It is the 20th of the month. Your accountant is still working on last month’s financial statements. The bank accounts are not fully reconciled. Several supplier invoices are missing. Customer payments have not been matched. The inventory number still needs adjustment. There are transactions sitting in suspense. Management is waiting for the profit and loss […]
You open your balance sheet and see: Suspense Account: $47,850 You ask your bookkeeper what the balance represents. The answer is: “Those are transactions we were not sure how to categorize.” That may be understandable for a few recent transactions. It becomes a problem when the account has been growing for six months. A suspense […]
Your accounting software says you have: $185,000 of inventory Your warehouse count says: $143,000 That is a difference of: $42,000 Where did it go? Was inventory sold but never removed from the system? Were purchases entered twice? Did products get damaged, stolen or written off? Are supplier costs wrong? Did someone receive inventory into the […]
You open your business banking app and see: Bank balance: $84,250 Then you open your accounting software. It says: Bank balance: $97,680 That is a difference of: $13,430 Which number is correct? Can you spend the $97,680? Did the business forget to record expenses? Did a customer payment get duplicated? Did someone delete a transaction? […]
Your business needs a new vehicle. The dealer offers two choices. Buy it for $65,000. Or: Lease it for $1,050 per month. The salesperson tells you leasing gives you a better tax write-off. A friend says buying is smarter because you own an asset. Your bookkeeper says the corporation can deduct the vehicle anyway. All […]
You are preparing your corporate tax return when your accountant asks for the receipt for a $4,800 business purchase. You know the expense was real. You can see the payment on the company credit card. The equipment is sitting in your office. But the receipt is gone. Then you find another missing receipt. And another. […]
Your business has become valuable. Maybe you started as a sole proprietor and now want to incorporate. Maybe your operating company has grown and you want to put a holding company above it. Maybe you are preparing for succession, an estate freeze, a future sale, or a corporate reorganization. Then your accountant raises an uncomfortable […]
You hire someone to help your growing business. Instead of putting them on payroll, you agree that they will invoice the company each month as an independent contractor. There is no vacation pay. No payroll deductions are taken. You do not remit CPP or EI. The worker sends an invoice, you pay it, and everyone […]
You completed the work. You sent the invoice. The customer promised to pay within 30 days. Thirty days became 60. Then 90. Then six months. Your staff called. You sent emails. Statements went out. The customer stopped responding. Your accounting system still shows a $25,000 receivable, but the money may never arrive. Now the business […]
Your corporation had another profitable year. The operating account now holds $800,000. You do not need all of that money to pay employees, suppliers or upcoming business expenses, so you start investing the surplus. Some goes into GICs. Some goes into stocks and ETFs. Maybe the corporation purchases an investment property. At first, this can […]