Perhaps as a small or new business entity you feel like you are being swallowed up in a mountain of paper. Even though you are computer savvy and you are using a ton of software for your business entity you still have a lot of hard copies of business papers to deal with.
Amongst all of these paper whether in electronic form or in hard copy that is very important to you is your financial statements which consist of your Income/Loss Statement and your Balance Sheet.
These are two documents that a good tax accountant relies on to prepare your business tax return. The CRA has set rules of what they demand in regards to information and you could say that these two very important documents are the window of your business.
It means of course that they must be totally accurate. A lot of people don’t have too much difficulty preparing their profit/loss statement but get lost when it comes to the balance sheet, even though the formula for preparing this is relatively simple. It is your Assets = Liabilities + Shareholders’ Equity.
You may have heard the cliché “pocket poor-paper rich”. What this means is that you may not have actual money in your pocket but when you look at the balance sheet it may show that you are substantially well off with your assets.
It all begins with your keeping good track of all of your financial records like your expenses and sources of income. Then a knowledgeable individual like a bookkeeper who knows how to itemize each of these so in the end they will end up on the proper financial statement.
If you don’t know a lot about taxes you may just assume if you have to buy something that it is automatically an expense and you can just claim it as such in the year you buy it. This is not always the case. In some instances you are not allowed to claim the entire cost of the item, and what you pay for it is broken down or a period of years, or by depreciation value.
You really didn’t think that tax accounting was going to be that simple did you? This is just one of the many reasons that most companies no matter what their size will rely on bookkeeping services followed by utilizing the expertise of a tax accountant. There are a lot of different steps that involve proper tax filing for business and unless you are prepared to spend many hours studying the applicable laws and formats then best you give Sam Seidman a call and let him handle your taxes for you.
