Generally, when I prepare year end financial statements for my clients, I perform either of these 3 tasks: 1) I prepare everything and write up the books at the time of preparation of the company’s year end financial statements 2) I do the monthly accounting throughout the year, and then do the year end financial statements before continuing with a new fiscal year 3) The client has internal or part-time bookkeepers who do the monthly accounting and then I just perform the year end from information supplied to me. One of these part-time bookkeepers on task 3) just couldn’t understand [More]
Background In Manitoba, if you are a licensed establishment and can sell Beer, Liquor and Wine .. you need to account for the purchases in the accounting records. It can be difficult, because most of the time (I believe), the Manitoba Liquor Control Commission (MLCC) holds on to preauthorized blank cheques .. the hotel or establishment just places an order, and a cheque is issued, or automatically debited out of the company’s bank account. There are usually invoices emailed to the business and just packing slips included with the shipments. In Manitoba, Vendors selling Beer have a special price. The [More]
Depreciation We depreciate the value of Fixed Assets over the life of the asset in the financial statements, and generally the method of calculating this amount is specifically stated in the Notes to the Financial Statements as a company policy. It really doesn’t matter what method a company uses to record and calculate depreciation, but the company should continue to use that same method year after year. Generally, there are four different ways to calculate depreciation: 1) Straight Line Method You take the value of the asset less what you think the value will be worth at the end of [More]
When You Are NOT on the T.I.P.P. Just like I wrote in my previous post, Prepaid Property Taxes: T.I.P.P. and Journal Entries .. the reason one might adjustment the business and property tax accounts on a monthly basis, or at the year-end .. is to make sure that the expense is correct for the fiscal period. I provided an example what to do when you are on a T.I.P. Plan that might be over 10 months .. But, what if you aren’t on the tax instalment payment plan? Should you be adjusting your expense accounts anyway? Or Leave it alone [More]
T.I.P.P. = Tax Instalment Payment Plan Generally here in our province, your property taxes are probably either due June 30th or October 31st .. depending if you live in the city or in the rural country. The city or municipality often offers you the option to pay your property taxes on a monthly basis, usually by automatic withdrawal from your bank account on the first of each month. The property taxes (and business taxes) run for the calendar year .. and generally are precalculated as a fixed amount until the new taxes for the current year become in effect. Then, [More]
When I am preparing monthly financial statements, I often ask myself and my client the following question .. How Accurate Do You Really Need Your Monthly Financial Statements To Be?
Suppose you have an accounting blog .. like .. HART (1-800-HART) … and you want to show off your accounting knowledge …. READER: Dear HART … I just purchased a new car that was financed over 3 years, for $25,000.00 .. I put down $3,000.00 which included the first month’s loan payment of $500.00. What’s my journal entry? HART (1-800-HART): Congratulations on your new purchase .. I hope you have many years enjoyment with your new car. Here’s how to “book” the journal entry into your accounting records. JOURNAL ENTRY DEBIT CREDIT (1) DR. AUTOMOBILES $25,000     CR. CAR [More]
This is Part (II) of two parts, because the original post seemed to be getting long. In Part (I), I had tried to identify some of the common difficulties that can arise and problems that can stir up during the bank reconciliation process. In this part, I will discuss ways in which I overcome each of those situations and provide you with some tips to help make reconciling your banks and cash accounts easier. Reconciling – Computer Cheques Firstly, I ask them to sort the cheques in numerical order when they get the cancelled cheques with their bank statement. Lately, [More]
Businesses with sales over $30,000 CDN must register for a business number and charge 7% GST on their services or products, (6% beginning July 1, 2006). Just like the provincial retail sales tax (PST), to be compliant with the government, you must report and remit these collections over to the goverment. About this extra 7% money – it is “trust funds” – this money is not your extra profit. It’s money you collected as an agent or on behalf of the government and believe me .. they want it. The good news, is that everybody else is also charging you [More]
Everything should be back to semi-normal blogging schedules for me, by Friday June 2, 2006 .. Food for thought Are you leasing any computers? Vehicles? Other Equipment?
