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News from Stratking Accounting and Tax services, tax updates and business news

il y a 2 mois

To get press releases, articles, tax updates, small business strategies etc from Stratking Accounting and Tax visit our Blog at:

http://www.stratkingaccountingandtax.com/News-or-Reviews.html

Articles

Selling your business - 10 things to consider!

il y a 2 mois

Recently I successfully concluded the sale of the wealth management division of Stratking Advisory Services Inc. as part of a restructuring plan.

Here are a few points I learnt from that exercise:

1. Ensure you are selling at the right time

It is said that we should "buy low and sell high". Timing is everything. Are you selling high or low? Is this the right time? If it is not, what are you doing to prepare the business for sale? Maybe you have never reached that high in your gross revenue yet? Maybe the markets and economy is good and so you may fetch a better price? It is also said that time in the market is more important than timing the market..so should you continue the business a few more years to the extent that the price should go up the longer you hold it? Consider these things carefully.

2. Ensure you are selling to the right business or person

You have to take your time and do lots of research of your potential buyers. Are they are good fit for you and your clients? Do you like the owner of the other business? Would you be able to get along with him or her as a client or employee?Do they bring new technology, know how, distribution channels and access to markets that would enhance your business going forward so that they do not fail and destroy what you built. If the buyer is successful then you are successful.

3. Get your books and records in order

Have your completed your last years financial statements? Have you filed your tax returns? Have you completed your annual filings? Are your corporate records in order? In this regard seek the services of a professional Accountant and Lawyer.

4. Get your business professionally valued

You may have an idea of what your business is worth from your knowledge of your industry, but you may be short changing yourself without getting the independent opinion of a professional business valuator.

5. What are you selling?

Are you selling the inventory alone, clients alone, assets or everything?

6. What is the Plan B?

OK, you are going to sell the business, but then what? Are you going into retirement? Do you have enough money to retire now? Are you going to start another business and have you done a business plan for this? What would be the cost of starting the new business and before it becomes profitable?

7. Do you have time to stay around for a while?

Well you may be thinking of selling your business and retire to the Caribbean! Would that be nice? The only thing is that many buyers require you to hang around a bit to assist with the transition. How long will that be? Is the cost of that time factored in the price? You need to factor this in your plans.

8. Have a communications plan in place

You need to put in place a communications plan pre and post sale to address issues your clients, employees, suppliers and business partners may have. So there need to be an internal and external communications plan. Hire a professional marketing consultant if you do not have the expertise in this area.

9. Have you factored in restructuring costs?

You have to take some time and compute what your selling costs would be. This needs to be deducted from your estimated disposal proceeds to determine your net cash flow arising from the sale. Your Accountant should be able to assist in this area.

10. Risk assessment

Selling a business can be a risky process. You need to do a holistic risk assessment of the financial, reputational,career, marketing, tax and business risks of proceeding with the sale. Unsure, then bring in a risk management professional to give you an independent assessment.

These are a few of my top of the mind ideas worthy of sharing with you and I hope they were beneficial.

Dane King is the President of Stratking Advisory Services Inc., principal accountant with ProfitPAT Accounting and Tax and marketing consultant of Chartered Marketer For Hire.

For over 20 years Dane had been helping professionals,professionally owned businesses an financial services firms grow their wealth, increase profits and reduce taxes.

Dane is a Chartered Global Management Accountant, Registered Public Accountant, Chartered Management Accountant(UK),Chartered Marketer and Financial Management Advisor. He is an author and public speaker on a variety of small business, tax, wealth management and marketing issues.

He can be reached at 1-888-865-3870 or service@stratking.org

All work is good work

il y a 2 mois

Today is Labor Day in Canada.

So I say Happy Labor Day to all my Canadian friends, family, business acquaintances and social media connections!

All work is Good Work!

I say that because:

1.    When we work we honor God with our gifts or talents he has given us

2.    All experience is good experience. My first job in Canada was as a Cashier at McDonalds. I learnt great customer service experience at McDonalds. This customer service training became a transferable skill I will use in future years with various employers and running my businesses. So rejoice in the work you get or have at this moment whilst remaining focused on your long term goals.

