3 Questions to Ask a Prospective or Current Bookkeeping Provider

bookkeeping expert NewmarketThis is the time of year when many small and medium size business owners decide they need to get a better handle on their bookkeeping. Perhaps you want to get your 2014 bookkeeping up to date and you don’t want to do it yourself, or you want to start 2015 with a professional taking care of your bookkeeping needs so you can focus on your business. As you move forward into the New Year, here are 3 questions to ask a prospective or current bookkeeping provider:

1.  Do you offer fixed price invoicing?

Fixed pricing is an agreement between you and your provider which details what and when you the customer, will supply your provider with information. It also details what the service provider will do with that information. Whether it’s:

  • Reconciling the bank accounts
  • Determining payroll
  • Reviewing your accounts receivable and financials with you
  • Calculating and netfiling HST on time

or any number of additional responsibilities you would like handled by the professional. With this detailed agreement in place, your bookkeeping professional can give you a fixed price for the duration of the agreement.

What are the benefits of a fixed price agreement? There are NO SURPRISES. Each month you know exactly what your invoice will be. You can then budget and determine your cash flow. (But you can also include that as one of the services in the provider’s responsibilities).

2.  Are there any guarantees that I will get the service and accountability?

We guarantee you will receive value for our services and if for any reason you feel the service did not provide value in excess of the fee, we ask that you pay only for the value that you did receive.

You are getting a VALUE GUARANTEE.

3.  What other questions should I consider?

The options are almost unlimited. You could ask to have included in the agreement:

  • Payment options
  • Unlimited access to your service provider and staff (during reasonable business hours)
  • Long term fixed pricing
  • Audit assistance
  • Handling of communications on behalf of your company with CRA or any other reporting agency
  • Faster turnaround time

All for one PRE-DETERMINED monthly price!

As our industry moves forward, we are moving away from the ‘timesheet’ to determine what we invoice our customers. We are a knowledge-based provider and we want to be effective in helping you reach your goals. We want to FOCUS on your ‘wants’, not just on your ‘needs’. So if you’re thinking about making some bookkeeping changes, please contact us. If you think you might not know all the questions to ask, don’t worry. We will work together to ensure any questions and concerns are raised, on both our parts.

You can connect with us via telephone or email, leave a comment right here on the site or click the contact tab at the bottom of the screen if you are reading this post on the website.

Until next time,


3 Problematic Responses to Probing Bookkeeping Questions

bookkeeper NewmarketIn the last few weeks I’ve had an unusually large number of inquiries about hiring us for our accounting, bookkeeping and tax services. And as much as business owners need to ask numerous questions (which I strongly encourage), I also have a responsibility to ask numerous, sometimes probing questions. This ensures that I can help them make informed decisions and give them a sense of direction if something is not correct. Here are 3 recent questions that I asked and the problematic responses. P = Problematic.
1. Q -What is your corporate year end and when did you incorporate?
A- We incorporated July 8th 2014 and our first year end is July 31st 2015
P = Your year end cannot be more than 53 weeks after your incorporation. So either you change your first year end (i.e. June 30th 2015) or you can do a corporate return for July 2014 and July 2015. Unless there are unusual circumstances I usually suggest the June 30th date as it can still be costly to file a corporate return that only covers a 3 week period.

2. Q – When did your HST number become effective?
A – I thought when the person incorporated my company for me the application for an HST number was automatic, but they didn’t do that and I’ve been collecting HST. What do I do now?
P = Call or go online to Canada Revenue Agency (CRA) immediately and register for HST. Explain the situation to them and ask them how far back they will allow your HST number to be effective. It’s not usually more than 2 weeks. Whatever you’ve collected, you owe the CRA, no matter the effective HST date, but you will not be able to reduce that amount by the HST you paid until your HST comes into effect.

