Archive for the ‘Uncategorized’ Category

Introducing: Plooto!

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No, it’s not a planet. But if you’re a small business owner, Plooto may just change your world.

Plooto is a cloud-based technology that allows you to streamline repetitive, monthly bookkeeping tasks so you have more time to grow your business. When you connect Plooto to your cloud accounting software great things happen. Here are a few we wanted to share.

Pay vendors with your money, not your time

After some simple set up, you can auto-load upcoming accounts payables (bills) which saves you valuable time each month.

  • Customize payment approval – with a click of a button, anytime, anywhere.
  • Transfer money via email – from your bank to their bank, directly and securely.
  • Pay vendors easily – using only their email address, no login required or storing of confidential or sensitive information.
  • Payment continuity – allows you to pay anyone, anywhere with no surprises or confusing interfaces.
  • Payment records are automatically updated – without you having to match payments with invoices.

Make paying you foolproof

Plooto ensures that paying you isn’t frustrating for your clients. This helps your cash flow to – well, flow.

  • Getting paid through email – lets clients log into their bank account to schedule a payment.
  • Accepting credit cards – without having to share sensitive credit card information.
  • Accepting pre-authorized debit – ensures clients pay you on time, every time.
  • Payment status – allows you to see if your client opened your email and can gently remind them if they haven’t paid.  

So, while Pluto may have been decategorized as a dwarf plant, Plooto cloud-based software is hardly small or insignificant in comparison to other accounting software. Call us today to learn how you can start letting Plooto work for your business.

Cloud-Based Payroll Apps – TO THE RESCUE!

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We all enjoy getting paid. However, the process to ensure everyone gets paid accurately and on time can be a challenge. If payroll is part of your responsibilities, then you know what we’re talking about. Chained to your desk for hours, struggling to keep up with compliance rules, stressing to reach your payroll deadline and then – YIKES – you’re right out of cheques! Does this sound familiar? It might, if you’re using desktop payroll software. If you’re stuck in this vicious cycle, then cloud-based payroll apps may be the rescue remedy you need!

Set up takes minutes

Once you’ve transitioned to cloud accounting solutions, such as QuickBooks Online, it’s really becomes quite simple. A few minutes of your time setting up a payroll app today can save you BIG TIME down the road. For example, if your payroll is pretty consistent every month – it can basically run itself. Hourly employees, salaried employees, or contractors can all be set up to be paid at the same time.

Why should  you do all the work?

Most payroll apps offer similar features, some even do more than just payroll. The payroll apps outlined below allow employees to set themselves up and be responsible for their personal information. For example, they can review and access their paystubs on-line whenever they want. The apps also automatically perform payroll calculations and update the latest tax tables which takes the pressure off you! Here are some other liberating features:

  • Direct deposit – No more cheques required!
  • Automatic payroll calculations – No more tedious number cruching!
  • Online paystubs – Help save the environment!
  • CRA/WCB Remittances – Ensures you’re compliant!
  • Records of Employment – Off-boarding made easy!
  • Year end T4/T4As – The app prepares these, not you!

So, if you’re interested in breaking free and saying good-bye to the old-school approach to payroll, call us today. We’ll help you get current, get organized, and save you the precious time you need to focus on growing your business.

Goodbye “Old School” Data Entry – Hello Hubdoc!

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Are you up to your eyeballs keeping track of receipts, invoices and bank statements? Business owners know that the CRA requires these supporting documents to be in order in the event of an audit. However, the time it takes to gather and input all this information throughout the year can seem daunting! We feel your pain and want to share a more efficient way to keep track of these necessary documents.

Introducing: Hubdoc! Hubdoc is a cloud-based software that helps you collect, manage and organize receipts, invoices and statements seamlessly. Here’s how it works:

  • Hubdoc automatically fetches the latest monthly bank and credit card statements from all major banks. It can also fetch monthly bills from a growing list of vendors. (Yes, it’s that helpful!)
  • Hubdoc keeps a digital backup of your receipts and invoices in one central location. These can be easily submitted to Hubdoc through automatic fetch, email forwarding, scanning or just taking a picture through their mobile app. (Yes, it’s that easy!)
  • Using machine learning technology, Hubdoc extracts key information such as vendor name, dates and dollar amounts from your uploaded documents. (Yes, it’s that smart!)
  • Hubdoc integrates with QuickBooks Online which can help you automate your bookkeeping. With a click of a button, you can export the extracted data from Hubdoc and automatically create a transaction in QuickBooks Online. (Yes, it’s that automated!)

Using Hubdoc to automate your data entry and bookkeeping chores will leave you valuable time to focus on expanding your business. To refresh your memory about Cloud Accounting, please refer to our June 2019 blog. To find out if Hubdoc is right for you, contact us anytime. Say goodbye to old school headaches and say hello to Hubdoc!