3.    Work keeps us occupied and therefore we are less likely to do idle things with our time

4.    Work is good to keep us mentally healthy

5.    No matter how small our pay is, pay is net cash flow inflow to help is pay the bills

6.    Work provides the opportunity to sharpen our skills and self-actualize. We should therefore sharpen the saw every day

7.    It allows us to provide our family and gives us a source of pride

On days like these I reflect on where I came from after landing on Canadian shores for the first time with all the uncertainties and hopes and dreams.

With persistent and proactive strategies each year my goal became nearer even though obstacles came my way.

I will also remember therefore all the Newcomers to Canada. My suggestion is to make a plan and work the plan. Get work as soon as possible that may provide you with transferable skills for your dream job and keep you occupied and bring in money so you can better focus on your long term goals. Time is money, so ensure when you trade time for money, that it aligns with your long term goals.

Seek professional advice early so you do not waste your time and money quickly.

In order to increase your chances of success, consider consulting with a Financial Advisor, Tax Accountant, Business Advisor, Mentor, Recruiter and getting legal or immigration advice.

If you are employed now, give thanks for the work that you have for the good Lord gives and he takes away! Surely, if we have today and may not have tomorrow, then our work is not entirely as a result of our hands but provision from a higher force, bigger than us.

Remember you can also seek employment or become self-employed and work for yourself in the same area you are seeking a job for. There are many advantages of being your own boss. You do not have to start in Canada as an employee if you can start with your own business from the scratch. Your path may not be the same as others.

I give you a challenge for tomorrow! When you return to work, tell your boss THANKS for hiring you and training you. Often we forget to give thanks even to our Managers and Supervisors.

This leads me to the other point that in work we must serve others in humility. Never let our position or job title go to our head and see our work as serving others. That way we will be focused on making sure our employer, colleagues, suppliers and customers are satisfied.

Happy Labor Day!

Dane King is the Principal Accountant and Business Advisor with Stratking Accounting and Tax Professional Corporation, the full service accounting based in Richmond Hill, Ontario, proudly serving professionals, professional services and financial services firms. He is also the Chief Marketing Consultant with Chartered Marketer For Hire the full service marketing firm for professionals and professional services firms.

Dane is a Chartered Professional Accountant (CPA), Certified Management Accountant (CMA), Chartered Global Management Accountant (CGMA), Chartered Marketer and Financial Management Advisor (FMA). He is a former Lecturer in Accounting and Professor Taxation, Marketing and Retirement Planning.

He can be reached at 1-888-865-3870 ext. 101 or email service@stratkingaccountingandtax.com.

Tax issues relating to Late Fees charged by Child Day Care providers

il y a 2 mois

ome Registered Child Care providers charge parents a late fee if they arrive late to pick up their children. I understand that this is to discourage parents from arriving late to pick up their children. It is also somewhat of an administrative penalty, charged to recover the time taking care of your child until you pick him/her up.

However it is my view that: 
1. The Day Care provider should issue parents a child care tax receipt including the late fee, which may be eligible as a child care expense
2. Parents may deduct against income this fee when filing their tax return once the child is under 16 years of age and for other reasons mentioned below
3. The Day Care provider must properly account for late fee transactions in accordance with CRA guidelines by reporting it as business income and deduct and remit payroll taxes on late fee paid to support staff once collected
4. A late fee is much different than a typical administrative penalty

You or your spouse or common-law partner may be able to claim a deduction for expenses that were incurred for someone to look after your child so that one of you could earn income, go to school, or conduct research. The expenses are deductible only if, at some time in the year, the child was under 16 years of age or had an impairment in physical or mental functions. Generally, only the spouse or common-law partner with the lower net income (even if it is zero) can claim these expenses.

The following dollar limits currently apply when determining the amount of expenses that can be deducted:
• For each child who is eligible for the Disability Tax Credit, the deduction limit is $10,000;
• For each child who is under seven years of age at the end of the year, the deduction limit is $7,000; and
• For each child who is under 16 years of age or had an impairment in physical or mental functions, the deduction limit is $4,000.

The October 30, 2014 announcement included a proposal to increase each of the deduction dollar limits by $1,000 for 2015 and subsequent tax years.