3. Q – As a corporation your account records need to be more detailed. How are you keeping track of your income, expenses and taxes now, along with assets, and are reconciliations being done?
A – We have a part-time administrative assistant that says she knows bookkeeping and does everything on a spreadsheet. But she’s never asked us for copies of our bank or charge card statements. Could that be a problem?
P = Yes, it could be a problem. All bank, charge card, loans and lines of credit accounts registered in the corporate name need to be reconciled. And, all assets need to be set-up as such in the Balance Sheet. Copies of the assets should be supplied for back-up when your corporate tax return is prepared. You also need details of the loans to and from the Shareholder(s). One of the problems when starting a business is accessing all the information that is required to ensure that it is successful and adheres to all the laws and rules. It’s also one of those situations that “You Don’t Know What You Don’t Know”, so you don’t even know what questions you should be asking.

I’m not suggesting you ask your Aunt, who runs a daycare business or your next door neighbour that has a part-time renovation business on his days off. They may be successful, or tell you they are, but they don’t know your business model. You need to consult with a professional about your specific needs; one who knows the questions that you perhaps haven’t considered. That professional will give you the knowledge to move forward at a cost less than those of possible accumulated penalties, interest and missed tax savings opportunities.

With open communication and mutual respect you and your accounting professional can move forward together in a long term successful relationship. And that’s what good business is all about.

I look forward to your feedback. Need help? You can connect with us via email or telephone, leave a comment right here on the site, or click the contact tab at the bottom of the screen if you are reading this post on the website.

Until next time,


Tax Audit from Hell? – Part 2

bookkeeper NewmarketA couple of weeks ago I thought this would be part two of a three part series, even though it was originally planned for two. But thankfully it appears we’re on the final leg of this very long and stressful journey. Let me take you back as to why this has been the tax audit from Hell.

In my previous blog, I finished with the auditor’s request for a 2011 personal breakdown of expenses and income. And, the income wasn’t just related to T4s and Child Tax Benefits. It related to every deposit made to all of their bank and investments accounts along with that of their children for all of 2011. The auditor wanted closing balances of all their accounts at 2010 and opening balances for 2012 which included but wasn’t limited to:

  • Mortgage statement
  • Childrens’ RESPs
  • TFSAs
  • RRSPs
  • investments accounts
  • Savings accounts

After supplying him with all the information he requested, he still needed bank copies of all their deposits that weren’t obvious, i.e., Child Tax Benefits direct deposits and personal tax return refund deposits etc., for the full year. It took my clients weeks for the bank to request and receive all of this old information. The auditor was not satisfied until he received a copy of the individual cheques deposited, front and back, along with the reason for my clients receiving the monies. If there weren’t cheques deposited, he wanted the details of the cash deposited, from the bank. We’re talking how many $10s, $20s, $50s etc. that were deposited. He was relentless. He even went so far as to telephone my client’s next door neighbour to ask why the neighbor had written a cheque to my client, FOR LESS THAN $400! Needless to say my client was upset and embarrassed, and the neighbour was shocked that an auditor would call and ask what he considered a private matter. Thankfully they have been neighbours for a very long time and my client had shared the details of what was going on.

For the last couple of months we had told the auditor we wanted this all resolved by the beginning of this month. My clients didn’t want this hanging over their head going into the busy holiday season, and there was nothing left for them to do or supply. When I contacted the auditor on a Monday near the end of November, he said he didn’t know if he would get to it before the holiday season, as he also had other accounts he was working on and he was going on holidays. When I asked him when his holidays were booked, he said he didn’t have to book them he could take time off whenever he wanted. That just didn’t sit right with me. So two days later, I called him and got the voice message that he was away on holidays but I could leave a message for his supervisor, which I did.

The following day the supervisor contacted me and explained that the auditor was on “a leave of absence” and since he had been monitoring the file, he was up to speed on the status. He said he felt everything was accounted for and he would report that no further action was required. He also said my clients would be receiving a letter, in a few weeks, indicating that the audit was finished and nothing further was required. I told my clients to be cautiously optimistic as there could be some minor interest or penalty on a couple of potential issues, but that it was over.

So what would you do if you were presented with an audit that delved so deeply into your business and/or personal transactions for a year? Do you have the paperwork and the answers? Are you comfortable dealing with CRA, and do you have the time and patience? Before you respond to an audit request, ask a professional’s opinion on:

  • The best way to proceed
  • How your records should be presented, and
  • Do you have any options as to the timing of the audit and the location where it is to be held?

