tax accountant calgary Archives

July 1, 2025June 27, 2025

Estate Planning Strategies to Protect Your Business Legacy

A man creates a well-developed estate plan to protect his business legacy

Many business owners lack an estate plan, which can lead to disruptions to their business, increased tax burdens, and potential legal battles. A well-developed estate plan preserves wealth, eases your mind, reduces tax penalties, and ensures loved ones are cared for. The following are insights and tips for ensuring a smooth transition, generating clear estate planning documents, creating tax strategies for passing business assets, and the role of trusts and life insurance in protecting your heirs and business.

Tax Strategies To Reduce Tax Penalties

Smart business owners consider the following tax strategies to reduce their tax requirements.

Utilize the lifetime capital gains exemption: This substantial tax benefit is accessible to business owners. It allows individuals to claim capital gains exemptions on the sale of shares, reducing the tax burden during succession.
Execute an estate freeze: An estate freeze locks in the company’s current value, passes future growth to your successor(s), and allows you to maintain control. This strategy enables income splitting, defers capital gains on future growth, provides a tax-efficient method of accessing funds, and limits death taxes.
Gift shares: Gifting shares to relatives/family members is an effective way to transfer business ownership if the beneficiaries are in a lower tax bracket.
Utilize deferrals and rollovers: Company owners can defer taxes on capital gains, transferring assets to a corporation. This technique gives successors time to rearrange ownership structures.

The Role Of Trusts

Consider a trust to assist with the transfer or sale of your business.

Establish a family trust: Family trusts assist with tax management, asset protection (safeguarding assets from spousal claims/creditors), and estate planning, making it simple to distribute assets to inheritors while reducing tax liability.
Employee Ownership Trusts allow the transfer/sale of the business to trained and trusted employees.

The Role of Life Insurance

Corporate Life Insurance reduces the tax payable on death, delivers the funds to cover the taxes, and enables tax-free distribution of the proceeds.

Essential Estate Planning Documents

Protect your business and ensure a smooth transition of assets by generating the following documents.

A will: This document dictates asset division, names an executor (person who handles your estate), manages the financial/legal elements, and ensures fulfillment of your desires.
A power of attorney: This document designates a person to make decisions (healthcare/financial) should you be incapacitated.
A family holding company is an entity that assists and simplifies the transfer of assets/ownership to heirs while allowing you to maintain control.
A buy-sell agreement: This contract outlines how transfer or sale occurs in the event of incapacity, departure, or death.
A trust is an arrangement in which a trustee distributes/manages business/personal assets to heirs, providing tax advantages.

How Cook And Company Assists

Do you need help with estate and succession planning for your company? Would you benefit from assistance with corporate financial planning? Want support with business strategies? Contact Cook and Company. We provide businesses with tax, estate, succession, and strategy planning services.

March 1, 2025February 21, 2025

Strategies to Reduce Tax Liability for Small Business Owners

Once again, tax season is upon us. It’s time to organize documents, collect receipts, and file your business tax forms. The Canadian Revenue Agency offers small business owners many tax deductions. The following is practical advice for taking advantage of the deductions unique to small businesses.

Examples Of Tax Deductions For Small Businesses

Small businesses are eligible for many tax deductions, including:

Income splitting: A common tax strategy for small businesses is income splitting. This involves moving income from a higher-earning family member to a lower-earning member, reducing overall tax exposure by paying reasonable salary/wages to involved family members.
Dividend payments: Shareholders receive dividends. If you add your spouse/children as shareholders, you can split income by paying them dividends. Be sure to check out the TOSI rules.
Incorporation: A corporation is a separate legal entity with assets, a bank account, and a tax burden. Since corporate tax rates are usually lower than personal rates, incorporating a business helps save on taxes.
Capital cost allowance: When a small business purchases items (such as buildings, vehicles, computers, a franchise, or equipment), it depreciates them, providing tax benefits for several years.
Fees, dues, and licenses: A business can claim professional licenses, professional service fees, and professional association fees (membership in a commercial or trade association).
Start-up costs occur during the setup of business operations and qualify as small business expenses.
Bad debts are payments that a small business is unable to collect. The CRA allows small businesses to claim these debts, except those resulting from a mortgage or a conditional sales agreement.
Fuel costs: A business may deduct fuel costs (diesel, propane, gasoline), motor oil, and lubricants used for business purposes.
Bank charges and interest: A business can write off interest on money borrowed to buy property and for general business purposes, as well as bank charges incurred when processing payments.
Home expenses: If a small business operates from a home, it may claim a portion of the cost of home insurance, the interest on the mortgage, and heating/electricity.
Delivery, freight, and express: A business can claim delivery and mail service fees.
Repairs and maintenance: A business can deduct the cost of labour and materials for maintaining and repairing property used to earn income.
Administration and management fees: A small business can deduct fees to manage assets/investments.
Insurance: A small business can deduct business insurance policies ( such as business interruption insurance, general business liability, fire insurance, business property insurance, etc.). However, businesses cannot deduct life insurance premiums or insurance for motor vehicles.
Meals and entertainment: A business can claim up to 50% of the cost of food, beverages, gratuities, plane tickets, and hotel rooms when an employee or owner attends a convention, conference, or similar event. It can also claim 50% of the cost of tickets, entrance fees, cover charges, food, beverages, room rental for a hospitality suite, and gratuities when an employee or owner takes a client to a sporting or entertainment event.
Vehicle expenses: If a business acquires expenses through using a personal vehicle (for business purposes), it can claim these expenses by keeping an accurate log of use. If it owns a motor vehicle or fleet, it can claim fuel, insurance, maintenance, parking, and repairs.
Legal, accounting, and other professional fees: A small business can deduct professional advice and services (legal fees, accounting, etc.).
Prepaid expenses: A small business can claim expenses paid ahead of time (yearly rent, advertising costs, legal retainers, insurance, leased office equipment, salaries, etc.).
Office expenses: Deduct expenses such as paper clips, pens, pencils, stamps, and stationery.

Cook And Company Can Help

Tax deductions are constantly changing. If you’re in doubt about the deduction potential of a business expense, contact Cook and Company Accountants. No matter what size or type of business you have or where you operate, we ensure you receive the deductions you qualify for. Let us help you reduce your business’s tax burden.

February 1, 2025January 6, 2025

How to Optimize Your Accounting Processes for Growth

A man is calculating taxes to optimize the accounting process for the growth of the business.

The accounting department of a business is involved in forecasting, budgeting, and interpreting financial information, which are critical functions for a company’s growth. If your accounting department is falling short, it’s time to reassess and implement improvements. Do you wish to modernize your accounting technologies and strategies to streamline operations? Would you like to establish efficient workflows to scale your business? The following are strategies and accounting technologies to help you achieve your goals.

Cloud-Based Accounting System

While desktop accounting systems are loaded onto individual computers, cloud accounting is accessed through the Internet and runs on a cloud provider’s platform. High-grade encryptions ensure safety and security. Third-party accountants or staff can manage accounts receivable, accounts payable, the general ledger, and more. The following are the benefits of a cloud-based accounting system.

Creation of a unified system: A cloud-based system allows a company to create a streamlined and unified accounting and finance system. Tools and apps help transfer and reconcile data.
Always up-to-date: A cloud-based accounting system is automatically updated (latest security measures, features, accounting/tax regulations, etc.).
Automated: Cloud-based systems generally have automation technology that completes routine tasks (e.g., creating/sending invoices, tracking expenses, generating financial reports, sending bill payment reminders), allowing employees to spend time on more critical duties.
Easily scalable: A cloud-based accounting system’s features and capabilities grow as your business grows.
Offers data security: Cloud-based accounting has many layers of security, keeping records safe from external and internal threats. Only authorized employees can access the data.
Data backup: Automatic backups eliminate the risk of losing data due to natural disasters, fires, or power outages.

Automation Of Repetitive Tasks

Automating repetitive and menial tasks boosts efficiency, reduces errors, and lowers the need for human input/intervention, allowing workers to spend time on more critical tasks (budgeting, analysis, etc.). Duties that are easily automated include:

Importing statements directly
Generating profit and loss statements
Importing transaction data
Breaking down expenses and income
Calculating taxes
Calculating pension payments, overtime, statutory sick pay, etc.
Generating forecasts, cash flow statements, and balance sheets

Efficient Financial Workflows

A workflow is a series of tasks or steps completed in a pre-determined order to achieve an objective. Scaling a workflow requires focusing on automation, a strategic approach, technology, flexibility, and communication. To increase workflow efficiency and manage growth, a company needs to assess processes, implement scalable solutions, and foster a culture of constant improvement.