You can claim child care expenses on Line 214 of your personal tax return that were incurred for services provided in 2015. These include payments made to:
• caregivers providing child care services;
• day nursery schools and daycare centres;
• educational institutions, for the part of the fees that relate to child care services;
• day camps and day sports schools where the primary goal of the camp is to care for children (an institution offering a sports study program is not a sports school); or
• boarding schools, overnight sports schools, or camps where lodging is involved

I would like to bring to your attention Income Tax Folio, S1-F3-C1, Child Care Expense Deduction, Series 1: Individuals, Folio 3: Family Unit Issues, Chapter 1: Child Care Expense Deduction, Excluded child care expenses published by the Canadian Revenue Agency. 1.20 Specifically excluded from the definition of child care expense in subsection 63(3) are:
• medical expenses described in subsection 118.2(2) (see Income Tax Folio S1 F1 C1 ) and any other expenses for medical or hospital care;
• clothing, transportation or education costs; and
• board and lodging expenses, except to the extent they are included in the total charges for attendance at an overnight sports school or a boarding school or camp and those total charges do not exceed the product obtained when multiplying the periodic child care expense amount in respect of the child for the year by the number of weeks during which the child attended the school or camp.

Therefore, late fees are not specifically excluded from the definition of child care expenses.

When parents/guardians are late to pick up their children, the Day Care staff is actually providing care for your children until they arrive, which is not like an administrative penalty such as failing to file your taxes on time.

Therefore logically, the late fee for service beyond the regular hours should be considered a child care expense and the fee paid should be included in the child care tax receipt received at the end of the year from the Day Care.

When the Day Care Provider does not provide a receipt, accepts payment only in cash and uses your cash to pay the support staff that provided the care, this gives rise to various questions:
1. Whether the Day Care is including the cash receipt in its business income?
2. Whether the support staff is subsequently paid via normal payroll subject to deduction of payroll taxes?

If the cash received is paid directly to support staff and not accounted for as business income then this may be considered tax evasion as the Day Care is evading the income tax on this income.

Secondly, if the Day Care staff is paid the cash directly, then this may also be considered tax evasion since the payment should be subject to deduction of payroll taxes in an employer/employee relationship.

The irony of the whole situation is that when parents arrive early they are not given a credit against their fees, since in such cases the support staff may be able to go home early but on that odd time that they arrive late they are charged a late fee.

I think Day Care Providers should therefore apply discretion in applying late fees depending on whether the parent Parent/Guardian is persistently late or not.

Either way, considering the tax issues involved, the sensitivity regarding maintaining good client relationships and managing a viable business, it may make sense to charge a fee that makes economic sense to the Day Care, but also provide a benefit to hard working parents who may have missed a bus or stuck in traffic driving to pick up the children. This late fee would be of benefit to the parents if despite they reached late and paid an extra fee, it is included in their child care tax receipt and they are able to deduct it as a child care expense, which in my view it is.

I also think that the Ministry of Education and College of Early Childhood Educators should ensure that there is consistency of treatment on this issue among all Day Care Providers and I look forward to an interpretation bulletin from the CRA on this matter.

Dane King is the Principal Accountant and Business Advisor with Stratking Accounting and Tax Professional Corporation, the full service accounting based in Richmond Hill, Ontario, proudly serving professionals, professional services and financial services firms.

Dane is a Chartered Professional Accountant (CPA), Certified Management Accountant (CMA), Chartered Global Management Accountant (CGMA), and Financial Management Advisor (FMA). He is a former Lecturer in Accounting and Professor Taxation.

He can be reached at 1-888-865-3870 or email service@stratkingaccountingandtax.com

How to develop the winning Business Plan

il y a 2 mois

In the last 5 years I have established, grown, changed or sold 5 businesses. One a year! I had lots of fun. I have helped numerous professionals and start-up businesses develop winning business plans to secure funding to get started or take their existing business to the next level and helped them execute the marketing strategies in the marketing plan.

I read recently a quote by Nelson Mandela. He said, “I never lose, I either win or learn”. I have therefore approached starting businesses and investing in businesses with this attitude. All experience is good experience. Being an entrepreneur is taking calculated risks and experimenting even if failure occurs. Failure will tell you that your assumptions were wrong and you will learn to do things differently the next time.  So with developing the winning business plan, it will either help you win in your local market place or learn more about your business as you do research and test your ideas.

