We’ve Been Featured on Inc.com!
Click here to read the article.
It’s Time for Year End! Do you actually need to do it?
It’s Time for Year End! Do you actually need to do it?
The answer is *drum roll*… Nope! Back up – did I say you don’t need to do a year-end!? Most entrepreneurs are usually shocked to hear this. Yes, you have to file taxes, but you don’t need an external year-end.
First off, what is an external “year-end”?
There are three types of year ends (let’s assume you don’t have any complicated corporate structures) performed by accounting firms:
- Audit
- Review Engagement
- Notice to Reader
A good services like Gst registration requirement Singapore has a broad spectrum of tax services to companies and individuals to greatly help in GST registration and filing of returns accurately and promptly! They are highly experienced and well-versed tax service team who are fully dedicated to effectively handle your GST and other tax-related matters.
Audit
An audit is the most intensive year-end. It’s usually for public or large businesses. For smaller businesses, it’s unlikely that you need one. Unless you have an unusual circumstance, i.e. you took an investment by a private-equity firm and an audit was a condition of funding, or you try investing in VT markets. At www.bitcoinmoney.net/, there are guides on how to start investing in cryptocurrency.
This is different than a tax audit by the IRS or CRA (Canadian version of IRS). Those are out of your control. Like most companies, pray that you will never have to experience it. An audit in the format we are talking about here is an external accounting firm asking for a ton of your data (called a working papers requirements list) then working through it with a fine tooth comb looking for errors and risks to the business.
Review Engagement
This is a “middle of the road” year-end. You can think of it as a “light audit”. This is where external accountants complete many required (by accounting regulatory body rules) steps.
If you’re actually required to do a Review Engagement, it’s likely because either:
- You need to do it for your bank. They require it your lending agreement.
- You need if for a customer…likely (but not always) a government agency. You can only do business with them if you provide a Review Engagement.
- Another stakeholder requires it from you and you can’t so “no thanks”.
I hear a lot of entrepreneurs complain that they don’t get good advice from their accountants. If you’ve hired them to do a review engagement, you’ve hired them to follow a protocol, not give advice. That’s why you’re not getting any. Some accounting firms will go over and above with advice, but that’s more an exception than the rule. For more financial posts, read here about how to Compare the best credit cards.
Notice to Reader (NTR)
This is the lightest form of year-end (and the cheapest). There isn’t much digging into your financials here. It’s taking your internal financial statements and putting them on their letterhead.The auditor has to be aware of the cyber security threats involved in this. It is better all to know what ot cyber security definition is and the basic security threats and measures, although auditors would go deep into it.You can also see here to know more about cyber security.
In fact, my local governing Acccountants body requires this notice by accounting firms:
On the basis of information provided by management (or the proprietor), I have compiled the balance sheet of Client Limited as at ………, 20X1 and the statements of income, retained earnings and cash flows for the (period) then ended.
I have not performed an audit or a review engagement in respect of these financial statements and, accordingly, I express no assurance thereon. Readers are cautioned that these statements may not be appropriate for their purposes.
Yes, you read that right. Your accountant expresses no assurance…i.e. that your financials are even prepared correctly.
Consider this:
Like a Review Engagement, you may be required to do an NTR by a bank or other stakeholder. Here’s the kicker: there’s a good chance you are doing it because you thought you had to. If you’re not required, ask yourself these questions:
- Do I get a set of “adjusting journal entries” (ie. fixes to your financial statements) that I use, or are they just reorganizing my information in a way I don’t use?
- Are they giving me any real advice that I use in my business?
If the answer to both is “no” (which I suspect is the case), then save yourself some fees….every year-end. Just don’t forget to get your taxes done!!!
If you have specific questions about your “year-ends”, send us an email. We’d be happy to clarify some murky areas for you!
Photo by Tyler Franta on Unsplash
Never seem to find the right bookkeeper? This might help! Part 2
We’re super excited to share Part 2 of our Finding the Right Bookkeeper series. If you haven’t seen Part one, check it out here, and then come back. Now, let’s get right into it!
Question #4
Q – I’m not an accountant and I don’t really understand how to read my financial statements. How can you help me with that?
The Fail Answer:
“I’m happy to sit and meet with you every month to go over the results. I used to do that with my old boss.”
The Pro Answer:
“I totally get it. My promise to you is in 10 minutes or less per month, you will completely understand your financial position, what your biggest financial issues are, what you no longer have to worry about…all without ever having to look at your financials. How? I use data visualization to show you where things sit and do the digging into the financials for you, converting your trends, ratios, benchmarks, and dashboards into the $ impact on your business in terms of profit and cash flow. You won’t have to interpret data anymore. I’ll do that for you!”