Effective, efficient accounting is central for all businesses, helping maximize financial health and prepare for growth. Corporate accounting is time-consuming and challenging. Let Cook & Company help make these tasks easier. We offer solutions tailored for your company. Contact us for assistance.

December 2, 2024November 20, 2024

Reflect and Plan: Setting Your Business Goals for the New Year

A business owner reflects and plans how to set business goals for the upcoming new year.

The new year is almost upon us, making this a great time to review the past year’s achievements and undertake strategic planning. It’s a time to set realistic financial goals and review the succession plan. Attention to these matters ensures your business’s future success. However, business strategizing and succession planning are complex undertakings and are best done with the guidance of professionals. Following is advice from the experts at Cook and Company Chartered Professional Accountants.

Business Review and Goal Setting

Goal setting involves creating a vision of your company’s future by identifying your aims and objectives and determining the timing and sequence of meeting these. The following is a step-by-step guide to reviewing your business’s achievements and setting realistic goals for the upcoming year:

Reflect upon this year’s performance. Look at the highlights and challenges. Consider your business’s strengths, weaknesses, threats you have mitigated, and opportunities taken. Let this reflection inspire your goal-setting for the new year.
Define your mission and vision: Consider what you wish to achieve. Set guiding principles that provide a foundation for strategic planning and goal setting.
Plan changes: List new projects and ideas. Consider what is needed to make them happen.
Prioritize your new projects and ideas. Decide which are a priority and which can wait.
Review revenue streams and set financial goals: Look at your current projects and the new projects you prioritized. Consider your possible income based on your products/services, audience, price point, and predicted sales.

Succession Planning

Succession planning is a procedure that identifies key positions within your business and develops plans to ensure your organization continues to have the leadership needed to fill these posts. It is about preparation and future-proofing your company. The following is a guide to succession planning:

Identify the leadership positions critical to your company’s success, those that require competent, capable people.
Determine the relevant skills, knowledge, competencies, and abilities needed for these roles.
Calculate the probable time till these positions are vacant (retirement, career changes, etc.)
Identify possible replacements in your company and analyze their skills and competencies. Look for gaps. Discuss your plans with these candidates.
Design initiatives to prepare chosen candidates for the change of leadership roles. Look for ways to enhance and develop their leadership skills. Provide training and experiences.
Evaluate and monitor your plan as it unfolds. Make changes/adjustments as needed.

Having trouble determining your business strategy? Need help with succession planning? Contact Cook and Company. Our professional chartered accountants are here to help!

November 1, 2024October 7, 2024

Optimizing Year-End Tax Benefits for Individuals

The owner of the company is optimizing year-end tax benefits for his employees.

Have you undertaken tax planning for your business or organization? Did you talk to a professional to maximize tax savings? Most company owners are on top of their tax situation but less often think of strategies for their individual tax claims. Planning is crucial for navigating investments, charitable contributions, and other deductions that optimize personal tax outcomes. The following are suggestions for optimizing year-end tax benefits for individuals.

Strategies For Investors

If you invest private funds, the following tips will assist you in optimizing your individual year-end tax benefits.

Trade before the investment deadline: If you are selling an investment (stock, ETF, mutual fund, etc.) at a loss (to offset capital gains), ensure you do so at least two business days before the end of the year.
Trigger accrued losses: If you have funds/securities that have lost value, sell them to trigger capital losses before the year-end, offsetting capital gains for the current year.
Minimize capital gains tax using unused capital losses to offset capital gains. Consider an ITF account for a family member with little/no income and structure asset sales to receive proceeds over more than one tax year.
Contribute to a TFSA (tax-free savings account), allowing tax-free growth and freedom of withdrawal times.
Contribute to an RDSP (registered disability savings plan) for yourself or a family member. You may qualify for a matching government contribution.

RRSP Strategies

Last year’s notice of reassessment/assessment shows your RRSP contribution limit.

