Tax season is upon us. Yes, the dreaded time of year when many small business owners wish they'd put more effort into organizing their books monthly. The shoeboxes stuffed with receipts and a jumbled list of accounts receivables often make their debut around now. Perhaps if we stare at them long enough... POOF... they'll just vanish and return in our mail boxes as nice fat tax refund cheques? Unfortunately, that's the stuff dreams are made of. While general bookkeeping is simple enough, year-end accounting and tax return preparation is a separate beast all together.
This will be my first year to file business taxes as a sole proprietor. I've only just started my communications business but already I've solicited the help of a trusted professional bookkeeper. I recognize that numbers aren't my thing; consequently, I've invested time and money into preparing a solid bookkeeping template and processes to track my limited expenses and income. My Virgo tendencies towards order and detail prevent me from just winging things in life. I'm much more comfortable hiring professionals to teach me what I need to do, particularly when it comes to accounting.
SME (Small and Medium Enterprise) owners wear many hats but 'professional accountant' does not need to be one of them. While some SME owners chose to file their own business taxes, I truly believe that it's best to solicit help from an experienced accountant. I understand the temptation to save a few dollars by doing it yourself but in reality it may cost you more in the end. Unless you're staying abreast of all the updates the CRA (Canadian Revenue Agency) makes to business taxation law, it is possible to miss valuable deductions and tax credits that could benefit your bottom line. Alternately, if you underpay your taxes, financial penalties could surface as a result. Punitive consequences and nasty time-consuming audits can be avoided by following the advice of accountants who know how to avoid the red flags and stay within the legal boundaries set by the CRA.
What's the best way to find a good accountant if you haven't used one before? I always believe that referrals are best. Talk to other businesses and ask who prepares their corporate tax return and whether they're happy with the service and advice they've received. Referallss from your lawyer or banker can also carry some weight. Keep in mind that it is totally acceptable to shop around for the right fit or to change accountants if you are unhappy with their service. A designated CPA (Chartered Professional Accountant) will provide a certain standardized level of knowledge that you can count on. After the designation, quality of service and advice comes from experience and personal fit. Ask lots of questions and look for an accountant that has experience with businesses like yours. Leave the big number crunching to the professionals and focus on what you know best: running your business. Until next week, stay in the black and keep coming back.