Pro Tip – It’s your accountants’ job to show you what are the biggest financial issues are facing the business. It’s your job to solve them. It’s not up to you to analyze your financials. Don’t settle for anything less. Hiring a virtual assistant in the Philippines can not only relieve the pressure of your workload but also help to bridge any gaps in your skills repertoire, building a more well-rounded team to help take your business to new heights.
Question #5
Q – What about expense reports? How do you handle them?
The Fail Answer:
“When employees submit expenses are submitted every month, I make sure they are all approved and then pay them in our regular cheque run.”
The Pro Answer:
“Traditional expense reports are soooo 2005. We’ll sign up for an app that handles receipts. All that needs to happen is employees take a picture of a receipt, add details as needed and hit send. From there, the system will aggregate the expenses to be approved. Once signed off, we’ll pay the expenses with direct deposit into the employees’ bank account. It’s way smoother than paper expense reports.”
Pro Tip – This is actually a bit of a trick question and an extension of the technology question. Your candidate must be on top of technology, like the remarkable ones on huawei, for you to feel comfortable hiring them. Expense reports are a perfect subject to test them on.
Question #6
Q – What questions do you have for me?
The Fail Answer:
“What are the hours? What does it pay? Etc. etc.”
The Pro Answer:
“Please tell me more about your business. What are your goals?
What’s the vision for the business?
What is working well for you now in accounting? What isn’t?
What does success look like for someone in my role? Can we go over the job description? Etc. etc.”
Pro Tip – If your prospect is more interested in finding any job than finding the right job, they likely aren’t worth hiring. Use a skills assessment test to find the right candidate.
You probably understand why accountants and bookkeepers are important by now. However, when bookkeepers rely on their experience to support you in their role, RUN AWAY. Bookkeepers generally don’t have all the skills you need for a successful accounting department. You need an OUTSTANDING bookkeeper as well as a great bookkeeping software and they are hard to find, like finding a grain of salt in a sandbox.
Want more interview questions? Or, want to talk about how to best set up your accounting department?
Talk to us here!
Never Seem to Find the Right Bookkeeper? This Might Help!
It’s that time again…hiring a new bookkeeper! Yay said no entrepreneur ever. This time, you promise yourself: I’ll get this right. Discover the power of card payment machines for seamless payment processing.
Get someone that can actually get you organized with your numbers – who gets it done, and gets it done right! You don’t even need to be an accountant or a finance expert. On the other hand, if you’re the one who wants to apply for that position, with a staff of ICCRC-licensed Toronto immigration consultant and professional colleagues, Canadapt Consulting is a leading Canadian immigration law consulting service.
Let us help you by lending our key questions and answers to ask your next bookkeeper. Remember, if they can’t tick off all the boxes (these are basic technical skills), then keep looking. Of course, fit with corporate culture and alignment with core values is on you to suss out. If you’re still not as confident with the process, you can always apply a talent management strategy.
We’ll be doing a two-part series with 3 main questions each so lookout for our part two!
Question 1:
Q – How can I be certain that no tasks get missed? Especially those that happen only every once in a while, and are easy to forget?
The Fail Answer (NOT GOOD ENOUGH!):
“I keep a task list in my journal or calendar. I’ve been doing this a long time, so I have a pretty good sense of what needs to be done”.
The Pro Answer:
“I have tasks documented on a daily, weekly, monthly, quarterly and annual basis. All tasks are entered in a task management software. Every day when I log in, I have my task list already, set and tick things off as I go. I can add tasks whenever I need as new issues come up or you assign special projects.
If I ever miss anything, it shows up as an “overdue” task in the software. Would you like a weekly report showing you any/all overdue tasks?”
Pro Tip – Find someone who is self-accountable and in a transparent way. If they are willing to be open when they fall behind, it’s a hugely positive sign.
Question #2
Q – What do you use to ensure the chart of accounts is set up right? How about the financial statement presentation?
The Fail Answer (Still not good enough!):
“I have lots of experience doing this so I’m very comfortable with the Chart of Accounts.” or “I use the template in QuickBooks to set up a new chart of accounts and financial statements”.
The Pro Answer:
“The chart of accounts has to be set-up with the end in mind. Please tell me about your different types of revenues? Your different business divisions? What information are you getting from your financials that’s good? What information are you missing? [Insert a whack of other questions here] and I’ll be in a better position to see if your chart of accounts and financials are set up in a way that will be supportive for you.”