Take advantage of unused RRSP contribution room, maximizing your RRSP to maximize benefits. Consider withdrawing monies from a TFSA or taking out a loan to make your contribution.
Contribute to your spouse’s RRSP: Minimize the effects of attribution rules on withdrawals by contributing to your spouse’s RRSP before year-end.
Make home buyers plan withdrawals after year-end: Delaying a withdrawal allows time before repayment with RRSP funds begins.
Make Home Buyer’s Plan required repayment (found on your notice of assessment) and designate it on your personal return, avoiding unnecessary income inclusion.

Family Strategies

Take advantage of the many family tax strategies available.

Set up a loan (prescribed rate) with your common-law partner/spouse.
Swap assets with a family member(s) or transfer assets to a minor child.
Apply for Canada Pension Plan pension sharing.
Purchase RESPs for your children.
Take advantage of the federal tuition non-refundable tax credit.
Explore the Canada Caregiver Credit.
Pay tax-deductible childcare expenses to adult children.
Review trust income, determining how much income to flow to beneficiaries.

Optimizing year-end tax benefits for individuals can be convoluted and confusing! Talk to a professional tax planner for advice and assistance. They’ll provide guidance and tax planning support.

Need help navigating investments, charitable contributions, and other deductions to optimize your individual tax outcomes? Contact Cook and Company Professional Accountants for tax planning and advisory.

August 1, 2024July 15, 2024

Leveraging Accounting Technology to Improve Your Business Operations

Professional implementation of modern accounting technology streamlines business proceedings, revolutionizing the handling of financial operations. Automating time-consuming and repetitive tasks frees companies to focus on growth and strategic decision-making while ensuring compliance with reporting standards and reducing errors. Advanced accounting technology enables faster performance, detailed analysis, and more sophisticated operations.

Advanced Accounting Technology

Recent innovative solutions have reshaped accounting practices, offering increased precision and efficiency, improving security, and enabling scalability.

Cloud-Based Solutions: Accounting firms utilize cloud-based solutions to create simpler, more efficient, and more secure accounting systems that can be accessed at any time with any device. These solutions automate monotonous tasks (recordkeeping, data entry, etc.), simplify data management, ensure fast payments, eliminate the need for costly software, allow real-time collaboration, and offer scalability.
Accounting Software is designed to assist with generating financial statements, budgeting, taxes, managing inventory, payroll, and financial transaction recording. This software provides greater control, enhances accuracy, and ensures security. It enables deeper insights, facilitating data-based decision-making.
Machine Learning enables the gathering, organizing, and analysis of numerous datasets, continuously improving as information is accumulated. It provides real-time predictions and detects fraudulent statements, supporting efficient audits.
Data Analytics: Accountants use analytics to provide meaningful insights, enabling data-driven decisions and effective business strategies. Data analytics are used for client advisory, risk assessment, forecasting, performance monitoring, and problem-solving.
Predictive Analytics forecasts outcomes and generates predictions based on past outcomes and historical data. These analytic procedures help companies develop accurate budgets, estimate sales, and determine potential for expansion.
Artificial Intelligence incorporates self-learning capacity, empowering accountants to analyze large datasets efficiently. It is used to automate repetitive duties (data entry, tax filing, etc.) saving time and freeing companies to concentrate on tasks requiring creativity and critical thinking.
Automation of accounting tasks eliminates human involvement in repetitive tasks, mitigates errors, automatically generates invoices, addresses vendor inquiries, and identifies discrepancies.
Cybersecurity, such as stealth log-ins and password management protection, prevents unwanted access to accounts and credentials and minimizes the risk of data breaches.

How Cook and Company Can Help

Effective, efficient accounting maximizes a business’s financial health but is a time-consuming, challenging undertaking. Cook and Company has over 20 years of experience of making the task easier by offering corporate accounting solutions tailored to each company’s needs. Our skilled implementation and accounting technology streamlines business operations and provides cybersecurity managed by professionals. We leverage technology for automated accounting processes. This saves money and time, improves compliance with regulations, and ensures accuracy. With integrity, honesty, and a personal touch, we use diverse, detailed, expertise to benefit our clients. We provide:

Bookkeeping: Recording revenues, charges, purchases, expenses, fees, and payments is a huge task. Cook and Company provides professional bookkeeping services for a variety of industries. Our proficient, bookkeepers help companies keep their finances up-to-date and in order.
Preparation of year-end statements: Fiscal year-end statements help a business evaluate its performance. We provide statements that include a balance sheet (helps determine qualification for credit and loans and informs investors), an income statement (shows profitability and assists analysis of investments), a cash-flow statement (provides information regarding cash generation and expenditures), and a statement of owner’s equity (shows the cumulative company earnings available for distribution).
Source deduction, remittance, and planning: Cook and Company ensure timely, accurate deductions and remittances (Employment Insurance premiums, Canada Pension Plan contributions, and income tax) and provide tax planning and advice.

