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What does bookkeeping mean?

My clients often ask me ‘what does bookkeeping mean?

They wonder if bookkeeping is something that they could perform while running their business.

If you are amid the start up phase of your business, you might wonder if bookkeeping is something that you could perform yourself while running your business.  Whether or not you choose to employ a bookkeeper or are comfortable to bookkeep yourself, keeping your books in order is crucial to running any business. In fact, good bookkeeping practices will give you an excellent measure of how well your business is doing.

In the following article, I will explain what bookkeeping means, what are the different ways to bookkeep, as well as why it’s important to bookkeep.

What does bookkeeping mean?

Bookkeeping is a recording of financial transactions, which include purchases, sales, receipts, and payments by an individual or cooperation. Bookkeepers are responsible for accurately recording all the financial transactions of the business, whether it is a cash transaction or credit transaction. You would need certain skills and talents to perform a bookkeepers crucial job.

Bookkeepers must be detail oriented, be meticulous about accurately recording numbers in the books and it is to their advantage if they enjoy working with numbers. Bookkeepers must vigilantly maintain a paper or electronic trail, as well as filling and storing all essential backup data about the financial transactions recorded in the books.

What are the different ways to bookkeep?

A useful bookkeeping system is one that is easy to understand, simple to use, reliable, accurate, consistent and can provide you with the information you need in a timely manner.

The two different bookkeeping styles are: single entry and double entry bookkeeping
Single entry bookkeeping means that every dollar transaction is recorded only once, either as income or expense, an asset or a liability. All entries are recorded on a one page synoptic journal, also called a revenue and expense journal.

On the other hand, double entry bookkeeping means that each transaction is recorded twice, one account is credited with the given dollar amount and a second account is debited by an equal dollar amount.

You may use a one-write system or a computerized system to record your bookkeeping.
One-Write Systems are copyrighted systems are set up using carbon-backed cheques. As you write the information on a cheque, it also transfers the data to a record system.

Computerized Systems are programs that are advantageous because they usually have the ability to produce daily updated financial statements quickly and in versatile ways. Many of these systems are scalable, so you can add on as your business expands.

Why is it important to bookkeep?

It might seem tedious to record every financial transaction in your books, yet financial records can save you a great deal of effort and time in long run.

Good records will keep you up to date with your business’ past and present standing. They will assist you in making good business decisions. Good records will also help you meet different government agency requirements, which include: Canada Revenue  Agency, Canada Pension Plan, Employment Insurance, Department of Finance, Goods and Services Tax and Workers’ Compensation. Additionally, good records will help you make accurate and timely remittances. Finally, good records will increase the probability that your business will survive, stay in business and earn profit.

If you require additional consultation or a tax planning strategy, please do not hesitate to contact us. We serve clients in Toronto, North York, Vaughan, Thornhill, Richmond Hill, and all other GTA cities.

Polina Presman, CPA, CA

T- 416-371- 6017
F- 416-667-0404

Shani Marzin, CPA, CA

T- 416-731-9031
F- 416-667-0404

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Accounting is not boring!

There is a common misconception that accountants are a bunch of math geeks who count beans, focus on crunching numbers and have zero communication skills. After years of working as an accountant, I’ve come to the realization that I rarely, if ever get bored with the profession.  And I am not the only one that feels this way. In a survey of more than 2,600 accounting professionals, nearly 7 out of 10 accountants said that they would stick with accounting if they could go back in time and choose a different career.

So what is so exciting about working in accounting?

Accountants are exposed to wide variety of career paths and solve complex problems. I will further delve into each of these points and and explore them separately.

Accountants are exposed to a wide variety of career paths

Accountants could make the profession their own.  Whether they choose to work for a government agency, school, charity, or professional agency to name a few, accountants could carve themselves a niche in the accounting industry. Michael Tumminia is one example of an accountant who did just that. Mr. Tumminia is an accountant who works  with top fashion models. He helps fashion models manage their financial lives and is the voice of reason and limits for the models. Mr. Tumminia says, “our job is to set up their life [models] in a way that is efficient, effective and allows them to focus on their careers.” Working with models such as Ashley Graham, Marquita Pring, Karlie Kloss, Toni Garn ”has made his ‘very programmatic, very technical job’ more fun and interesting”

Accountants may work full time for a given firm or they may take on multiple clients while being self-employed or as part of an accounting firm. Some accountants move vertically up the rungs of the accounting firm and some choose to move horizontally and may teach the profession.  There are some accountants that become high level managers, and others that start their own business using what they’ve learned during their time as accountants. For instance, “Mick Jagger may be known for his musical achievements and stage acrobatics, but did you know he could also rock a spreadsheet?”  “While studying accounting and finance at the London School of Economics on scholarship, Mick Jagger reunited with a childhood friend guitarist, Keith Richards” and pursued his interest in music.

Before they launched their music careers, Kenny G and Robert Plant of Led Zeppelin worked in accounting. Also, the person who invented the bubble gun was also an accountant.  Walter Diemer “was a fledgling accountant for the Fleer Chewing Gum Company in Philadelphia when he began testing recipes for a gum base – the part that makes gum chewy – in his spare time in 1928.  “He unwittingly created the first batch of bubble gum, making it pink because that was the only shade of food coloring on hand.” Now that’s something to chew on!

As you see there are a wide variety of career paths and many opportunities to explore different avenues and make accounting your own.

