FREQUENTLY ASKED QUESTIONS

4-A conducts regular presentations on these topics. Please contact us if you’re interested.

When Should I Incorporate My Business?


Incorporating a business should be considered when you need a tax plan (when you are not using all the cash) and to limit your exposure to risk and liabilities.




What Are the Costs Related to Incorporation?


Legal Fees

  • One-time setup costs
  • Annual filing fees
Accounting Fees
  • Annual Corporate Tax Return and Financials (not just a personal tax return)




Why Is It Important for my Business to be a Separate Entity?


  • Having your business separate from your personal financial situation is important for tax, income and liability purposes.
  • Incorporating means your business will have a separate bank account, credit cards and set of records.




What are the Benefits of Incorporation?


Incorporation of your business allows you to:

  • Properly plan to maximize profits and reduce risks
  • Tax savings
  • Possible elimination of CPP contribution
  • Income splitting (dividends versus salary for tax savings)





INCORPORATION

What are the Options to Ensure I have Enough Cash Flow for my Business?


  • Consider Alternatives to having shareholders paying the bills
  • Use leverage to grow (LOC, leasing and term loans)
  • Look at options such as finance/lease vs. renting/purchasing with cash
  • Assess ratios related to: A/R turnover, Inventory turnover, Non utilized capital assets




Is it all about INCREASING Sales to grow my Business?


It’s not always about increasing sales to ensure financial growth. Other things to consider are:

  • Reducing the cost of sales to increase margins
  • Reducing wastage (increase billable/recoverable time)
  • Being efficient and watching margins and focusing on areas such as Gross profit / Net Profit / EBITDA




What about Banks? How can they help my Business Grow?


Banks are your friend. They can help your business by providing operating capital through:

  • Lines of Credit – 75% of A/R <90 days plus current inventory
  • Term loans – existing assets that are not financed




What About Tax Planning?


  • Tax planning is critical for ensuring your business is compliant with the government yet provides a possible tax savings to maximize benefits for the company (i.e. holding cash in company).
  • Another area that we can assist you with is planning for your retirement by the proper corporate structure.





FINANCIAL GROWTH

Why do I need Corporate Bookkeeping?


As a separate entity your Corporation will need the following:

  • Monthly bank account reconciliations
  • Monthly credit card account reconciliations
  • A record of Personal expenses vs. Corporate expenses




How do I keep Track of my Books?


As a business owner you have a variety of ways to track your books. You can choose to do it yourself or hire a professional Bookkeeper. This depends on your time and your budget. It is highly recommended that you enlist the services of a professional bookkeeper however if you choose to do it on your own we recommend using recognized software programs to help you such as:

  • Simply Accounting
  • Quickbooks
  • Excel Spreadsheet Synoptic




What Items Need to be Recorded or Monitored?


  • Accounts Receivables (remember to Invoice regularly)
  • Record Expenses
  • Accounts Payable (Note: Capital Assets are not a direct expense when purchased)
  • Monitor cash flow and profitability monthly and by project
  • Always be ready to make the hard decisions on customers/product lines.




What do I need for Year-end Preparation?


  • Provide what the accountant needs to reduce time and billing
  • Demonstration of year-end binder





CORPORATE BOOKKEEPING

When Should I Incorporate My Business?


Incorporating a business should be considered when you need a tax plan (when you are not using all the cash) and to limit your exposure to risk and liabilities.




What Are the Costs Related to Incorporation?


Legal Fees

  • One-time setup costs
  • Annual filing fees
Accounting Fees
  • Annual Corporate Tax Return and Financials (not just a personal tax return)




Why Is It Important for my Business to be a Separate Entity?


  • Having your business separate from your personal financial situation is important for tax, income and liability purposes.
  • Incorporating means your business will have a separate bank account, credit cards and set of records.




What are the Benefits of Incorporation?


Incorporation of your business allows you to:

  • Properly plan to maximize profits and reduce risks
  • Tax savings
  • Possible elimination of CPP contribution
  • Income splitting (dividends versus salary for tax savings)





TAX PLANNING & SUCCESSION PLANNING

What are the Options to Ensure I have Enough Cash Flow for my Business?


  • Consider Alternatives to having shareholders paying the bills
  • Use leverage to grow (LOC, leasing and term loans)
  • Look at options such as finance/lease vs. renting/purchasing with cash
  • Assess ratios related to: A/R turnover, Inventory turnover, Non utilized capital assets




Is it all about INCREASING Sales to grow my Business?


It’s not always about increasing sales to ensure financial growth. Other things to consider are:

  • Reducing the cost of sales to increase margins
  • Reducing wastage (increase billable/recoverable time)
  • Being efficient and watching margins and focusing on areas such as Gross profit / Net Profit / EBITDA




What about Banks? How can they help my Business Grow?


Banks are your friend. They can help your business by providing operating capital through:

  • Lines of Credit – 75% of A/R <90 days plus current inventory
  • Term loans – existing assets that are not financed




What About Tax Planning?


  • Tax planning is critical for ensuring your business is compliant with the government yet provides a possible tax savings to maximize benefits for the company (i.e. holding cash in company).
  • Another area that we can assist you with is planning for your retirement by the proper corporate structure.





FINANCIAL MONITORING & REPORTING

When Should I Incorporate My Business?


Incorporating a business should be considered when you need a tax plan (when you are not using all the cash) and to limit your exposure to risk and liabilities.




What Are the Costs Related to Incorporation?


Legal Fees

  • One-time setup costs
  • Annual filing fees
Accounting Fees
  • Annual Corporate Tax Return and Financials (not just a personal tax return)




Why Is It Important for my Business to be a Separate Entity?


  • Having your business separate from your personal financial situation is important for tax, income and liability purposes.
  • Incorporating means your business will have a separate bank account, credit cards and set of records.




What are the Benefits of Incorporation?


Incorporation of your business allows you to:

  • Properly plan to maximize profits and reduce risks
  • Tax savings
  • Possible elimination of CPP contribution
  • Income splitting (dividends versus salary for tax savings)





PERSONAL TAXES

4-A PROFESSIONAL SERVICES

Our team caters to businesses and corporations in and around Calgary as well as across Canada who wish to increase their profits and government compliance. We have experience in managing large and small businesses – increasing profitability and compliance all the while creating the opportunity for owners to focus on their areas of expertise.

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