Do you really want the auditor camped out at your dining room table for potentially weeks at a time? You need to know your rights, the laws and the extent that the CRA can disrupt your life and that of your family’s.

As always, I welcome your feedback. You can connect with me via email or telephone, leave a comment right here on the site or click the contact tab at the bottom of the screen if you are reading this blog post on the website.

Until next time,


Are you Prepared for an Audit from Hell? – Part ONE

bookkeeper NewmarketIn early May 2014 I received a call from a long-time client of mine. They just received a call from Canada Revenue Agency (CRA) saying they were being audited for the year 2011. My client is sharp. He didn’t panic or get angry, but simply asked “how do I know who you really are based on a telephone call?” And, “I want your request in a letter before I do anything further”. My client also contacted their CA as they weren’t sure who was to do what, and what was to happen next. Little did we know this would become the Audit from Hell for both my clients and me. Continue reading

5 Tips & Tricks for QuickBooks Online (QBO)

QuickBooks Online Pro Advisor NewmarketIn the past month I’ve spent numerous hours training new and transitioning clients in QuickBooks desktop and QBO. While some are new to either version, I’ve found those transitioning from the desktop version to the online version experiencing a bit of a culture shock. To ease the transitioning hiccups, here are 5 tips and tricks for QBO to make the entering and retrieving of information go a little smoother.

1. In order for you to allocate the GST/HST in QBO you must first set-up Sales Tax. You do this by selecting the Sales Tax tab from the menu bar and follow the on screen guidelines. QBO then automatically adds two default accounts; GST/HST Payable and GST/HST Suspense. You cannot allocate a payment amount directly to the GST/HST Payable account. But, you can allocate it to the GST/HST Suspense account. If you can’t easily relate to the word Suspense you can rename it to something that will be more familiar to you i.e. Clearing.

2. Generating reports in QBO. There are not as many reports available in QBO as there are in the desktop version, but generating them is pretty straight forward. Balance Sheets and Profit and Loss statements are about the same, but other reports are significantly different. As an example; to inquire and generate the total amount you paid to a supplier is different. Go to:

  • Reports,
  • Expenses by Supplier Summary,
  • Select the Date Range and then
  • Customize. Remember, this shows the amount expensed without HST.

3. Customizing transaction reports in QBO is much different in appearance and handling. i.e. Reviewing Bank transactions in the General Ledger. Until you save your customization, the debits and credits all appear in one column. I prefer to see the debits and credits in their own column, then the running balance in the last column. To do this go to:

  • Customize Transaction Report,
  • Change Columns, and then
  • Click on the accounts you want to Add or Remove.

Once you’ve selected the account columns you want on your report you can then determine the order you want to see them but clicking on the account name and to the right, there are arrows that you use to move the accounts up or down to display in the order that meets your needs.

4. Downloading your financial reports. This is one of the first items you want to set-up once you’ve established your company in QBO. Besides insuring that all your transactions are recorded, if not necessarily matched, the Home Page will indicate the discrepancy. Your bank account could show 2 difference values; one would be the actual bank balance when you downloaded the transactions, and the other will indicate the QuickBooks balance.

The closer those numbers are to each other indicates that your bookkeeping is up to date. The same is indicated with Credit Card accounts and Lines of Credit. It also indicates how many entries have been downloaded that hasn’t been matched to QuickBooks entries. It’s a great dashboard for information at a glance.

5. Uncategorized Income and Uncategorized Expenses. These are the account names that are used when you have downloaded your financial transactions and QuickBooks doesn’t know who the funds were paid to or received from. These are the gross amounts. You can access them by either going to your downloaded information and add the correct information to each line or go to the Profit & Loss reports, and each account and total will appear. You can click on one of them then drill down (every time you see a magnifying glass you can access more information by double clicking) and allocate accordingly. These amounts are the gross amounts, so don’t forget to apply the GST/HST where applicable.

If you’re overwhelmed on where to start with QBO, or handling of the day to day transactions contact a ProAdvisor Online Accountant. We can walk you through the process remotely and answer all your questions.  As always we are here to help. You can connect with us via email or telephone, leave a comment right here on the site, or click the contact tab at the bottom of the screen if you are reading this post on the website.

