Small Business Accounting Tips to Help Maximize Profits

You may be paying attention to the revenue coming in and the invoices that need to be paid out. However, especially for small business and start-up businesses, there is a lot of cash flow that does not get properly recorded. Your business finances should be kept in careful records. This makes it easy for you to not only see where the money is coming from, and going to. Most important, this will also make tax time much less stressful. Small businesses should utilize these simple accounting tips that will keep their business finances in order and up to date very efficiently.

Accounting Tips For Small Businesses:

1.) It’s common for many small business people to have their personal expenses blended with their business expenses, but these two should always be kept separated. Set up specific accounts just for your business from bank accounts to credit cards. This will save you a lot of time and stress during tax season guaranteed.

2.) Get all your expenses carefully organized. Paying with a business credit card for most purchases will make tracking your expenses easier and will cut back on the paper receipts you need to file. If you do need to use cash for any purchase be sure to get the receipts and file them digitally. This way you keep everything organized and in one location.

3.) Revenue is also one area you want to carefully organize. Make sure you know where all your cash coming into your business is coming from and keep accurate records. Not doing so could cause you to pay more in income taxes than necessary.

4.) You should have a dedicated day each week for updating your books. Keeping accurate and updated books is the best way to stay organized and on top of your business finances.

5.) Keep accurate records of your merchandise as well. You want to keep track of when you restocked, how much merchandise you have on hand. And how much you sold. This can easily reveal where merchandise may be misplaced, lost or even stolen.

6.) Make sure you follow-up on invoices and accounts receivable. With the many other aspects you have to focus on in your business it can be easy to forget or let go some unpaid invoices for long periods of time, but these can cost you in time and money. Make sure you send reminders or call about payments still owed to you.

7.) Small business should always hire a professional accountant to help with their financial organization. The accounting area of your business can be a complicated area to understand and you want to make sure you are not missing information. And that you are calculating the right taxes. An accountant can easily show you where you can benefit from tax deductions, keep your records up to date and help you understand your businesses finances better.

Small business owners should pay special attention to their finances. This is especially important in the first year of operations. With these tips you can better keep your business finances organized and up to date.

Business Negotiation Tips For Small Business

Negotiations are things we do almost every day of our lives. However, many of these negotiations do not make much difference to us in the big picture, so we tend to take them lightly. However, when you are negotiating for the business as a small business owner, then it will be very useful if you follow the business negotiation tips for small businesses. These are very important for getting the outcome that is beneficial for everyone concerned. A successful business negotiation can make a great difference for you and your business.

Do Not Shy
The very first business negotiation tip for small businesses is that you should be willing to negotiate. There is no point in avoiding talking about money. At other times, people may be right when they believe that it is demeaning and rude; but when a business negotiation is going on, you cannot afford to be unwilling to talk about money. On the contrary, it may become an expensive affair.

Do Not Show Emotions
Another business negotiation tip for small businesses is that you should not involve yourself emotionally in the deal. Attaching yourself emotionally to win the deal will produce a negative impact. Emotionally involved people even start shouting, threatening and wanting to get their way by using any means necessary, resulting in a negative exposure of their image. Here, you should keep in mind that a deal can take place only when both parties believe that they are gaining something from it. On the contrary, such intense emotional behavior may force the other person to walk away from the table.

Don’t Be Deceived By Rules Tricks
One more business negotiation tip for small businesses is to not let the other person deceive you by showing you any type of rules. For example, if you make some changes in the contract before signing it and the other party tells you that you cannot make such changes, then you are stuck. In this situation, you must tell them categorically that since both the parties are signing the contract, it is not possible that only one party has the rights to make changes in the contract. Many experienced negotiators use these tactics because they understand that most of the people do not wish to break any rules. If it happens to you, then ask the other person to show you the proof of existence of such rules. However, if the other party has any objections, then they can be resolved by sitting together.

A very important business negotiation tip for small businesses is that you should not open your mouth first when it comes to naming the figure. For successful business negotiation, you must learn how to make the other person say the figure first. Once he speaks his mind, ask for an even better figure, even if it is above your expectations.

The Top 3 Small Business Internet Marketing Tips

I could spend the next few weeks covering the vast amount of small business internet marketing tips I feel are beneficial, but I decided to outline the top three to help your campaigns. These principles, though familiar, seem to escape the minds of business people everywhere. If you can succeed with this information you will put your business ahead of the 90% of marketers who do not utilize their time effectively.

Don’t Market to Credit Cards

Of course, you are not marketing directly to a piece of plastic, but you would be surprised by how many marketers completely deter from the true purpose of business and tailor their communications around people’s money. Your prospects are smarter than you think. If you would not buy from you, why would they? If all you can think about is filling your pockets, whether you are conscious of it or not, your communication will reveal your inner attitude.