If you are not afraid to fail then you will succeed. If you are afraid to fail, you will fail to start anything and therefore fail to take your life to the next level, where you want to be.

A good business plan should be the vehicle to take you where you want to be with actionable steps.

Enough said about that!

For over 20 years I have helped many businesses and professionals develop and execute practical and focused business plans and marketing plans.

In this summary article I would like to share a few of the top strategies from my popular seminar and workshop called, “Developing the winning Business Plan” delivered to professional associations and networking groups in the GTA.

Recognizing that professionals like to see the “executive summary” for a quick read here are a few helpful tips to get you going.

Begin with the client in mind

If you don’t do this, your Plan is sure to fail. You are not doing a Business Plan to make you feel good about yourself or your career. You are doing it to attract, retain and expand customers profitably and efficiently.

 Clarify the key objectives of the business plan

This will help you keep focused when researching and writing and ensure that when you are complete anyone will conclude that your plan will achieve the objectives

 Keep it short and simple!

Less is More! Don’t know how to keep it short and still give the reader what they want? Give me a call.

 Spend more time implementing and testing the business concept than writing

Jeff Hyman of Retrofit, says “time is your enemy”. My boss once told me in my formative finance years, “Mr. King, why are you trying to create a Mercedes Benz when we only have time for a Mini”. I always remember that. After that feedback I changed my approach to completing the Board Balance Scorecard reporting project I was working on and delivered the new Board Report in Balanced Scorecard format.

 Customize the Business Plan to what your Banker or Lender is looking for

Before writing your Plan contact your target market to find out what they would like to see in the Business Plan

Determine if you have the skills to write a convincing and user friendly Business Plan

We cannot be all things to all people. If you don’t have the skill in writing, hire a Business Planning specialist to write your Plan. Not all Business Planners are good Business Plan writers. They may be good with numbers but not good in writing or presenting.

To book a speaking engagement for my winning seminar “Developing the winning Business plan”, give me call!

 Until then, remember, “a good plan is an implemented plan”.

Dane King is the Principal Accountant and Business Advisor with Stratking Accounting and Tax Professional Corporation, the full service accounting based in Richmond Hill, Ontario, proudly serving professionals, professional services and financial services firms. He is also the Chief Marketing Consultant with Chartered Marketer For Hire the full service marketing firm for professionals and professional services firms.

Dane is a Chartered Professional Accountant (CPA), Certified Management Accountant (CMA), Chartered Global Management Accountant (CGMA), Chartered Marketer and Financial Management Advisor (FMA). He is a former Lecturer in Accounting and Professor Taxation.

He can be reached at 1-888-865-3870 ext. 101 or email service@stratkingaccountingandtax.com.

My dream of government funding to new businesses based on the strength of the business plan – Venture Loan

il y a 2 mois

Governments worldwide always talk of the importance of the small business sector for job growth; however when it comes to placing the money where the mouth is, many countries often fall short.

The lending formula is often complicated and involves financial intermediaries who charge high premiums to approve government funded loans.

The objectives of the banks to make a profit then make government money to help small businesses grow even more difficult to get. A and B+ clients who may be able to get funding using their own resources, are easier approved by the Banks and get the money than bright underprivileged entrepreneurs from low income areas or new immigrants willing to start their own business than go work for somebody else.

I would like to recommend that the Canadian government supports the growth of small businesses in Canada purely on the strength of the business plan, which is evaluated by a government agency separate from the mainstream banking system.

In my years as an Accountant and Marketing Consultant I have seen many entrepreneurs have great ideas, strong business concepts, excellent academic backgrounds and past experience, but do not have the capital to get the dream of their new business off the ground. They may also be declined by the Banks based on their tough lending criteria.

On the other hand, we have heard stories of parents, friends and relatives digging in their pockets to give some seed capital to a loved one who have a great idea, when the banks and the government fail to support that entrepreneur with a business loan or business credit line.

I would like to see the government do the same for deserving Canadian citizens even if they do not have good credit or any collateral.

The government gives money to charities and various not for profits to support various causes and does not ask for any collateral. On the other hand a Venture Loan program will result in more jobs, result in a greater income tax base for the government and help many unemployed people get a job they can rely on - their own!