Until next time,


Time to Move from QuickBooks Desktop to QuickBooks Online (QBO)?

QuickBooks Pro Online Advisor NewmarketI don’t know whether it’s customers getting into the fall routine, and their business mindset from disappointing summer weather, or the marketing Intuit is doing, but I’ve received a lot of inquiries from new and current customers about QuickBooks in the cloud. The question being; is it time to move from QuickBooks desktop to QuickBooks Online (QBO)? Continue reading

Reducing Canadian Payroll Taxes with a Tax Waiver

reducing taxesIt makes a world of difference to all business owners in surrounding themselves with intelligent and professional associates. Carolyn Bogseth is one of my associates that I certainly respect for her intelligence and genuine desire to help those she meets. Whether they are her clients or someone that would like a general investment question answered she will take the time to assist those who contact her. Below is an excerpt from her recent newsletter outlining how reducing payroll taxes can help you. Continue reading

2 Great Accounting Software Deals for Businesses

cost savingsI’ve been in the accounting, tax preparation and training business for a number of years. And over those years, I’ve developed some great relationships with customers and vendors. So it has to be big for me to get excited about sharing these 2 great accounting software deals for businesses.

Whether our businesses are operated by a single person or 20 employees, we all have challenges. For the purpose of this blog I’m referring to great software at a good price and handing over the responsibility of payroll to a 3rd party provider.

Continue reading

QuickBooks 2014 Payroll Update

quickbooks-basic-payrollI’ve received a number of emails lately regarding problems updating QuickBooks 2014 Payroll. Even though customers are registered for QuickBooks payroll, the automatic updates are not recognizing payroll which expires June 30, 2014. At our office some of the computers updated payroll automatically with an expiry of December 31, 2014 while others didn’t. We are all on the same Windows operating system.

When I contacted QuickBooks their only suggestion was to go to their website and manually download the update. No other explanation was supplied. Make sure your QuickBooks file is closed first! Here is the link for the manual update for various versions.

Continue reading

3 Rs of Child Care – Rules, Receipts and Regulations

Day Care York RegionHere at The Montana Group, we do the bookkeeping for 2 large Child Care facilities located in York Region. Whenever I get an opportunity to discuss challenges of the industry with the Executive Directors, I’m surprised and impressed by the regulations in place to help protect the children. During tax season I regularly inform clients of the rules pertaining to claiming child care expenses and the receipts that are required. The following is a summary of my discussions regarding the 3 Rs of Child Care:

1) Rules

a) If you are the only person supporting the child, you can claim child care expenses you incurred while the eligible child was living with you
b) If you are in a relationship (marriage or common-law), the person with the lower net income is to claim the child care expenses
c) Employment Insurance is not considered earned income
d) The person with the higher net income can only claim the child care expenses if:

  • The other person attended school and was enrolled in a part-time educational program
  • The other person was confined to a prison or similar institution for a period of at least two weeks

For more exceptions and detailed information, please click here.

2) Receipts that Qualify

a) For caregivers providing child care services – your receipt will need to have the full name of the caregiver, address and social insurance number plus dates of care-giving services and name of child
b) Day nursery schools and daycare centres
c) Educational institutions, for the part of the fees that relate to child care services
d) Day camps and day sports schools where the primary goal of the camp is to care for children
e) Boarding schools, overnight sports schools, or camps where lodging is involved

3) Regulations

Accredited child care is governed in Ontario by the Ministry of Education. This link can help you determine which facility might be the best fit for your child. It not only tells you when the facility was first licensed but also indicates the total capacity, age groups of children it accepts, when it was last inspected and level of compliance, plus much more.

Child care receipts are some of the most commonly requested documents the Canada Revenue Agency (CRA) wants to see after personal tax returns are processed. You’ll need to respond within 30 days from the date of the letter requesting the receipts. In most cases they can be faxed to the auditor. And, they have a significant impact on determining your taxable income. Like all documentation pertaining to your personal tax returns, make sure everything is kept in a secure, dry location for 7 years.

As always, I welcome your feedback. You can connect with me via telephone or email, leave a comment here on the site or click the contact tab at the bottom of the screen if you are reading this post on the website.

Until next time,