Contact Cook and Company for the assistance of chartered professional accountants. Let accounting technology improve your business operations.

February 1, 2023February 10, 2023

Looking to Hand Down the Family Business? Read This.

Ready to retire and relax? Want to hand down your business to your family members? This requires planning. Small business succession planning is difficult as it’s complex. People are often resistant to change and there’s potential for conflict, but no one stays in the same position forever. Illness, retirement, death and/or turnover are inevitable. If a company fails to plan, knowledge may be lost and opportunities missed. Succession planning provides a business with a framework that ensures continuity when change occurs. It allows you to hand down the family business.

What is succession planning?

Succession planning is the process of identifying and developing future leaders/owners of your company. This strategy prepares your business for all contingencies by training high-quality people for advancement. It ensures that your business continues to run smoothly after key people retire, resign, move on to other opportunities or pass away. This process involves the coaching and development of designated successors.

Why develop a succession plan?

There are multiple benefits and reasons for succession planning for your business.

- Lower hiring costs
- Stronger internal hires
- Shorter vacancies for key positions
- Better career development
- Increased employee engagement
- Higher performance
- Increased talent retention
- Higher job satisfaction
- Disaster-proofs the business
- Identifies the most-qualified future leaders
- Creates a structure for training and development
- Maintains brand identity
- Creates opportunities for career advancement
- Helps a company plan for the long-term
- Eases financing of transitions
- Provides an emergency plan
- Reduces risk of loss
- Enables you to hand the company on to family members, in good working condition

How do you develop a succession plan?

There are three distinct phases of succession planning:

- First Phase – Identification: Establish who you are as a company and what you want. Then, consider all key roles in your organization determining the day-to-day import of each position and the impact that would occur if that position was suddenly vacant. Identify multiple candidates for each position (a short list) and teach them the values, guidelines and vision of the business.
- Phase Two – Selection: This is where a specific candidate is chosen for each role. The successor may be the person next in line in the organizational chart but may also be a promising employee from another position or a family member. Look for those who display the skills necessary to survive and thrive in the new post. Objectively consider your shortlist for performance, skills and emotional intelligence. Choose a candidate who is a lifelong learner and both self and socially aware.
- Phase Three – Training: This phase involves scheduled professional development for the chosen successor(s). This may include job rotation (for knowledge and experience), mentoring in soft skills (communication, interpersonal relations, empathy, diplomacy), position shadowing and/or taking over when the person presently in the role is on vacation.
- Phase Four – Transition: This involves the present position holder retiring/stepping down and the chosen successor formally taking the role.

Succession planning keeps a business moving forward, prepares a company for inevitable changes, assists in retaining strong performers, supports the continuity critical to a company’s future and allows you to hand down an optimally functioning company to family members. A succession plan is a good idea at the start-up, growth and maturity stages of a company. It’s worth the investment of time and effort.

Want to hand down your company to family members? Need help with succession planning for your business? Contact Cook and Company Accountants. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company use their experience and expertise to help you. We assist you in making your business a success. Contact us for a complimentary consultation.

January 1, 2023January 19, 2023

Creating a Year-End Financial Statement

Public companies, small businesses and non-profit organizations prepare a yearly report to provide information about past performance and to determine future goals. This year-end financial statement is an annual financial document that’s provided to shareholders, potential investors and analysts. It’s a good source of information about business performance and financial well-being.

What is a year-end financial statement?

Financial statements are records that communicate the activities and the financial performance of a business. They generally include a balance sheet, an income statement and a cash flow statement. They indicate:

How much money is made
How much money is spent
What the company owns
What the company owes
The net value of the business
Where the money came from and where it went
The amount of money kept in the company

Why does a business need a year-end financial statement?

