My personal journey with math and accounting hasn’t always been a fun one, and frankly, it’s a business necessity that I don’t think I’ll ever really love.
While I appreciate and understand the importance of accounting and finance, I struggle with the finer details of math. I enjoy the detail of strategic planning for written and graphic content (which makes sense, given that I own Schmooz Media, a Social Media Marketing Agency) and I even enjoy analyzing statistics – but I don’t feel that way about the rules and guidelines of accounting.
However, knowing that I’m going to be able to pay my employees, myself and plan for the future of my business is incredibly important to me. With this in mind, I truly believe putting the effort to educate yourself on the in’s and out’s of small business accounting is a worthwhile short-term pain for long-term gain.
So from one business owner who strongly dislikes tax season to another, here are my tips!
Every time you use your business credit card or pay for something that you plan to expense, ask for a receipt. Immediately take a picture of the receipt and then send an email to yourself reminding you what the picture is of.
While the immediacy of what I’m suggesting may sound melodramatic, for people like me who always misplace receipts and don’t remember what they are from, I suggest snapping a pic right away.
Loving what I do and doing great work is of utmost importance to me, but ultimately, I cannot do what I love and help people without making money. Getting paid is vital. Invoicing is the centre of everything in business, starting from the very first client you work with. Be clear about the terms and pricing of your services. Here are some questions to ask yourself:
Is there going to be a charge for HST on top of your base price or will you have to work that into the price after the fact? Something that I never really thought about was charging HST on deposits. If you ask for a certain percentage upfront, be consistent about how you structure your invoices and make sure that matches your work terms!
Have you kept your invoices simple and straightforward? Sending the invoice and then making edits to it once you’ve been paid can become very complicated. Let invoices stay as they originally are so you (or your accountant) don’t look back and get confused. If you have to change something, ask your accountant or a trusted mentor or friend how they think you should handle it. You’ll learn and get better at handling this every time.
Understanding the ebbs and flow of your business is important – you need to keep your eyes on those numbers because they will affect every management decision you make.
Be honest about your strengths and weaknesses. If math and understanding Canadian tax regulations aren’t your strong suit, pay a professional accountant and get help sooner rather than later. It can cost more, in the long run, to pay the wrong amount during corporate taxes or to allocate your salary incorrectly in your personal tax time.
You’ll still have to do work along the way, as part of your daily business operations – like keeping track of your receipts, expenses, and managing your invoicing – but at least you can be confident that some of the tough stuff will be taken care of!
Recognize your strengths and weaknesses and be honest about them – you’ll be so glad when you’re at the other end of your personal and corporate taxes. And if you’re a fan of accounting, but not a fan of content writing, Schmooz Media is here for you.
For everyone else, good luck getting through your 2018 taxes!
Zoe Share is the Founder and Chief Executive Schmoozer at Schmooz Media, a social media marketing and communications agency. Learn more about Schmooz and their services on their website. Connect with Schmooz Media on Instagram or Facebook or reach Zoe directly at Zoe@schmooz.ca