Pro Tip – If they aren’t asking questions about your business, they aren’t thinking the right way. A great bookkeeper will be hammering you with questions…not just trying to answer questions they way they think you want to hear.
Question #3
Q – How do you leverage technology in Bookkeeping?
The Fail Answer:
“I’m comfortable with whatever software you use. I’ve had experience with QuickBooks, Sage, SAP, etc. etc.”
The Pro Answer:
“We should be able to get at least 80% of your day-to-day transactions automated. I’m a huge believer in cloud-based accounting technology. If you’re not on one now, we can evaluate what the right fit will be. We must consider the nature of your business and make sure the marketplace (think app store) has everything you need. You definitely want a few interconnected software solutions to streamline the bookkeeping. Things such as:
– Receipt tracking/processing
– Employee time tracking app (if you charge for hours spent)
– Payroll
– Invoicing
– Task management
– Electronic payment processing (both collections and payables)”
Pro Tip – Accounting technology has come a long way! Having the best payroll services can completely change your accounting department. Not every bookkeeper is up to date on current technology and how to effectively use it so be sure to check into corporate payroll services from Acclime!
We hope these questions help you find your next bookkeeper! If you have questions or want to talk about how to set up a successful accounting department, click here!
Look out for our part two, coming soon.
Why Most Entrepreneurs’ Books Are A Hot Mess
Let’s face it. Accounting for entrepreneurs is broken. Well, it’s not that the accounting is “technically broken” – just that it’s broken as it relates to entrepreneurs. That’s exactly why our founder Spencer Sheinin started his company Shift Financial Insights. Prior to Shift, Spencer was advising and investing in emerging businesses, and each and every single one of them had the same problem: their relationship with their books was a source of major pain, rather than a source of power, as it should be. Entrepreneurs avoided their books and their bookkeepers.
The result? A hot, steaming mess of frustration…and even embarrassment.
This blog is the first in a three-part series where we dive into the three key reasons why entrepreneurs books are a hot mess and then we follow-up with what you can do to avoid it.
Reason #1: The Language Barrier
Imagine you understood with perfect clarity what EVERY number in your financials meant and exactly what to do about it. How much better and stronger would your business be?
Now, imagine having that knowledge and losing it. How much would your business suffer?
Obviously, a lot. And that’s exactly what’s happening in your business. You didn’t have the clarity, to begin with. Every day that goes by when you are not on top of your numbers, your business is suffering.
Pretend you have a once in a lifetime opportunity, the biggest prospect of your life. Today is the only time they have available. You’ve set up a video call with them with your big pitch (that you’ve pulled a couple all-nighters, and burned out your coffee machine, preparing for it). You’re traveling and don’t have access to wifi and you don’t have a private room to take the call. No problem.
You’ll plan to call-in from your phone and use your earphones to block out the surrounding noise. You find a decent background (a focus and blank wall…nice!), check your hair and teeth (no leftover salad…check) and go to dial in. Except…crap…new iPhone…old earphones. You know, the annoying lightning cable Apple changed their phones to. The ones that don’t connect with any other earphones (at least, not without that little connector device)? You do your best, fumbling through the call putting on an effort that’s at best, 50% of what you are capable of. Perhaps it’s the perfect time to switch to advancements like wireless pbx phones.
This disaster was caused by a failure between two elements that don’t match or can’t communicate. The same thing is happening in your business every day!
Accountants deliver information the only way they know how: the way they were trained in accounting school. So, when financial information is delivered, it isn’t delivered in plain English, the way entrepreneurs UNDERSTAND and NEED (most entrepreneurs never went to accounting school. In fact, they stayed as far away as possible). Accountants and entrepreneurs speak different languages that are just as incompatible as lightning and standard connectors – it doesn’t work!
How many disasters are you facing every day because you are using “lightning connectors” and your accountant uses the standard connector? What disasters are you not seeing because you and your accountant have a language barrier?
The truth is, your books are telling you a story and you’re not hearing it. Your business is suffering because of it.
Our next blog describes the second key reason entrepreneurs books are a hot mess.
After that, we’ll get onto the surprisingly simple path to financial clarity and introduce you to simple tools to dominate your numbers. The best part…you don’t have to go to accounting school to do it. You don’t even have to learn more about accounting than you do now. And it’s free!
Want to be more empowered but don’t know where to start? Get in touch with us to learn more about our services or coaching programs to help you direct your accounting department so you can turn your accounting pain into a power.