Companies generally hire an accountant to prepare their financial statements and then use the reports as a management tool to affect positive change within their organization. There are several reasons why a business needs financial statements:

For performance measurement: Financial statements provide a gauge of performance that helps you review the success of your business and communicate your past, present, and future prospects to stakeholders. It allows you to assess management’s stewardship of the company, the viability of the business and is a starting point in forecasting future performance.

For loan applications/investors: Many lenders will not consider a loan application without up-to-date financial reports. The information in a financial statement forms the foundation of a bank’s decision on whether to fund a venture or a company. A business can use financial statements to persuade an investor to buy into the company, or to attract a venture partner who can put money into a new project.

For the CRA: In order to file corporate tax returns, Canadian corporations are required to produce financial statements. To avoid penalties, a company needs to have financial statements prepared on a yearly basis.

For regulating cash flow: Financial statements help a business anticipate borrowing needs. Reviewing your statements can reveal trends your business can use in its cash flow strategies.

For decision-making: Financial statements provide decision-makers within a company with the up-to-date information necessary to make effective choices. Financial reports are used to provide shareholders, partners and/or potential investors with key business metrics.

What is included in a year-end financial statement?

Financial statements are a set of documents showing a company’s current financial status. They communicate what your business owns, what it owes at a fixed point in time and they provide details about your assets, liabilities and equity. There are three reports that all businesses require for tax, financing and investing purposes and therefore are included in a year-end statement.

- Balance sheet: The balance sheet is a snapshot of a company’s performance at a given time. It identifies the company’s assets (inventory, equipment, vehicles, furniture, property, cash), liabilities (short-term debts, long-term loans, accounts payable) and equity (what would be left if assets were sold and debts paid). The balance sheet is an indication of the health of a business and helps business owners make decisions regarding how much inventory to order, if assets should be sold and whether a cash infusion is called for. Lenders use a company’s balance sheet to evaluate collateral and risk.
- Income statement: The income statement, also known as a profit and loss statement, summarizes a company’s revenue and expenses for a given period of time. This report shows a company’s bottom line. The income statement consists of four sections; revenues (net sales), cost of goods sold (inventory, freight, labour, indirect expenses), expenses (wages, advertising, depreciation, payroll taxes, office expenses, utilities) and other income (assets sold, interests on loans/investments). The income statement is the document you show to potential lenders/investors and is necessary during tax season. It indicates the profitability of a business’s current operations and guides management in how to expand or cut operations for greater profits.
- Cash flow statement: The cash flow statement reports the cash and cash equivalents that flow into and out of a company in a given time period. It measures how much cash a company has on hand. Your income statement shows your company’s bottom line while the cash flow statement shows how your business earns cash and where it goes. The information in this report is used to project how much revenue can be expected in the future, estimate upcoming expenses and make judgments regarding revenue gaps that may result in non-payment of business liabilities and debts. There are three activities documented in a cash flow statement; operations (accounts receivable, accounts payable, wages, merchandise expenses), investments (equipment and merchandise purchased, purchase of an asset, loans made to vendors, payments related to a merger or acquisition) and financing (bank loans, shareholder monies, personal investments, dividend payments, loan repayments, sale of company stocks). This report informs management of how much cash is available to pay expenses and invest in the business. Large discrepancies between the cash flow statement and the income statement help identify problems in a business’s operations.

Financial statements are a key tool for operating a business. They’re a snapshot of a company’s finances, provide critical information about a business’ performance and are the foundation for planning a company’s future course. These statements are used by bankers, investors and others to assess the health and liquidity of a business. A year-end financial statement shows the sustainability of a business and allows directors to make educated financial decisions to ensure success. Ask your Chartered professional accountant for help creating year-end financial statements for your business. They have the knowledge, experience and skill to help your company make wise financial decisions.

Need help with your company’s financial statements? Looking for an accountant for your company? Contact Cook and Company Accountants. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company use their experience and expertise to help your business. We assist you in making your business a success. Contact us for a complimentary consultation.

