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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 | How Tax Filings For Proprietorships Work

If a business owner has decided not to incorporate their business yet says outsourced accounting services, they should be very clear on how to file the taxes in their business properly, to avoid getting hit with late filing penalties and interest charges. There are several things that entrepreneurs need to remember when filing taxes in their business that is a proprietor ship, and one of the most important things to remember is that an unincorporated business is a business that remains tied legally, to the business owner and their tax obligations.

Because a proprietorship remains tied to the business owner, that means that the year-end tax filing for the business is the same as the personal tax return. Business owners should ensure they know that they need to be preparing not only their personal taxes but their business taxes. The different form for their business as their personal tax return, but they are going to need to file those returns on the same day. Although the tax deadline for Canadians is April 30, Canada revenue agency allows these entrepreneurs some additional time to prepare their tax return, because they know the added level of difficulty that preparing a business tax return is. Because of that, they have until June 15 to file their personal and business tax return.

When entrepreneurs are preparing their business tax return, they should feel free to approach outsourced accounting services in order to get opinions on how they are year-end tax return looks. Even visiting their accountant prior to doing their year end can help them figure out what the most important categories to track for their specific business, identify their revenue streams, and ask any of the questions that they may have that could help them track their revenue better. Accountant should also be able to give them high-level projections in order to find out what they should be doing to help them grow their business. An accountant will be able to review the year-end and help an entrepreneur understand if the expenses that they have claimed are reasonable, they are properly classified, and there is no expenses that are missing. The also be able to find out from accountant if the tax return fits CRAís parameters. It is important that a business owner uses all the tools at their disposal to minimize the risk and ensure that their tax return is as accurate as possible when they sent it off to Canada revenue agency.

By understanding what the differences between the filing date for proprietorship and a corporation can help entrepreneurs ensure that they are thing towards a June 15 deadline, and their getting the professional help they need to ensure the accuracy of their financial information that they send to CRA. By doing this, entrepreneurs are giving their business the best chance at success as possible, that can not only help them avoid going out of business, but help them significantly grow their business as well.

Outsourced Accounting Services | How Tax Filings For Proprietorships Work

Many entrepreneurs start running their business as a part-time endeavour, and do not think to incorporate their business until it becomes more of a full-time business says outsourced accounting services. However, if an entrepreneur is not going to incorporate their business, they should find out what the difference is for accounting requirements between incorporated businesses and proprietorships. The requirements are different, and knowing how to do both are extremely important.

One of the first things an entrepreneur needs to understand when it comes to the accounting requirements for a proprietorship, is that they only need to worry about single entry accounting. Corporations require double entry accounting, which means they need to use a typical accounting software such as QuickBooks. However, proprietorships do not need to have that level of accounting, and therefore do not even need to use accounting software QuickBooks. They can simply track all of their revenue, expenses and costs through any spreadsheet program, or even with a pen and a paper. All an entrepreneur needs to do says outsourced accounting services, is understand their various revenue streams, to check where their revenue is coming from, the cost of goods sold as they relate back to those three revenue streams, and finally all of the expenses of the business, and what expense accounts they need to be associated with, travel or advertising or supplies to name a few.

One of the most important things that a business owner needs to remember with single entry accounting, is that even though it is extremely easy to learn how to do, it is also extremely easy to have mistakes. It is difficult for entrepreneurs to fix those mistakes, and there is no signs that it is wrong like there is in double entry accounting. Outsourced accounting services says that double entry accounting means that the books have to balance at the end of the month, and if they do not then that is a sign that there is errors that need to be fixed. Single entry accounting does not have that trigger, so business owners need to ensure that they are being very meticulous when they are keeping track of their expenses and revenue.

One way that entrepreneurs can ensure the accuracy of their information, is by setting up a separate business bank account for their proprietorship. As long as they are never making personal purchases out of that account, it will be very easy to use as a double check system. By comparing their spreadsheet amounts to their bank statement, entrepreneurs can ensure that they have put the right totals in, as long as they are reviewing their spreadsheet and their bank statement on a regular basis.

When business owners are running their proprietorships, understanding their accounting requirements can help them ensure they are keeping track right from the very beginning of their business, so they can end up with the most accurate financial information on their business that can help them grow their proprietorship.