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E-Myth – “Why most small businesses don’t work & what to do about it”

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Edmonton Accountant | The Cost Of Accounting For Small Business

Something that is extremely important to all businesses, is coming up with a strategy on how they can minimize paying taxes in their business says Edmonton accountant. Since effective tax planning can mean the difference between paying 48% taxes versus 11% in taxes, this can make a huge and lasting impact on the business immediately, and years to come. However, business owners who need to hire a chartered professional accountant in their business, have no idea what is a fair price that they should be paying per year, or what services are included in that. But more importantly, business owners don’t have any idea how much low-quality services will cost their business in the long run.

By understanding the normal ways that accountants charge for their services, business owners can choose accountant that matches with their business, and how they need to operate. There are three different ways that CPAs build for their services. The most uncommon way is a flat fee every month. Edmonton accountant says this is when an accountant gives a price for all of the services that the business owner is going to require every month, and charges them one monthly price that stays the same every month. This is very effective for business owners, because not only do they know every service that they need is going to be covered, they will also know exactly how much they need to budget every month which can help them smooth out the cash flow in their business. This also is great for the accountant, because it ensures that they are competent in their pricing and their service, they can help create a collaborative relationship between accountant and entrepreneur.

The second way that accountants are known to charge for their services, is a flat fee, but per service says Edmonton accountant. This can look attractive to business owners, because they will be able to get a price up front, and no service they are paying for. This can allow them to pick and choose what service they need, while giving them an expectation of what they will pay. However, business owners should be aware, that the services that are included in those flat fees, are extremely basic, and if any additional work is needed, the accountant can end up charging an additional rate that can add up very quickly. Examples of services that may be excluded from those flat fee prices, are sending emails, making phone calls, answering questions the CRA on behalf of the client.

The most common way that business owners get charged for accounting services, is a by the hour rate. Every hour that the accountant works on the business owners file, they get charged an hourly fee. Unfortunately this puts the accountant in the situation of being able to build more the longer they take, which can create friction in a strained relationship between the business owner and the accountant, that can erode some of the trust, and have the business owner questioning the accountants motives.

Minimizing taxes can be one of the most significant activities that a business owner can do to affect their business positively says Edmonton accountant. Since taxes is one of the most significant expenses that a business owner will pay, a business plan that can help them minimize those taxes as much as possible, is extremely important. Since 29% of all business owners that go out of business say that running out of money was the reason their business failed, saving money in tax bills, can help them increase the cash flow in their business, and succeed where they may not have.

Since planning is such a vital service for business owners to ensure that they have, entrepreneurs need to ensure that when they hire their accountant, not only do they do business planning, but they do lots of business plans. Not all accountants even do business plans, and many say they do business plans, but they don’t do a lot of them each year, which means they may not be as effective at them as accountants that do them quite often. That’s one of the first questions that entrepreneurs should ask accountants that they are potentially hiring. Depending on the size of the accounting firm, entrepreneurs should see that the accountants do about 100 or more business plans a year, to ensure that they are sufficiently proficient.

Once an entrepreneur is satisfied that they have a number of accountants to consider that are proficient in business plans, the next thing that they should do says Edmonton accountant is set up an appointment to meet with each of them. The reason for this meeting, is in order to look at what a finished business plan would look like. It doesn’t have to be an actual final plan, just what the business plan looks like, and a bit of understanding about the process. The entrepreneurial will need to work very closely with the accountant, and need to be comfortable not only with the finished product, but with their methods says Edmonton accountant.

What entrepreneurs need to be looking for when they are reviewing a business plan, is how many pages it has. Chances are, if a business plan has only three or four pages, it’s not going to be as significant an impact in their business then a plan that has 30 or 40 pages. A great business plan starts at about 30 pages and goes up from there. The business owner should ask the accountant, what recommendations they made to their client as well as the various considerations they made. Great business plan should include marketing initiatives, tax planning, cash flow projections, forecasts and can get very specific into how to grow their business. Importantly, business owners need to ask the accountant what measurable’s are included in the plan to ensure that both the accountant and the business owner clearly understand how to tell if the plan is working. If you’re looking for a great team with a plan then you shoukd give us a call.