December 1, 2022December 8, 2022

What to Look for in an Accountant

You’ve decided it’s time to hire an accountant for your business. There are so many accounting firms to choose from! Which should you select? It’s in your company’s best interests to have an experienced, capable person(s) handling your finances. A good accountant provides tax advice, helps you strategize, is affordable, has strong entrepreneurial skills, communicates well, adjusts to your risk tolerance and saves you time and money. An excellent accountant is priceless! Choosing the right accountant can be a daunting task. This is a decision that requires time, careful research and thought. The following are some tips to help you choose the best accounting firm for your company.

Consider their location: Are you partial to face-to-face meetings? If so, choosing an accountant located nearby is important. Are you willing to collaborate online? If the answer is yes, your company can use cloud-based technology, email, video-conferencing and/or secure accounting software to review data with your accountant. This allows you to choose an accountant located anywhere in the world.

Pay attention to qualifications: When deciding which accounting company is right for your business, look closely at their designation. It’s wise to employ a Chartered Professional Accountant (CPA). These financial professionals work in various accounting environments (government, private companies, private practice) and offer services including tax planning, financial document preparation and business valuations. CPAs are highly trained. To become a CPA in Canada you must obtain an undergraduate degree, enroll in the CPA professional education program, complete 30 months of relevant accounting experience, finish four education modules and pass the three-day Uniform Evaluation exam. When deciding which accounting firm to employ, don’t be shy about asking for evidence of qualifications. Ask to see their CPA member number. Search the CPA Canada database for their name. Inquire regarding what training courses they have recently attended.

Consider experience: It’s important to have experienced people preparing your business’ tax returns and financial documents. Check to see if the accounting firm(s) you are considering has worked with companies in your sector. Ask what size of businesses they work with. Find out if their clients have grown and developed under the firm’s guidance.

Note their knowledge base: Ask questions regarding the services offered and pay attention to how the accountant(s) answer. A reputable accounting business has a deep base of knowledge to draw upon when supporting your business. A good firm will manage your finances, improve cash flow management, enhance business growth and work within your budget.

Notice how they answer questions: Can you understand the accountant? Do they overuse jargon and/or technical terms, making it difficult to comprehend their communication? Can they explain the tax laws in a way that you can grasp? Are they approachable? Choose accountants who are willing to ensure that you understand them.

Look closely at their team: Take note of the office staff. How do they interact with you? When working with an accounting firm, you often deal with more than the CPA. Choose a firm with cordial, kind, knowledgeable and helpful staff.

Get referrals: Take advantage of your network of business associates and advisors when choosing an accountant. Find out what firm other similar business owners recommend. Use your LinkedIn profile to search for accountants who are highly recommended. Consult with friends and family members regarding what accountant they use and why.

Do background checks: Talk to some of the clients of the firm you’re considering working with. This provides first-hand information about the accountant, their style, their effectiveness and the type of relationships they develop with clients.

Think about software: Accountants often have preferred accounting software. If your company uses a different type of software there can be difficulty in sharing information. Look for an accountant willing to use the same software as your business. Another option is to choose collaborative, cloud-based accounting software with encryption built in.

Interview several firms: Interview prospective accountants, comparing information regarding several accounting firms before making a selection. The similarities and contrasts between accountants help clarify the type of accountant that you need and want.

Always negotiate fees: Some accountants charge by the hour, others charge a monthly retainer while others charge a percentage of your turnover. Get written quotations from all accountants being considered. Negotiate the fee structure to acquire the style that works for your company.

Picking the right accountant for your business can be a challenge. A good accounting firm keeps track of your business’ income/assets/liabilities, examines financial records, assists with tax filing/bookkeeping/payroll, offers tax advice, prepares financial statements and helps with business decisions. An accountant is closely involved with the operation of your company making the decision of which firm to work with a serious endeavour. Choose wisely.

Looking for an accountant for your company? Contact Cook and Company Accountants. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company use their experience and expertise to make tax time a breeze. We assist you in making your business a success. Contact us for a complimentary consultation.

October 15, 2022September 28, 2022

Can Your Business Plan for Inflation?

Historically, inflation has plunged countries into long periods of instability and politicians have won elections on promises to combat it. Inflation is currently at a high not felt for decades. Canada’s annual inflation rate rose to 8.1% in June of 2022, the highest since January 1983. Businesses are paying more to find and retain talent. Supply costs are escalating. Companies are feeling squeezed as the costs of goods and services continue to rise. Inflation is expected to remain elevated until 2024. It’s necessary for businesses to take decisive action to strengthen their growth plans and deal with the pressures of an inflationary period. The following are strategies to plan for and deal with the impact of inflation on your business.