Accountants solve complex problems

Accounting is an intellectually challenging and even philosophical endeavor. Accountants employ a set of rules and concepts to prepare relatively simple financial statements that help capture and represent the financial truth of a company. Blogger Matthew Shaffer nicely articulates this: “The fundamental truth about a firm is actually fairly chaotic – a million different things of varying importance are going on at once -and we need to figure out rules for distilling some simple but accurate summary from this chaos.”

Another important point that blogger, Mr. Shaffer makes is that accounting is a ‘philosophical enterprise.’ “The world itself does not label things as ‘assets’ or ‘expenses’; rather, we humans decide which labels we apply to which things; and we set rules for doing so based off of imperfect intuitions and ideas that involve human social ideas like justice (i.e., we want accounting standards that will promote fair and beneficial outcomes for society as a whole via efficiency and transparency) and conservatism” (i.e., we want standards that will prevent managers of firms from being too optimistic when reporting the data).

Accounting helps companies distill useful trends and bring financial order to businesses. Joseph Rascoff, is one example of an accountant who is truly “intrigued by the challenge of bringing financial order to the [music] business”. Mr. Rascoff, was an accountant who displayed little passion for rock n’roll music. Yet, ended up becoming the powerful business manager and tour producer for music powerhouses such as the Rolling Stones, U2, and Paul Simon. “Although Mr. Rascoff preferred classical music, he immersed himself in the rock n’roll business and later in 2013 in electronic music because he was fascinated by the complexities of managing the business affairs of music artists.

Many accountants will agree that they rarely get bored with accounting. Perhaps this is because they have an opportunity to explore a variety of different career avenues and like detectives, they have an opportunity to piece complex things together in order to understand and decipher the bigger picture.

If you require consultation or have any questions related to accounting, please do not hesitate to contact us.

Polina Presman, CPA, CA

T- 416-371- 6017
F- 416-667-0404

Shani Marzin, CPA, CA

T- 416-731-9031
F- 416-667-0404

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Practical Information from North York Accountants

Useful information from North York Accountants

If you are living in North York, here is a list of CRA contact information (addresses, phone numbers) that will help you navigate your taxes more effectively.

Mailing your T1 form

If you are an Ontario resident living in either North York, Toronto Centre, Toronto East, Toronto North, Toronto West, Barrie, Sudbury and these other cities, mail your paper T1 to the following address:

Canada Revenue Agency

Tax Centre

1050 Notre Dame Avenue

Sudbury ON  P3A 5C2

Non-residents should mail their T1 return to the following address:

International and Ottawa Tax Services Office

Post Office Box 9769, Station T

Ottawa ON  K1G 3Y4

Canada

Where is the CRA drop box located in North York?

If you would like to drop off payments or correspondences, please visit the Toronto North -Barrie Tax Services Office:

Office/mailing address:

5001 Yonge Street

Toronto ON  M2N 6R9

Fax: 416-512-2558

If you have any tax inquires, you may call CRA. You may also call S &P Accounting Services. We are professional accountants with a firm in North York and will happily respond to any questions and/or requests that you have within 24 hours.

Please note that The Toronto North-Barrie Tax Services Office has a drop box only. Effective October 1, 2013, payment and inquiry services are no longer available at the Toronto-North Barrie Tax Services Office. An external drop box is available for correspondence and payments.

Drop boxes and late payment penalties

Here is an important note about the drop boxes which could help you file your return on time and avoid late payment penalties.

Drop boxes are typically emptied of their contents twice daily (more frequently during the personal tax filing season). The contents are stamped by the CRA mail operations the same day they are received. For the first clearance each morning, items are date stamped with the previous business day’s date.

So an important tax tip is even though you cannot pay your full balance owing on or before the due date (eg.,  April 30, 2017), you can avoid the late filing penalty by filing your return on time.  For instance, if you owed tax for 2016 and did not file your return for 2016 on time, CRA charged you a late-filing penalty. The penalty was 5% of your 2016 balance owing, plus 1% of your balance owing for each full month your return was late, to a maximum of 12 months.

If CRA charged a late-filing penalty on your return for 2013, 2014, or 2015 your late-filing penalty for 2016 may be 10% of your 2016 balance owing, plus 2% of your 2016 balance owing for each full month your return is late, to a maximum of 20 months.

Ensure your taxes are always filed on time

Forget about filing deadlines because from now on we will make sure that your taxes are always on time.

As professional Chartered Accountants, we are committed to excellent service so you could rest assured that we will file your taxes on time.
Our accounting firm is located in North York and we happily serve clients in North York, Toronto, Thornhill, Vaughan, Richmond Hill, Mississauga and other cities in the GTA.

Learn more about our accounting and bookkeeping services here.

Disclaimer:
We strive to ensure all information on our site is accurate and up to date. However, the contents of the site are naturally subject to change from time to time. That means, we can’t always guarantee the accuracy of all information on the site. YOU ARE RESPONSIBLE FOR CHECKING THE ACCURACY OF RELEVANT FACTS AND OPINIONS GIVEN ON THE SITE BEFORE ENTERING INTO ANY COMMITMENT BASED UPON THEM.

Trudeau’s government impact on our taxes & how to maximize your bottom line…

During the recent elections Trudeau ran with a campaign focused on the promise to reduce the tax burden on the middle class, while increasing the taxes for the upper class. As of now, there is minimal information on how he plans to achieve it and we will discuss the information that is available in these points below.

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