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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 | Filing Deadline For Proprietorships

There are two different business structures that entrepreneurs have the choice to operate when they open their first business says outsourced accounting services. There is the proprietorship, which is an unincorporated business and is tied legally to the business owner and their tax obligations, meaning the tax filing deadline is the same as the entrepreneurs personal tax filing date. A corporation is a legal entity separate from the business owner, and exists for tax purposes. There is many pros and cons of operating as a proprietorship or a corporation. However, regardless of which one a business owner chooses, they should be aware of the different tax filing requirements and accounting needs so that they can ensure that they are keeping track of their business finances appropriately, and filing their taxes on time.

With a corporation, entrepreneurs can choose when they want their year end to be, and outsourced accounting services says that proprietorships have no choice. Business owners must file their personal tax return along with their proprietorship taxes. Canadians have April 30 as their personal tax deadline, however entrepreneurs of proprietorships can file their proprietorship and personal tax returns a bit later, due to the additional time required to prepare the filings. Proprietorships can have up until June 15 to file their business and personal tax returns. That is an additional forty-five days, in order to help entrepreneurs follow taxes. Business owners should be aware however that if they owe any taxes to the government, CRA will start charging interest from April 30, even if they have a June 15 deadline. That is a very small amount, 1% per month on the entire total. However, entrepreneurs do need to realize that if they miss the June 15 filing date, they will be paying high penalties.

In order to help an entrepreneur ensure that there filing their taxes properly, outsourced accounting services recommends that they see an accountant as early in their business ownership is possible to find out what categories they need to be tracking for their expenses in their business. Since proprietorships do not need to use accounting software, which often prompts them on what categories they have to choose from, makes it very important for an entrepreneur to see an accountant first, to find out what they need to track. It also can help them get some advice, best practices and some high-level projections on their business so that they can be set up as much as they can for success.

By understanding the different accounting and tax requirements that proprietorships face in business, entrepreneurs can get all of the facts, and keep track in their business so that they can ensure that their tax filings are as accurate as possible in their business. By doing this, they can ensure that regardless of what structure they are operating under, their business will be as successful as possible. This can help an entrepreneur grow their business, and whenever it makes sense for them to incorporate, they will have their accounting is set up and as accurate as possible for that to happen.

Outsourced Accounting Services | Filing Deadline For Proprietorships

There is many differences between proprietorships and corporations when it comes to differences in accounting says outsourced accounting services. Business owners should be aware of these differences, so that they can set their proprietorship up properly, and be prepared to file their year ends as accurately as possible. Not only should entrepreneurs be aware of these differences, but know what they have to do ahead of time so that they can set their business up for accurate accounting.

The biggest differences that entrepreneurs will face when doing the accounting of a proprietorship, is they do not need accounting software like QuickBooks in order to do the accounting for their proprietorship. Software like QuickBooks, Sage and zero use what is called a double entry accounting method to keep track of the business finances, and is a requirements of corporations. However, proprietorships need to to do is called single entry accounting, therefore they do not need to utilize software like QuickBooks for that. This can help an entrepreneur save money and time, because they will not have to purchase special software, or take the time to learn how to use it.

One thing that entrepreneurs should keep in mind when doing single entry accounting, is because it is a lot easier to make mistakes, business owners should be using a separate bank account and credit card to keep track of all of their expenses. It is even more important for entrepreneurs to not to mix their personal and their business spending, because it can be harder to catch mistakes in single entry accounting. This separate bank account can ensure that business owners can easily look at the bank statements to see all of the credits and debits to their business, and make keeping track of it much easier. This also adds an additional layer of audit protection if CRA requires, because it will be much easier to show Canada revenue agency all of the transactions.

When doing their accounting, business owners are proprietorships should also see accountant early on their business ownership for advice says outsourced accounting services. Since they will not have accounting software like QuickBooks to help identify what the most important categories are for business owners track, though be able to find out what they should be keeping track of what the most needed totals are. In addition to that, business owners can speak to their accountant to get some high-level projections that can help them grow their business.

When business owners have decided to operate a proprietorship, they should be aware of the accounting differences, so that they can keep meticulous track of all of their business expenses and profit as early as possible in their business. This can help them ensure that their accounting is accurate, that their year end is filed as smoothly as possible. Outsourced accounting services says that single entry accounting can be easier to do, it is also easier to make mistakes, so the more an entrepreneur can do to ensure accuracy, the better.