What is inflation?

Inflation is the rate of increase in prices over a given period of time. It represents how much more expensive a relevant set of goods and/or services has become. It can be translated as the decline of purchasing power over time and is expressed as a percentage. Essentially, inflation means that a unit of currency effectively buys less than it did in prior periods. When inflation rises, consumer spending declines as people can’t afford to buy as much as previously.

How does inflation affect a business?

Inflation means that a company’s cash reserves are worth less. Labour expenses rise. Consumers buy less of a business’s goods and/or services. The value of some assets (real estate, steel, lumber) increases. Supply chain issues often occur, affecting scheduling, pricing and estimation. The shifting nature of the economy during an inflationary period is unnerving for many business owners. The answer? Be prepared!

How can a business plan for and address inflation?

Normal economic cycles include four stages: expansion, peak, contraction, and trough. As a business owner, it’s wise to have contingency plans for navigating each stage. A company’s plan for a period of inflation should include metrics to measure success and actionable steps to take. The following are tips for dealing with inflationary pressure as a business.

Be aware of real income: Track net income against the rate of inflation (real income). As the rate of inflation increases, profit decreases, reducing value and equity.
Adjust the length of contracts: Lock in pricing for materials and/or expenses with a long-term contract. This protects your budget and guarantees revenue for your supplier.
Time your purchases: Make large purchases before the price rises, particularly for equipment, land or other assets. This allows you to borrow cash when it is worth more and pay off your debt with money that is worth less.
Optimize pricing: Create value for your product/service through marketing and an improved customer experience. This will allow you to raise your prices with less difficulty. Tie your price increase to the PPI (producer price index) or the CPI (consumer price index). Consider targeting less price-sensitive customers.
Understand your cash flow: Cash flow and working capital are essential parts of a plan to deal with inflation. Do a financial modelling exercise to map out your situation. Look at ways to improve cash flow:
- extending payments to vendors
- tightening up invoicing and collection policies
- divesting underperforming divisions or assets
- prioritizing your resources in areas that are performing well
Reduce your tax burden: Talk to your accountant about ways to reduce your tax burden. Take advantage of losses.
Review your debt and capital needs: Assess your ability to meet current debt obligations. Reach out to lenders if you’re considering expansion, the purchase of new technology and/or refinancing existing debt.
Consider your strategies for growth: What worked in the past may not work now. Reevaluate and refresh your strategies.
Assess your technology: Do you have access to real-time data regarding your business? If not, it may be time to upgrade your technology. Consider a cloud accounting system, an enterprise resource planning system (ERP), a warehouse management system (MHS) and/or a customer relationship management system (CRM). The information provided can guide your decision-making.
Simplify operations: Look for ways to streamline complicated processes, run leaner, reduce cost and increase profitability.
Prioritize high-profit margin products: Many companies give priority based on the date of the order regardless of profit margin. Tell customers purchasing low-profit items/services that delivery will be slow. Ship goods/deliver services that are most profitable first.
Differentiate between strategic and nonstrategic cost cutting: Selectively trim costs to improve the return on operating expenses. Boost growth through greater investment in the strategic capabilities needed to achieve differential results. Deploy scarce resources to reinvigorate strategy and maximize shareholder value.
Eliminate work: Scrutinize what activities are performed and how those activities are performed. Eliminate unnecessary work and automate when possible.
Keep morale high and prevent attrition: Losing key employees results in lost productivity and requires time and effort to find and train a replacement. To avoid this, openly communicate with employees. Be aware and accommodating of personal needs.

Inflationary pressures and supply chain issues are real and complicated. It’s important to develop a plan that addresses the rapidly evolving situation. Utilize the wisdom and leadership available to your business by talking to your accountant. They have the knowledge and experience to help you weather current circumstances.

Does your business need help weathering current inflationary conditions? Contact Cook and Company Chartered Professional Accountants. We can provide you with powerful financial planning solutions. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company use their experience and expertise to help your business. Contact us for a complimentary consultation.

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