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

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Outsourced Accounting Services | Excited To Win With Incorporating?

Outsourced accounting services | when should a small business incorporate

Intuit, the makers of QuickBooks say that only 11% of business owners seek professional help when they need it says outsourced accounting services. Because such a small percentage of business owners actually seek professional help, there are a lot of misconceptions about business being perpetuated by business owners. The misconceptions that business owners have about incorporating is that they think itíll be too much work, but itís too expensive, as well as that it is going to create more complicated bookkeeping. Therefore they continue to operate as an unincorporated business or sole proprietorship and then miss out on all of the great benefits of incorporation.

So what are the great benefits of incorporation asks outsourced accounting services. One of the biggest reasons to incorporate is the tax savings that businesses can see. To understand how much of the tax savings they can see, entrepreneurs need to know what the top personal tax rate is in Alberta. Currently, the top personal tax rate is 48%. That means almost half of all money earned goes directly to the government. A lot of the reason why entrepreneurs go into business for themselves was to drastically improve their financial situation. The small business tax rate in Alberta is 11%. That is the potential of a 37% tax savings. That should be reason enough for any small business to incorporate their business. But in addition to the tax savings there are even more reasons why business owner should incorporate.

The tax savings that a business will see through incorporation means that a business owner will be able to accumulate wealth faster than if they didnít incorporate their business says outsourced accounting services. The reason for that is if a business owner has $1000 to invest, 450 of that money goes towards taxes if they are not incorporated. However, if a business owner incorporates that $1000 goes farther, by only $110 going towards taxes meaning that the business owner can then save $890. Thatís almost double the amount of money that the business owner from the unincorporated business can save. Itís easy to see how much easier it is for business owners who incorporate will be more easily save money.

In addition to helping them save money for accumulating wealth, the tax savings that a business who is incorporated sees it can also help them increase the assets of their business. By using the same money savings, Inc. businesses can accumulate money quicker and more easily in order to buy assets for their business. Any business owner who ever needs to purchase hard assets in their business whether itís vehicles, buildings, or even equipment within their business, should incorporate as early on in their business as possible in order to maximize the amount of money they can save towards building assets.

The tax savings alone make incorporation attractive to all businesses says outsourced accounting services. There is no reason why business owners would not want to incorporate their business. Since there is no limit on how much money a business has to make, or how many employees they have to have in order to incorporate, businesses should incorporate as soon as possible.

Outsourced accounting services | when should small business incorporate?

Business owners mistakenly believe that incorporating their business will be too much work, make their bookkeeping far more complicated, make their year end hard to do, business owners often think that incorporating is expensive and time consuming says outsourced accounting services. When in fact none of these things are to. Incorporating a business is fast, easy, and doesnít require the business to take on any different bookkeeping or accounting practices then they were already doing.

Businesses can make an appointment to see their accountant, and go in to the appointment with just their tradename. Thatís all thatís required for a business to incorporate says outsourced accounting services. Businesses can complete the incorporation usually within the same business day. Some professionals such as doctors may take a little bit longer, because he accountant needs to get a stamp of approval from that governing body, this could take a couple days or couple weeks, but for the average contractor small business it is a much quicker and simpler process. This should not be a barrier for businesses to become incorporated.

Entrepreneurs often think that they need to purchase accounting software unlearn a whole bunch of different accounting and bookkeeping techniques just because they have incorporated. When in fact says outsourced accounting services this is not true. An entrepreneur does not need to change their bookkeeping practices at all if they incorporate. Incorporating actually does not change the business settle whatever they were doing before incorporation should be fine to continue doing in the future.

Another reason that businesses believe it is hard to incorporate, is the fact that they believed year and filings are more complicated. Outsourced accounting services says flailing year ends for a corporation is as easy as handing in 12 bank statements. If the business owner can give those 12 bank statements to their accountant who will then prepare the ground for them, thatís all thatís needed for their year end. It is not a complicated year and, and the accountant can often help out quickly and easily.

Entrepreneurs are also under the misconception that taxes become far more complicated. The reason they think this is because Solo per is go from one personal tax account to four or five. The have a federal tax account, a provincial tax account, a GST account, just to name a few. Even though there are several more accounts to keep track of, outsourced accounting services businesses accountants can schedule all of those payments into all the different accounts through postdated checks once a year. By allowing the accountant to set this up ahead of time, business owners can continue operating their business, knowing that their taxes are already taken care of. In fact it can even make business taxes even easier.