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January 2008

in this issue

Business Scenario
- Choosing accounting help


Accounting Tip

Did You Know ?


Sandy's Recommendations

Next Issue - It's Tax Time Again !


about e-ccounting

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.
Back-issues are 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 agency.

about accountrain

accountrain simplifies the client / accountant relationship.

accountrain offers a unique combination of knowledge and people-skills to solve all your accounting needs.

accountrain specializes in the how's and why's of accounting.

Is accountrain the right accounting team for you? Find out more....

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Please forward this to anyone you feel may benefit from some free accounting tips. They'll be glad you did.

Sandy's Question Corner

Do you have an accounting question? Send it to us at accountrain@magma.ca

  • Business Scenario
    - Choosing accounting help
  • "I don't worry about taxes, I've got people".

    Does that sound familiar?
    It should, it's from a current H&R Block Commercial.

    Can it be that easy?

    Yes, it can, if you have the right people!
    Your accounting needs will depend on the size of your company, your industry and other factors, ie are you incorporated, a sole proprietor or partnership.

    So, what are the options when choosing accounting help?

  • Answer
  • There are many people who can assist with the bookkeeping and accounting functions of a firm.
    Let's start by explaining the difference between the tasks an accountant would have versus a bookkeeper.

    A bookkeeper is exactly that, someone who will keep the books, maintain the accounting records. In other words, handle the day to day functions, which include:

    • Process vendor bills and issue cheques.
    • Create customer invoices and apply deposits.
    • Bank reconciliations.
    • Handle government payments, ie. GST.
    • Maintain filing.

    Depending on the size of the company, you may need a controller or supervisor to oversee the bookkeeper (s) and accounting department. This will be someone with more experience and perhaps a (CGA or CMA) designation.
    Large firms may have a CA on staff acting as the VP of Finance or CFO (Chief Financial Officer).

    External CA's are also responsible for finalizing corporate year-ends, by providing one of the following:

    • A notice to reader
    • A review
    • or
    • An Audit

  • Accounting Tip
  • On occassion accountrain has been asked to provide accounting questions to ask at an interview.

    But, how will you know if the answers are correct?

    When hiring accounting staff, have someone with a strong accounting background assist with the entire hiring process including the interview itself, as well as testing on the actual accounting software.

    Believe it or not, we have requests from new hires in dire need of "emergency" training on accounting software packages. They have accepted a job and are not "up to speed" on the necessary software, as indicated on their resume!

  • Did You Know ?
  • Accounting mistakes can be very time-consuming to untangle. Outsourcing can save you money in the end.
    To avoid wasting time and money, ensure all accounting functions are on track. Did you know, you can hire a professional for the following, to:

    • Review your accounting software, policies and procedures.
    • Ensure the daily tasks are done correctly and in a timely manner.
    • Train processes and software.
    • Assist with government reporting, as well as other external reporting.
    • Finalize month-end, quarter-end and year-end.

    The most common accounting task to outsource is payroll. There are many reputable payroll services available . The cost per pay is minimal and the service does all the work including:

    • CPP, EI and tax caculations
    • Monthly source deduction remittance to CRA
    • ROE upon termination of an employee
    • T4's and T4 Summary
    For more Did You Knows?
  • Definition(s)
  • CA is the acronym for Chartered Accountant. In Canada this is the only accounting professional that has the authority to sign an audited financial statement. CA's are responsible for the final figures and therefore follow the guidelines of the CICA Handbook closely. Although a CA can perform bookkeeping and other accounting tasks, they have many specialties, ie Tax Consulting & Preparation, including Corporate and US, Auditing, Estate & Succession Planning, Business Valuations, Forensic and Investigative Accounting, Cash Flow Management, Business Planning, etc. and should therefore be used as part of the accounting team focusing on their specialties while leaving the other bookkeeping and accounting tasks for intermediate level accounting staff and / or consultants.

    CGA - acronym for Certified General Accountant CMA - acronym for Certified Management Accountant (formerly RIA - acronym for Registered Industrial Accountant)

    The CGA and CMA have become more and more similar over the years. They are both designations usually sought after while working in an accounting position. Individuals with either designation are capable of a variety of accounting functions depending on what level they have achieved in the program as well as the experience they have acquired.
    When hiring anyone to handle your accounting tasks, although a designation is an asset, also ensure they are experienced for the task at hand and check references whenever possible.

    For more definitions ...
  • Sandy's Recommendations
  • Take advantage of the roles of each, hense "have an accounting team". Let your employees handle the daily rountines and entries, if they are not fully qualified have someone who is, oversee there work.

    Have external specialists do the taxes, as well as assist with investing, forecasting and working towards the future goals of the company.

    Referrals are always best. Just because someone has a designation, it doesn't mean they've got the experience to back it up. The best candidate is someone with the combination of both.

  • Next Issue - It's Tax Time Again !
  • Tax time shouldn't make you nervous! How can you best deal with this dreadful time of year?
    In the next issue we will:

    • Define what each business type is responsible for.
    • Establish deadlines.
    • Offer suggestions on saving money and getting organized.