INCOME TAX SERVICES YEAR-END ACCOUNTING BOOKKEEPING FIRMS 514
514 Accounting Inc Montreal Accounting Firms Services - Small Business Bookkeeping | | Call Us Today for a FREE CONSULTATION 514 712-385-ONE | | We offer Affordable, Professional & Personalized Accounting, Bookkeeping & Tax Services We are the alternative to high-end accounting firms and cater to start-up, small and Medium-Sized Businesses.
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Our services are the following (but not limited to): Personal Income Tax Services: • Personal income taxes (T1 Federal & All Provincial) • Tax planning & strategies • Self-employed returns • Sole proprietorship & partnerships • Capital gains and investment income • Rental property income • Prior year tax returns
Corporate Tax and Accounting Services (but not limited to): • Tax planning & strategies • T2 Corporate Tax Return Preparation • Payroll • Monthly and Quarterly Bookkeeping • Financial Statement Preparation • GST, QST, PST & HST return preparation • Cost reduction strategies for small business • New business set up for startups | | What Is Accounting? Accounting is the process of recording financial transactions pertaining to a business. The accounting process includes summarizing, analyzing, and reporting these transactions to oversight agencies, regulators, and tax collection entities. The financial statements used in accounting are a concise summary of financial transactions over an accounting period, summarizing a company's operations, financial position, and cash flows.
How Accounting Works Accounting is one of the key functions for almost any business. It may be handled by a bookkeeper or an accountant at a small firm, or by sizable finance departments with dozens of employees at larger companies. The reports generated by various streams of accounting, such as cost accounting and managerial accounting, are invaluable in helping management make informed business decisions.
KEY TAKEAWAYS Regardless of the size of a business, accounting is a necessary function for decision making, cost planning, and measurement of economic performance measurement. A bookkeeper can handle basic accounting needs, but a Certified Public Accountant (CPA) should be utilized for larger or more advanced accounting tasks. Two important types of accounting for businesses are managerial accounting and cost accounting. Managerial accounting helps management teams make business decisions, while cost accounting helps business owners decide how much a product should cost. Professional accountants follow a set of standards known as the Generally Accepted Accounting Principles (GAAP) when preparing financial statements. The financial statements that summarize a large company's operations, financial position and cash flows over a particular period are concise and consolidated reports based on thousands of individual financial transactions. As a result, all accounting designations are the culmination of years of study and rigorous examinations combined with a minimum number of years of practical accounting experience.
While basic accounting functions can be handled by a bookkeeper, advanced accounting is typically handled by qualified accountants who possess designations such as Certified Public Accountant (CPA) or Certified Management Accountant (CMA) in the United States. In Canada, the designations are Chartered Accountant (CA), Certified General Accountant (CGA), and Certified Management Accountant (CMA); however, all three will be unified under the designation Chartered Professional Accountant (CPA) in the near future.
The Alliance for Responsible Professional Licensing (ARPL) was formed during August 2019 in response to a series of state deregulatory proposals making the requirements to become a CPA more lenient. The ARPL is a coalition of various advanced professional groups including engineers, accountants, and architects. Types of Accounting
Financial Accounting Financial accounting refers to the processes used to generate interim and annual financial statements. The results of all financial transactions that occur during an accounting period are summarized into the balance sheet, income statement, and cash flow statement. The financial statements of most companies are audited annually by an external CPA firm. For some, such as publicly-traded companies, audits are a legal requirement. However, lenders also typically require the results of an external audit annually as part of their debt covenants. Therefore, most companies will have annual audits for one reason or another.
Managerial Accounting Managerial accounting uses much of the same data as financial accounting, but it organizes and utilizes information in different ways. Namely, in managerial accounting, an accountant generates monthly or quarterly reports that a business's management team can use to make decisions about how the business operates. Managerial accounting also encompasses many other facets of accounting, including budgeting, forecasting, and various financial analysis tools. Essentially, any information that may be useful to management falls underneath this umbrella.
Cost Accounting Just as managerial accounting helps businesses make decisions about management, cost accounting helps businesses make decisions about costing. Essentially, cost accounting considers all of the costs related to producing a product. Analysts, managers, business owners and accountants use this information to determine what their products should cost. In cost accounting, money is cast as an economic factor in production, whereas in financial accounting, money is considered to be a measure of a company's economic performance.
Requirements for Accounting In most cases, accountants use generally accepted accounting principles (GAAP) when preparing financial statements in the United States. GAAP is a set of standards and principles designed to improve the comparability and consistency of financial reporting across industries. Its standards are based on double-entry accounting, a method in which every accounting transaction is entered as both a debit and credit in two separate general ledger accounts that will roll up into the balance sheet and income statement.
Example of Accounting To illustrate double-entry accounting, imagine a business sends an invoice to one of its clients. An accountant using the double-entry method records a debit to accounts receivables, which flows through to the balance sheet, and a credit to sales revenue, which flows through to the income statement.
When the client pays the invoice, the accountant credits accounts receivables and debits cash. Double-entry accounting is also called balancing the books, as all of the accounting entries are balanced against each other. If the entries aren't balanced, the accountant knows there must be a mistake somewhere in the general ledger.
History of Accounting The history of accounting has been around almost as long as money itself. Accounting history dates back to ancient civilizations in Mesopotamia, Egypt, and Babylon. For example, during the Roman Empire, the government had detailed records of their finances. However, modern accounting as a profession has only been around since the early 19th century.
Luca Pacioli is considered “The Father of Accounting and Bookkeeping” due to his contributions to the development of accounting as a profession. An Italian mathematician and friend of Leonardo da Vinci, Pacioli published a book on the double-entry system of bookkeeping sometime between 1470 and 1517.
