Paying tax is just the best thing, everyone loves it. Ok, so that might be a stretch, but as someone once said, paying tax means that you’re making a profit, so that isn’t a bad thing. However, whether you agree with this or not, not one really wants to be paying more tax than they should be, and no one wants an unexpected tax bill.
We don’t have much of a say as to where our tax dollars get spent but we do have control over who helps us work out how much tax we will be paying. While you may worry that getting someone to do you taxes is just one more expense, particularly if you are just a small business, choosing a great business advisor and accountant can not just help you reduce your tax bill, but can increase your profitability and help you understand your business growth.
It is also good to have a layer separating your business from the tax department, particularly in the inevitable instance of being audited. You also should be looking for someone who understands your local area, particularly if you want them to be knowledgeable about what sort of expenses you might have that wouldn’t be encountered in other parts of the country. For example, in Abbotsford tax services will often need to be able to look at exporting and importing across the Canada-USA boarder.
For most small businesses hiring an external company to manage their tax obligations helps provide an extra level of financial security. While having someone in house who can manage the day to day accounts payable and receivable makes great sense, hiring a company to cover quarterly or end of year reports, set of accounts, and finalize tax obligations reduces the risk of human error causing accounting problems for you down the track.
Do You Know The Latest Changes?
Unless your primary business is accountant, the chances are high that you really aren’t up to date with the many minor changes to financial legislation that happen every year. Yes, you might be aware of sudden increase in GST or when a government starts talking about penalty payments on red meat (like this) or sugary drinks, but do you know how speculation and vacancy tax (SVT) changes might effect you or your business?
Each month there are minor tweaks and changes in BC financial law that are designed to make things run a little smoother, but if you aren’t up to date with these changes you are very likely either missing out on a deduction because you weren’t aware that you could now claim for an expense, or worse, claiming for something that you are no longer entitled to. An example is the minor change to the Promotional Materials and Special Offers that was updated to be clearer in July 2019. These are things that you may be effective by, but completely unaware of.
Even if you subscribe to get the updates emailed, and you somehow find the time to actually read the email, or at least skim read, as it comes in, are you 100% certain you’d know when it applies to you? https://www2.gov.bc.ca/gov/content/taxes/tax-changes/whats-new Only 62% of Abbotsford residents actually work in Abbotsford itself, with many residents travelling to work in Mission, Chilliwack or even Vancouver – but do you know if you get any form of allowance for hiring local staff? What about if you set up business in a particular area the minimizes the need to commute?
Understand Your Business Better
You may have built your business from the ground up, managing every aspect yourself until you slowly grew to be where you are today. Or you may be just starting out and need to know how best to invest the limited funds you have. Or you may have walked into someone else business and are now trying to make it even more successful.
No matter where you are, numbers matter. Being able to look at not only what your profit is, but to be able to analysis where you are getting good returns and bad returns makes a huge difference.
One mistake people sometimes make when they print out the accounting data themselves is to look at share profit and loss, but talking to a good business advisor can help you see that even areas that don’t look like they are creating direct income are helping to solidify your brand as a leader in your market.