time so you can build a strong culture, consider passing your finances on to a trusted accountant like Argento CPA. We will handle the heavy, back-office work and keep your business on track financially, while you improve it culturally.

Wanting to improve profitability but not sure where to start? Check out these efficient, reliable, and proven ways to accomplish this vital business goal of increasing profit!

1. To Improve Profitability, Invest in Your Staff

When you hire someone, you expect them to make more money for the business than you have to pay them. This becomes profit. However, a fine balance exists here both ethically and practically. If you tip the scale too far, people may feel undervalued.

Your people are worth the investment. You’ll have better morale. They can see how their work directly contributes to success. This better work environment will attract more dedicated people like them.

With that said, this isn’t just about throwing extra salaries at people. Adequate pay is only a small part of this equation. Make sure they are:

• Onboard with your mission
• Well-trained
• Goal-oriented
• Happy in the workplace
• Receiving proper compensation
• Aware of how their success leads to the success of the business

According to Ray Dalio, “meaningful work and meaningful relationships emerge when you assemble high-performing teams and push them to engage in rigorous and thoughtful inquiry”. In other words, the more you invest in your team, the more successful everyone involved will be.

2. Minimize Costs

You bring in profit after all expenses are paid, so naturally, decreasing costs will improve profitability and cash flow. It’s essential to track and understand your spending trends to identify how to cut costs without sacrificing quality.

Often, this involves streamlining, better reporting, automation, and ensuring you’re spending in areas that deliver the highest ROI.

You’ll want to take a look at:

• Cost of goods sold
• Marketing costs
• Production costs
• Labor costs
• Vendor contracts

Treat no budget area as if it’s sacred because you can find waste and streamline opportunities almost anywhere you look. Compare your budget to actuals, to identify room for improvement.

3. Reevaluate Your Client Base

Make sure you are serving your ideal clients. Courting the wrong leads and clients increases the length of time it takes to nurture a lead into a customer. You’ll have a lower customer-to-lead ratio, increased customer acquisition costs, and you’re more likely to end up with paying customers who aren’t really a good fit, so they leave and may write bad reviews on the way out.

Here are what you want: Mutually beneficial relationships with clients.

Cut ties with clients that aren’t working well with you. They’re more work than they’re worth. Dig into your niche and find clients you love and fit with your business.

4. Automate Where You Can

Automation speeds up everything and can inevitably improve profitability. It reduces error rates, improves the client experience, and despite what naysayers might claim, it leads to a happier workplace because people are working in an environment where workflows work consistently.

All this makes your business more efficient.

Furthermore, you can save money from:

• Not having to hire someone to take care of manual entries
• Not having people compile or transfer data from multiple sources, reducing error rates while delivering you more real-time information
• Not spending your valuable time doing manual entry when you could be running your business

These days, you can automate a lot of things that once caused employees and bosses a lot of headaches:

• Bookkeeping
• Client onboarding
• Payroll
• Lead generation
• Inventory management
• And more

5. Run a Market Analysis – and Make Adjustments to Improve Profitability

Market analysis shows you how to be more competitive in your market. It allows you to benchmark your performance against competitors to understand what’s possible and better position your product in the market to gain a competitive advantage.

You’ll want to look at:

• Competitors
• Prices
• Demand

6. Focus on Customer Service

The way you interact with customers can make or break your business. The work you put in behind the scenes will eventually prove to be profitable in the long run.

Work to deliver a quality product at the right price point. Make sure your customers feel you’re listening to them. Make sure you’re taking care of the technical aspects of customer experience like call wait time, resolution time, quality control.

This is how you retain ideal customers.

The average profit margin on selling to an existing customer is 60-70% while selling to a new customer is 5-20%. Existing customers are 50% more likely to buy your new products and will spend 31% more. 88% of buyers read reviews of other customers before choosing to buy.

All of this adds up to profit.

So ask yourself: How can you improve your customer service?

7. To Improve Profitability, Partner With a Trusted Accountant

You’re running your business and working hard to increase profits. While doing this it’s easy to miss low-hanging fruit in the above areas of your business. A trusted accountant can read the story or your financial statements and help you identify where to focus your efforts.

Who wouldn’t want an experienced and knowledgeable right-hand giving you all the financial information you need to make your business successful? When you work with a trusted accountant, you’ll get plenty of profitability improvement strategies and guidance. We can suggest automation apps, help with market analysis, and find areas to minimize cost.

For help increasing profits through smart financial strategies, consider Argento CPA.