What is Cloud Accounting

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Cloud accounting software is similar to desktop-based solutions, only they are hosted on the “cloud”. This means users will have access to their data from anywhere that has an Internet connection, and from any device – including laptops, smartphones, and tablets. 

Why should you adopt it?

One great reason is that cloud software applications are automatically kept current, so users no longer spend their time dealing with version updates. Cloud accounting also provides business owners the ability to get their information updates in real-time, anytime. Additionally, new features are being added regularly to increase productivity, which frees up precious time to focus on your business.

Similar to Netflix, most cloud accounting solutions carry a monthly subscription. No long-term commitments mean you won’t feel locked in with a specific vendor or cloud accounting technology. A monthly subscription allows you to manage your accounting records (including importing bank and credit card feeds), email invoices, and add useful third-party productivity improvement applications (applications are an additional cost).

What are the benefits?

Here are some other benefits to think about when contemplating cloud accounting solutions:

  • Access to extra software features that are not available on the desktop versions
  • Streamlined data-importing processes and built-in controls ensure superior data accuracy
  • Multi-user access
  • Unauthorized access prevention
  • Safe storage of financial data
  • Sync data automatically
  • Most accounting software companies are improving the features and functionality of their cloud-based software, NOT their desktop software

Still unsure if cloud-based accounting solutions are for you?

Here’s where we can help. We’ll provide a thorough analysis of your situation to ensure you are moving to the right software environment. Once you’re ready to move forward, we can help transition from the desktop applications you may presently be using into the appropriate cloud-based solution. Call us today and follow the “cloud”!

Should You Steer Clear of Company Owned Vehicles?

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It depends on how much business driving you do. In cases where business use is minimal, a company owned vehicle is simply a tax nightmare.

The Bumpy Ride from Phantom Income

On company owned vehicles, CRA imputes phantom income to the employee as follows:

  • Standby Charges – Calculated with reference to the purchase price of the vehicle (if owned) or the manufacturer’s suggested retail price (MSRP) for a leased vehicle.
  • Operating Cost Benefit – Calculated in relation to the company paid outlays like gas, repairs and insurance, etc.

In either case, you must include this phantom income depending on the extent to which the vehicle is used for business purposes.  If you don’t drive more than 1,000 KM per month on business AND have more than 50% personal use, the standby charge is a big number – the more expensive the car, the bigger the number gets.  The kicker is, as your car depreciates each year, the standby charge income stays high based on the original price you paid (or MSRP, if leased).

A Typical Road Travelled

Consider a typical scenario. A vehicle costing the company $40,000 is used 365 days a year by an employee (maybe the owner) who drives it to and from work (which is NOT business use) for a total of 30,000 personal KM a year.  The automobile benefit for this employee is $18,000 each year.  This amount is taxed at the same rate as salary and must be included on the employee’s T4.  If the automobile is used for five years, the benefit will remain at $18,000 even though the vehicle is depreciating over time. Over five years there would be $90,000 reported on this employee’s T4, even though the original cost of the vehicle was only $40,000!

Driving the Point Home

If you want to reduce the standby charges and operating cost benefit because you believe you are using your vehicle a lot for business purposes, buckle up for a tough drive! CRA requires you to maintain an accurate mileage log as proof of the percentage you use your vehicle for business. Also, if your phantom income is not reported properly, a CRA audit is sure to ensue, along with penalties and interest – we see this all the time!

The bottom line to our opening scenario, is that it makes better sense for the employee to buy the vehicle and ask for a tax-free mileage reimbursement for business KM’s driven at CRA’s allowed per KM rate.  No T4 implications, no phantom income, no complex reporting, no hassle. They simply keep track of the few business KM’s to support their expense claim. Done and done!

If you’re contemplating a business vehicle, we suggest giving us a call to discuss the tax implications. In the meantime, use this Automobile Benefits Online Calculator and start steering yourself in the right direction today.  https://apps.cra-arc.gc.ca/ebci/rhac/prot/ntr.action

The Many Hats of Small Business Owners

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If you’re the owner of a small business, to say you multi-task is an understatement! The various “hats” you wear can include accounting, marketing, information technology and human resources – which aren’t exactly small tasks in themselves.

If you’re feeling overwhelmed by the constant juggling act, out-sourcing your accounting functions can take some of the pressure off. That’s where we can help!

Scarrow Yurman & Co. has had the pleasure of supporting small business owners for over 30 years. Our support includes providing taxation and financial reporting services to ensure your accounting needs are organized and compliant. We worry about the tax rules and numbers, so you don’t have to!