By 1880, the modern profession of accounting was fully formed and recognized by the Institute of Chartered Accountants in England and Wales. This institute created many of the systems by which accountants practice today. The formation of the Institute occurred in large part due to the Industrial Revolution. Merchants not only needed to track their records but sought to avoid bankruptcy as well.
Accounting software is a necessity when trying to run your own business, and the sooner you implement a good solution the better. Otherwise, you can find yourself struggling through piles of receipts while hurtling toward a tax deadline.
If you're not sure which accounting software to use then there are free options available, so you don't have to commit to something you may find difficult to use. Free accounting software will at least get you used to Using various features so you have a better idea of what you're doing, and what you need.
It is such a good idea to have something in place and organized at the start of your business for managing your accounts, and if you have to change later you can usually export the data into whichever program you decide to switch to. In the meantime, here we'll feature the best in free accounting software to get you started on your journey.
Hire an accountant when you have to deal with the government It can be daunting dealing with government paperwork when you run your own business. This is why so many small business owners hire an accountant when the first tax filing is due.
But they can also help you cope with more than just tax returns. They can help your company interact with the government in other ways.
A good accountant will be able to:
Complete and file the required legal and compliance documents for your business Keep your company up to date with the latest tax laws Prepare annual statements of accounts Keep your company's status updated in the government's company register Maintain records of directors and other administrative personnel Organize and record share/stock allocation, such as when the business is formed when a business partner leaves or a new partner joins Handle your payroll and ensuring that all employees' tax codes and payments are recorded correctly. Preparing your tax documents correctly could save you money – perhaps more money than your accountant charges you. And a good accountant will use their knowledge of tax laws and legislation to suggest ways you can free up cash flow, save money and raise capital for expansion.
Challenges for growing small businesses There are good reasons for hiring an accountant at different stages of your company's growth. From a business plan to company formation, loan application to government audit, an accountant can make life easier for you at each step.
That doesn't mean you always need to employ an accountant full-time or hire one on a retainer basis. Sometimes just a couple of hours of their time will be enough.
Like all small business owners who are looking to save money, you may think you can’t afford an accountant. But look at how long it would take you to do certain tasks (such as taxes), and ask yourself, is that a good use of your time?
For example, let’s say it takes you 10 hours to do your taxes, and your time is worth $100 an hour. That’s a cost of $1000 to do your taxes yourself. And there’s always the risk you’ve made errors – especially if you’re multi-tasking like most business owners.
However, if you get an accountant to take care of time-consuming tasks like taxes, it’s quite likely they will cost less per hour than you would pay yourself. You’ll not only have extra time to free you up to generate revenue, but you’ll have peace of mind that an expert is taking care of the details.
So what other moments during the life of a typical small business, might you want to hire an accountant to help you?
You’ll need advice when you write a business plan If you involve an accountant while you're writing your business plan, they will be able to use accounting software to add financial projections and other reports to it. This will help you create a business plan that's realistic, professional and more likely to succeed.
Hiring a professional at this early stage will mean you get the benefit of their financial knowledge and advice right from the start. That could save you time and money compared with hiring one later.
You’ll need advice about your company’s legal structure Not all businesses have the same legal structure – there are different types that are determined by a number of factors. Some might be called limited companies, limited liability partnerships or corporations, others could be sole traders or proprietors. These vary from one country to another.
You should carefully consider each type before deciding which one best suits you. For example, you may do business as a sole trader or sole proprietor, working on a self-employed basis and invoicing under your own name. If this is the case, you might be able to offset some of your living expenses against tax.
However, this also means you could be held personally liable for any business-related obligations. If your business fails to pay a supplier, defaults on a debt or loses a lawsuit, the creditor could legally come after your house or other possessions.
With a limited liability company structure, it's different. As the name suggests, the liability of the business is limited to the assets owned by the business, not you personally (though there may be exceptions in some circumstances).
An accountant can explain the legal business structures available and help you choose the one that best suits you.
You’ll need an accountant to help with the finances Small business accounting can quickly become complex if you do it on your own. If you feel you're losing control of who owes you money and how much, an accountant can help you get back on track.
You may also want to measure key business metrics, such as the ratio of salaries and other employee payments to total revenue. An accountant can help here by managing your payroll and producing graphs so you can see how the ratio changes over time.
If your accountant uses cloud-based accounting software, they'll be able to share your business accounts with you quickly and easily. And they can produce tables and charts that will help you understand your company's current financial situation at a glance. This will help you monitor the pulse of your business and keep track of important things like cash flow.
Hire an accountant when you're ready to delegate As a small business owner, no doubt one of the things you like best is that you have control. You can set your own working hours, craft your business strategy, regulate your workload (at least to some extent) and determine your own finances. And being the master of all of these things is a wonderful and liberating feeling.
But sometimes it can stop you from delegating. Business owners can feel overworked, partly due to a reluctance to allow other people to help out. You might feel that no one can possibly know your business as well as you do, therefore nobody can handle any part of your business as well as you can.
Inability to delegate can mean you’re left feeling overworked and stressed. At some point, you will have to let go, and learn to trust other people to handle some parts of your business so that you can look after the rest.
Delegating your company's financial affairs is a good start. You need to choose the right accountant and make sure you trust them with your company's financial information. Once you've handed over your company's finances to someone more experienced in accountancy than you are, you will have more time to concentrate on other aspects of your business.
Some of the most successful business owners in the world are experts at delegating work to the right people – so try to learn from them.