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While corporations are separate legal entities, that have their own tax purposes and tax requirements, a proprietorship is an unincorporated business that is actually linked to the business owner in the business owners tax requirements. It is the reason why entrepreneurs need to file their business taxes along with their personal tax return if they are a proprietor of a business. While corporations can choose when to make their corporate year ends, proprietors have to adhere to the dates that is sets by Canada revenue agency. While most Canadians have an April 30 filing deadline for their personal taxes, they allow an additional forty-five days for proprietors. This is to allow them additional time to prepare two tax filings. Entrepreneurs need to keep this in mind when they own a proprietorship.
In order to ensure their doing their taxes properly, businesses should set up a meeting with outsourced accounting services in order to find out early on as possible what categories they need to track for expenses, and what revenue streams they should be putting their revenue towards. I meeting with an accountant first, business owners can be sure that there checking their revenue and their expenses properly, so that when it comes to their year end, they have most accurate information to do that the year-end.
They can also utilize outsourced accounting services in order to review their year end before they file it as well. This can help an entrepreneur have peace of mind that they have done their year end as accurately as possible. Accountant should be able to help an entrepreneur see if they have missed claiming anything, or if they have claimed things that should not be. They can also ensure that their expenses are classified properly to avoid mistakes. I getting a second opinion on their year-end tax filing, entrepreneurs can get themselves that peace of mind that there filing is as accurate as possible.
Whether or not it is a business owner has reached the point of my to incorporate their business, if they operate a proprietorship, they can be prepared for doing their year-end taxes in such a way that minimizes stakes, and ensures accuracy. By utilizing help where they can, business owners can ensure that they have the best year-end finance as possible, that can help them have the most accurate numbers to send off to Canada revenue agency.
When making the decision of what type of business structure they should have, entrepreneurs should understand the differences between proprietorships and corporations says outsourced accounting services. While there may be a lot of great benefits that incorporating can offer a business, if they are not ready to take that step, there are lots of things that they should keep in mind as they operate their business to ensure they are taking care of their accounting properly. When they have their accounting in order, they will be able to use those numbers in their business not only to help avoid making poor financial decisions, but to use that information to help them grow their business as well.
One of the biggest differences between proprietorships and corporations when it comes to accounting requirements, is a proprietorship needs a much lower level of accounting than a corporation. Corporations require something called double entry accounting, and necessitates them to use accounting software such as QuickBooks in their business. Outsourced accounting services says that what this does, is it helps entrepreneurs track their revenue through their business, ensuring that for every debit in their business there is a credit, and that the end of the month, the businesses book balance.
Single entry accounting on the other hand is possible for entrepreneurs to do simply from keeping track on their spreadsheet. All they need to do is ensure that they are keeping track of their revenue through their three different revenue stream categories, the cost of goods sold as it relates back to those revenue streams, and the expenses of their business, and what expense categories they need to put those expenses towards. No special accounting software is required, which can offer a significant savings to an entrepreneur not just in money, but also in time. That time entrepreneurs can use to grow their business, and if they incorporate in the future, that they can get the accounting software.
Something that entrepreneurs need to keep in mind when doing single entry accounting, is that since they do not balance anything at the end of the month, it is easy to have mistakes, because there is nothing triggering an entrepreneur saying that there has been a mistake. Outsourced accounting services says that because of that, entrepreneurs need to be very aware of how they enter information to ensure accuracy.
Business owners should get a separate bank account as well, because that can help entrepreneurs have a double check system for their accounting. By ensuring that all business transactions flow through one account, they can check their accounting spreadsheet against all of their transactions in their month to verify is much as possible that they have entered information correctly.
It is extremely important that entrepreneurs are being as meticulous as possible when doing their single entry accounting. While it is easier, it is also easier to make mistakes, and they should ensure their doing their best to minimize those errors. Outsourced accounting services says that when they do that, they can ensure the accuracy of their numbers not only for their year-end, but for using those numbers to help grow their business.