I try not to recommend accounting software to clients, as most of my clients either have their own software already purchased (or obtained) .. or I will be entering the raw data myself. The reasons are: * If they have the software, there’s no real reason to spend more money on new software – especially if the bookkeeper is familiar with the software – generally, they all do the same thing * If I will be entering the raw data myself .. what difference is it to my clients what I use? Right .. there is no difference If there [More]
There are two main reasons why businesses today should care about the proper coding of cheque stubs, before giving them to the accountant or bookkeeper for input and preparation of the monthly financial statements … * (1) Because your accountant or bookkeeper was not present when you issued the cheque, it makes sense to put as much detail on the cheque as possible to describe why you issued the cheque .. instead of letting them guess what it is for * (2) Accountants and bookkeepers charge you by the hour … if you can reduce the time they spend inputting [More]
The Link Leak Project I have decided to participate in this linking project over at the PetLvr blog … for Pet Related blogs .. so I thought I would do the same for accounting and bookkeeping and income tax blogs that are in my RSS Feed reader .. Bloglines. Here are some accounting and bookkeeping and income tax related blogs * NOTE: Accounting and Bookkeeping and Income Tax blogs are not as popular as you might think there are – and are far and few inbetween. As an accountant, bookkeeper, and income tax preparer .. I think that the general [More]
I was standing over the shoulder watching somebody add up some sport statistics … and I said … “Don’t forget to Cross-Foot it!” He looked at me like I was nuts .. It was then that I remembered that not everybody is familiar with HART’s Tickmark Terminology (okay .. did you look? That phrase is not part of wikipedia.org ~ YET ~ but one day! Some day! lol) To familiarize yourself with HART’s Tickmark Terminology, I have replicated my favorite tickmarks and scanned them and provided a little example how I would use that tickmark. Now, I will elaborate further [More]
In my travels, I have worked with many individuals, such as students and associates in public practice, clients and ex-clients over the years, and well .. even in general – ones who can pass a test, get an A+ on exams, have respectable degrees, high paying jobs, a lot of respect in the community .. yet – they can’t reconcile the bank. I’ve discussed earlier about the concept of reconciliation .. which just goes to show that identifying the transactions is not the end-all process in reconciling your cheque book … This happens when you will find that generally, in [More]
Top Five Reasons Why A Business Might Want To Use A Petty Cash Fund 1) The owner does not have to be available 24 hours to write a cheque for every little expense all of the time 2) To have the ability to make change for your customer wanting to pay an invoice on account 3) To reimburse an employee replenishing office supplies they had purchased for the business 4) To systematically keep track of all cash purchases in one logical place 5) To give an employee greater responsibility in helping running the affairs of the business Top Five Reasons [More]
In the past year I have been engaged to do monthly accounting and bookkeeping for several clients. Although my rates are higher than a normal part-time bookkeeper that a company may hire, sometimes it makes sense to hire your accountant do also perform interim financial statements. Because I am familiar with the work and detail needed when comes time to perform the Year End Financial Statements and Income Tax Returns, it is “BETTER” and “EASIER” getting information while it is fresh in everybody’s head. Overall, professional fees for the year might be a little highe, but some clients can appreciate [More]
It’s 10:00 am Monday Morning, January 2, 2006 … TIP: For Individuals with Loan Balances who want to claim interest on their Personal Income Tax Return FACT: You need to know what your balances are first! Now’s a good time to access all of your online banking accounts, your credit card accounts, and any of your accounts that a balance .. and print the page .. This will be your December 31, 2005 balance. Why? Well, for one thing .. yes – you might be receiving monthly bank statements .. but chances are that you are not receiving your monthly [More]
I touched briefly how I designed my own personal chart of accounts in an earlier article .. but recently I have redesigned the chart of accounts for a new client that seems to be working great for me. So, I thought I would pass that along. My current accounting software has the capability to create a chart of account design that holds up to 16 numbers … It is based and broken into 4 sections where you have to create this upon creation of the new chart of accounts. Once created, you cannot modify its design. * Account Number * [More]
I charge my time out by the hour. That translates to every 6 minutes counting as 0.1 hr that I can bill out. If you also bill out your time on an hourly basis, instead of a fee-basis, you probably have some system in place to keep track of your time. It’s so easy to get caught up in other matters these days … especially with the Internet, blogging, family life, pets, good weather, and so on and so on. We expect payment for our services and it’s only fair that our clients pay us what we bill them on [More]
Some accounting packages and software are integrated with different modules, such as accounts payable and accounts receivable. In most cases, you should be able to record most of your cheque (accounts payable and bank cheque) transactions as well as your sales (accounts receivable and deposit) transactions. In any monthly accounting process, besides these screen oriented and often visual modules, you will have to make adjusting journal entries on occasion. When I prepare year end financial statements for my clients, I usually receive the information in two different ways: in a shoebox – where I get all of the information and [More]
What does RECONCILIATION mean? According to Wikipedia .. Reconciliation may be seen as part of a process of restoring a relationship gone awry, typically as the result of one party causing a rift. (among other things) According to Merriam-Webster Online dictionary .. Main Entry: rec·on·cil·i·a·tion Pronunciation: “re-k&n-“si-lE-‘A-sh&n Function: noun Etymology: Middle English, from Latin reconciliation-, reconciliatio, from reconciliare 1 : the action of reconciling : the state of being reconciled 2 : the Roman Catholic sacrament of penance – rec·on·cil·ia·to·ry /-‘sil-y&-“tOr-E, -‘si-lE-&-, -“tor-/ adjective According to the InvestorDictionary.com .. Performing adjustments to the balance in your checkbook so that it [More]
I would describe “BOOKKEEPING AND ACCOUNTING” function as the process of maintaining good records and everything that goes along with that, in determining your financial position of your business. I can help you with: Bank Reconciliations Monthly Financial Statements Monthly Bookkeeping Accounting in a computerized environment> Data Entry – Sales, Receivables, Collections Data Entry – Payables, Bill Payments Canadian Payroll – Calculations, Cheque Preparation Loan Amortizations – Preparing Training and Assistance Take care. HART 1-800-HART