e-ccounting is a monthly
newsletter focusing on accounting tips and solutions.
Our mission is to educate our clients, students and
readers by offering these resources in response to
your ongoing questions.
It is our objective to
gather information and provide easy access for your
current and future needs.
available on the accountrain website.
These tips are not complete answers to complex
questions. We therefore recommend, when in doubt,
contact the professionals or government
accountrain simplifies the client /
accountrain offers a unique
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Important GST Notice - Effective Jan 1, 2008
As proposed, the GST has decreased to 5%. What
does this mean to you? As of Jan 1, 2008 any
vendors / suppliers that you are dealing with should
only charge 5% for products and / or services dated as
of Jan 1st. Anything before will remain at 6%.
For your invoicing purposes, the same thing applies.
Any product and / or service you provide after Jan 1,
2008 should be charged at 5% GST, anything before
will remain at the old rate of 6%.
For additional information, clients contact
accountrain. For others, contact the
Many people procrastinate when accounting is
involved. This is for many reasons. It's always easier
to do the stuff you are most comfortable with and leave
the stuff you have difficulty with, or just don't like
Imagine my surprise when someone told me they'd
rather go to the dentist than to their accountant, ouch!
Accounting is an easy task to set aside, but before you
know it another year has gone by and once again
you're scrambling to gather all the required accounting
information to finalize your year-end.
Believe it or not, like a doctor or dentist, some
companies don't even have an accountant until they
really need it, and in the accounting world, that is at
Don't wait until year-end to (a) hire an accountant or
(b) get to your accounting tasks.
a task that needs to be done on a regular basis, like
marketing, admin and servicing customers.
If you build accounting into your weekly and monthly
routines, you will not be scrambling at year-end.
A few hints for keeping on top of your Accounts
Payables and Accounts Receivables:
- Enter vendor invoices regularly and code
- Decide how often to issue cheques and try and
stick to this schedule (excluding emergencies).
- Deposit money coming in at least weekly.
- Apply those payments to your outstanding AR list
so it's always up to date.
- Keep on top of the filing.
We are often asked, what is the "normal" turn around
for a month-end and year-end?
A typical month-end can be finalized 2-3 weeks after
the month is over. Originally this was to ensure the
bank statement(s) were in and the banks were
Now that bank information is
available online, you should still allow enough time for
all vendor invoices to arrive and for your sales figures
to also be complete.
A typical year-end would start with the final month
being closed and add on an additional month or two
and sometimes even longer (depending on the size of
the company) to provide enough time to finalize all
figures, reconcile all accounts and for preparing an
information package for the tax preparer. (more about
this in the January issue).
Your tax preparer can
help you determine what would make sense for your
|Did You Know ?
The year-end for sole proprietor and partnership
companies is automatically December 31st, to
coincide with personal income tax.
The year-end for corporations is often the anniversary
date of the first year.
BUT, did you know, you can change your corporations'
Many corporations tend to choose a year-end that is
industry specific or choose a year-end to fall
in a less busy time.
Get a Chartered accountant to make the request, via
letter / form, to the government. A reasonable request
is rarely denied.
||For more Did You Knows?
Fiscal year vs calendar year.
We all know what a calendar year is: January to
A fiscal year is the twelve month period covering the
As mentioned above, for sole-
proprietors and partnerships, the fiscal year end
matches the calendar year.
However, the year end for a corporation reflects on it's
anniversary date. A popular year-end in Ottawa, being
a government town, and to coincide with the
government year-end, is March 31st.
There is no right, wrong, good or bad year-end. It
should make sense to your business. As mentioned,
since year-end prep takes additional time many
companies choose a quieter time for their year-end.
For more definitions ...
Plan Ahead !
Reconciling the bank accounts on a monthly basis is
an absolute must. If you don't have resources for this,
hire an accounting consultant to help with this as well
as any other accounting-related tasks your staff may
not be completing due to time restraints or not
Another hint is to have a professional perform a review
on a quarterly basis. This will prevent mistakes
carrying over month after month. In the end, this will
save both time and money.
Is your staff taking the time to review accounts on a
regular basis? Ask them!
Accounts that should be reviewed regularly are:
- Bank Account(s)
- Prepaid Expenses
- Accounts Receivable
- Accrued Liabilities
- Deferred Revenue
- Accounts Payable
Other accounts needing attention:
- Capital (Fixed) Assets
- Other Payables
|Next Issue - Choosing accounting help
CA, CGA, CMA, bookkeepers - what's the difference,
and who should be doing what?
In the next issue
- Define the different accounting designations.
- Discuss the roles each should play.
- Offer suggestions on dividing accounting tasks,
both in-house and what can be out-sourced.