I understand the reason you are in business is to make money but if you are not intent on providing value as well, you might as well close up shop. One of the best small business internet marketing tips I could give you is to keep the mind and thought process of your prospects close to you at all times. Approach your campaign from their point of view and you will never be disappointed.

Content is King

You have definitely heard this one before, but are you really utilizing content to its full benefit? Content on the web is more than just a small article. It comprises blog posts, videos and even podcasts. How much content do you have out there on the internet? It’s a big space and the more content you can produce, the greater chance someone will find it. Keep your content campaigns targeted and continuous and you will see how your business grows over time. Providing content is one of the most basic small business internet marketing tips but few people actually carry it out to the level that is needed to see maintained success.

Track Your Progress

How is your website doing? Where are your visitors coming from? How long are they staying on your site? If you are not tracking your progress you are like a cross country traveler without a map. How will you know what is working and what isn’t? You will never achieve success in your business if you don’t track your visitors and understand your market intimately.

These small business internet marketing tips are crucial for online success. Though simple, they provide the proper foundation for any business to make incredible profits and stay ahead of the competition.

10 Best Tax Tips For Small Business

Tax is the biggest expense for most small businesses. Yet most small businesses don’t have a plan to reduce the amount of taxes that they pay. To stay competitive and profitable, it’s imperative that your small business reduce its tax expense.

Below, I’ll share the 10 Best Tax Tips that your small business should implement:

1. Income Splitting with Your Spouse

Consider paying your spouse a salary of the work that he/she performs in your small business. The amount of salary paid must be reasonable in relation to the hours worked and type of work. For example, it would be unreasonable to pay your spouse $100 per hour for 8 hours a day, when your spouse only works 3 hours a day in an administrative capacity.

By income splitting with your spouse, the overall taxes paid will be reduced.

2. Dividend Sprinkling – by Accountant in Mississauga

As an Accountant in Mississauga, I recommend that you pay dividends to your family members who over the age of 18. The first $38,000 (approximately) of dividends that an individual receives is completely tax-free.

Kiddie tax of 46% is applied to dividends paid from private companies to children under the age of 18, effectively defeating the purpose of income splitting with minors.

3. Home Office Expenses

As a small business owner, you can write off expenses related to your home office, if you work from home. These expenses include:

o Mortgage interest
o Utilities
o Condo fees
o Property taxes
o Maintenance and repairs
o Rent (if you’re renting your home)

The following formula is used to determine the portion of the home office expenses that can be deducted for tax expenses:

Expenses relating to home listed above x (Total Square Feet of Home / Square Feet of Home Office)
You should consult with your Accountant in Mississauga before deducting your home office expenses, as certain other limitations apply.

4. Tax Free Automobile Allowance

If you own an automobile for which you use for business purposes, you should have your corporation pay yourself a tax free automobile allowance. The Canada Revenue Agency (CRA) will allow a corporation to pay a tax deductible allowance of 52 cents per KM for the first 5,000KM and 46 cents per KM thereafter for kilometres driven for business purposes to an employee of an corporation to compensate him / her for use of their automobile.

The automobile allowance received by the employee is completely tax free.

5. Meals & Entertainment – by Accountant in Mississauga

Expenses that you incur for entertaining your clients are taking your clients out for lunch/dinner are 50% tax deductible. Make sure you tell your Accountant in Mississauga to keep track of those meals and entertainment receipts!

6. Business Promotion Expenses

Business promotion expenses, such as gifts to clients, marketing materials, and promotional items (e.g. company pens, calendars, etc.) are 100% tax deductible by your small business.

7. Tax Depreciation – by Accountant in Mississauga

Tax depreciation (also know as capital cost allowance) can be deducted in respect of the capital assets owned by your small business corporation. The tax depreciation permitted as a tax deduction is calculated as a % of the cost of the asset, at rates stipulated by the CRA:

o Furniture & Fixtures – 20%
o Buildings – 6%
o Computers – 100%
o Software – 100%
o General office equipment – 20%
o Manufacturing Equipment – 25% first year, 50% second year, 25% third year

You should speak with your Accountant Mississauga about maximizing your small business corporation’s tax depreciation.

8. Small Business Deduction

Small business corporations in Canada receive a special tax deduction on the first $500,000 of business profits, which effectively reduces the federal income tax rate to only 11%. Canadian provinces also have a small business deduction.

9. Any expenses incurred for business purposes

The Canadian Income Tax Act stipulates that any reasonable expense incurred for the purpose of earning income from business is tax deductible. There are certain exceptions, however, such as meal and entertainment as discussed above.

Therefore, as long as the amount of the expense is reasonable and the purpose of incurring the expenses was in relation to your business, the expense should be tax deductible.

10. Hire an Accountant!

Last, but not least, you should hire an accountant to manage the books of your small business and to provide you with valuable tax advice. The fees that you pay your Mississauga Accountant (or other accountant) will be more than offset, by the tax savings identified by your Accountant.