Our vast experience with small business has also impelled us to write some monthly blogs. Whether you are one of our clients or not, we want to hear from you. Tell us what financial related topics interest you.  Here are a few from our archives:

A Business Use for GPS Systems

Benefits of Job Costing

Cloud-based Bookkeeping Software – A Word of Caution

Do You Need a Financial Advisor?

Incorporation of The Business; The Advantages

Mandatory Requirements for Efiling Personal & Corporate Tax Returns

Personal and Corporate Tax Instalments

So, if you are feeling overwhelmed as a small business owner, let Scarrow Yurman & Co. take on the “accounting hat”. Give us a call today (905-475-5200) and hats off to hats off!

Tax Season – Four Steps to Help You Get Organized

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It’s hard to believe that we’ve entered another personal tax season. In fact, April 30th is just 42 days away! To make tax season as stress free as possible, here are four steps to help you get organized.

STEP #1 – READ YOUR PERSONAL TAX LETTER

A few weeks ago, we sent an email to our clients with a personalized tax letter attached. That letter outlined items that were applicable for your return last year that may also be pertinent this year. This is a great start to ensure you don’t miss sending us anything important. If you don’t remember receiving this letter, please contact us so we can provide you with a copy.

STEP #2 – ORGANIZE YOUR DOCUMENTS

  • Tax slips – Based on last year’s slips, determine the slips that are applicable this year. For missing slips, contact the issuer or your investment advisor immediately. 
  • Medical expenses and donations – Prepare a summary of all medical expenses and donations and be sure to provide us receipts for backup. If you have medical expenses from pharmacies, the pharmacist can provide you with a summarized print-out. This removes the worry of misplaced prescription receipts.
  • Self-employed or rental income information – When providing current year figures, please highlight them clearly so they stand out. This saves valuable time as we sort through it all.

Once you have all your documents organized, place them in an envelope or folder. Include a note for any slips that are no longer applicable or any new slips for this year. We suggest you create a separate envelope/folder for each family member as this avoids confusion.

STEP #3 – NOTE CHANGES TO PERSONAL INFORMATION

  • If you have a change of address, marital status, employment, or new family members, be sure to include reference to this in your package.
  • We also need to know if you sold your principal residence during the year. This must be reported to the CRA even if the gain on your sale is tax exempt. Failure to report the sale means big problems for you, so keep us posted!
  • Please include information for children now in post-secondary school or who are earning part-time income so we can prepare their tax returns. If they’re paying rent, property taxes or have minimal income, they may be eligible for certain government benefits. That spells cash in your child’s pocket.

STEP #4 – SEND US YOUR DOCUMENTS ASAP

For your convenience, our office hours are extended until April 30, so feel free to drop off your documents in person. You can also courier them to us or send them online through ShareFile. Whatever your preference, it is imperative that we receive your documents as soon as possible. This puts us in the best position to efile your return on time and avoid late filing penalties.

Following these steps will reduces stress, saves us time and you money! If you have any questions as you get organized, our team is just a phone call or email away. Let’s work together to make this the best personal tax season yet!

TFSAs – Do You Have Room?

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In November 2016, we blogged about Tax Free Savings Accounts. Since inception, CRA has been auditing TFSA accounts and this has resulted in penalties to taxpayers who have unknowingly over-contributed. How can you be sure you have room for your TFSA contributions? Here are some tips.

Understand TFSA Withdrawals

Let’s say you’ve withdrawn funds from your TFSA. This has left room to re-contribute later, right? Not necessarily. If you withdraw funds from your TFSA, you must remember that this does not create corresponding contribution room until the next calendar year. If you contribute sooner – you could be penalized.

Ensure TFSA Transfers Are Done Correctly

If you wish to transfer funds from one TFSA to another, the transaction should be processed as a “direct transfer” by your financial institution. Otherwise, it could be viewed as a “funds withdrawn” and “funds contributed” scenario. When the latter happens, contribution room for the withdrawal will not be reinstated until the next calendar year. So, when funds are not transferred correctly, and you contribute too soon – penalties may also apply.

Keep Up-to-date with Changing TFSA Room Limits

You can have more than one TFSA at any given time, but the total amount you contribute to all your TFSAs cannot be more than your available TFSA contribution room for that year or you could get dinged with a penalty. It’s good to check each year to see if the annual limit has changed:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account/contributions.html.

Always Be Aware of Your TFSA Balance

CRA has made it easy to ensure that we don’t over-contribute. Before you contribute, log into CRA’s My Account for Individuals  >  Click RRSP and TFSA tab  >  Contribution Room  >  Next.

This takes you to your TFSA page where you can find out your contribution room as of the current taxation year.

Following these simple tips can help you save money without worrying about unexpected penalties. Happy saving!

 

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