Here are the simple criteria I would suggest the funding to be based on for a “Venture Loan”:

Strength of the business plan based on:

1.    Business concept

2.    Relevant educational background of the applicant

3.    Past industry experience

4.    Leadership skills of applicant

5.    Likelihood of success of the marketing plan

6.    Demand for the product or service

7.    Potential of business to generate new jobs in Canada

8.    Financial feasibility

9.    Demonstration of innovation and creativity

Loan maximum amount of $500,000 to be repaid in 10 years. This will be a loan pegged to the prime lending rate in effect at the time of the loan. Applicants will sign a standard loan agreement of course, should they be approved. It will finance operating capital and fixed assets expenses.

There will be a standard business plan template to be used by all applicants to level the playing field.

Each of the criteria above will be rated on a point system between 1 -10 (10 being excellent).

Applicants business plans getting an overall 70% rating and above will receive the “Venture Loan” applied for to the maximum of $500,000.

Simple like that! This will make it easier for more people to get funding to start their businesses in Canada.

This is a starting point for discussion. I am sure there will be many with better ideas than myself who can improve upon my suggestion.

I think many people would like to start their own businesses and if they had the start-up money, they would jump right into it.

This suggestion will ensure that dreams come through!

 

Dane King is the Principal Accountant and Business Advisor with Stratking Accounting and Tax Professional Corporation, the full service accounting firm based in Richmond Hill, Ontario, proudly serving professionals, professional services and financial services firms.

Dane is a Chartered Professional Accountant (CPA), Certified Management Accountant (CMA), Chartered Global Management Accountant (CGMA), Chartered Marketer, Financial Management Advisor (FMA) and Member of the Chartered Institute of Marketing (MCIM). He is a former Lecturer in Accounting and Professor Taxation, Marketing and Retirement Planning.

For over 23 years Dane has been helping businesses grow their profits, reduce taxes and improve the efficiency of their operations and helping individuals grow their wealth.

He can be reached at 1-888-865-3870 ext. 101 or email service@stratkingaccountingandtax.com.

How to get better results with your Tax Accountant

il y a 2 mois

Great! Tax season is over and my mind is much more relaxed to think of other things and write.

It is important for professionals to have a strong team supporting them with their medical, health, tax, business and mentoring needs. Stronger team, stronger results!

It also requires give and take to build and maintain a strong relationship.

I have had the distinct pleasure of working with some fabulous professionals and professional business owners in the last 6 years since I commenced offering accounting and tax services to the public.

Recently I thought of those tax clients I had better results with.

So here is my take on a few strategies to get better results with your Tax Accountant?

1. Always provide your new Tax Accountant with the previous year’s Notice of Assessment, Reassessment and Tax Return so he or she has a better picture of what your tax picture looks like.

2. Provide complete and accurate information to your Tax Accountant on a timely basis for better results.

3. Do tax planning with your Accountant early in the year to determine tax strategies for implementation before December 31st of the year.

4. Appoint your Tax Accountant as Authorized Representative with the Canada Revenue Agency so he or she can access your tax account online and communicate with the CRA, etc.

5. Inform your Tax Accountant annually of any life changing events that may or may not affect your tax situation.

6. Connect your Tax Accountant with your Banker, Financial Advisor or Investment Advisor, etc. and encourage them to collaborate to achieve better results for you.

7. Take ownership of your tax return. Review it in detail and ask your Tax Accountant any clarifying questions before filing.

 This list could be much longer but I know professionals are usually busy people!

Wishing you a great day and success with your taxes!

 

Dane King is a Chartered Professional Accountant and Business Advisor with Stratking Accounting and Tax Professional Corporation, the full service accounting firm based in Richmond Hill, Ontario, which professionals achieve their business and tax goals.

Dane is a Chartered Professional Accountant (CPA), Certified Management Accountant (CMA), Chartered Global Management Accountant (CGMA), and Financial Management Advisor (FMA). He is a former Lecturer in Accounting and Professor Retirement Planning, Marketing and Taxation. For over 20 years Dane has been helping corporations measure their success, increase profitability and grow revenue and helping individuals reduce taxes and grow their wealth.

He can be reached at 1-888-865-3870, 416-270-6608 or email service@stratkingaccountingandtax.com.