This post lists the top most common bookkeeping mistakes made by small businesses which many will encounter at some stage of their business growth.
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A high percentage of small to medium-sized businesses will look to grow sometime during their life cycle. In this post you will find some important information relevant to tax requirements for a growing business.
Tax Requirements Change as Your Business Changes
As you build and grow your business, any number of events and activities can trigger new tax requirements. Here we show you what you need to consider as you grow your business.
Moving From a Sole Proprietorship or Partnership to a Corporation
It might be advantageous to incorporate your business. Refer to Canada Revenue Agency’s (CRA) webpage Changing your business status for information regarding changes to your tax registration.
It’s recommended that you consult with both an accountant and a lawyer when transitioning to an incorporated company. Corporations have more comprehensive recordkeeping requirements than proprietorships.
Hiring Employees for the First Time
Your business is growing and you need to hire staff for the first time. The provincial government has several tax initiatives to assist small- and medium-sized businesses in hiring and retaining employees, such as the Training Tax Credits for Employers.
Refer to CRA’s webpage How payroll works for comprehensive information on payroll and tax issues for hiring employees. The Life events for employees page might be of particular interest to you if this is your first time hiring employees. You can also refer to our Human Resources page for more information.
Adding New Locations or Divisions
If you’re expanding to new locations, you can keep track of your GST/HST, payroll, and import/export accounts separately (note it’s not necessary to get a new business number for each location). For details on registering new accounts for your business number refer to the CRA’s How it works page.
If you’re adding new divisions or branches, however, special filing rules apply. Refer to the Employers’ Guide – Filing the T4 Slip and Summary and the General Information for GST/HST Registrants guide.
Investing in Research and Development
If you’re going to conduct experimental research and development for your product, you might qualify for the federal government and/or the British Columbia government’s Scientific Research and Experimental Development (SR&ED) tax credits. Refer to the CRA website for information on the Federal SR&ED Tax Incentive Program. Refer to the provincial government website for information on B.C.’s SR&ED Tax Credit.
Importing and Exporting
If you start importing and/or exporting goods and services, you’ll need to register for an account that will be appended to your current business number. If you don’t have a business number, you’ll need to apply for one to obtain an import/export account.
Source: Small Business BC
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Cloud accounting has officially landed on the scene and is here to stay. It allows organisations to access their financials online, instead of IT managing their own on-premise software and now burdens like maintenance, updates and more belong to a third party. This technology revolutionises operations, streamlines accounting and saves valuable time and money. However, it presents certain challenges as well.