It's not all Current

The assets on the Balance Sheet of a business are not always current. There are long-term assets which include investments that are owned or held by the company for a period longer than

Art copyright Trusha Desai Innovation Management Inc.

a year. These could be GICs (Guaranteed Investment Certificates), Stocks, Mutual Funds, ETFs (Exchange-Traded Funds) and Bonds.

When we evaluate the long-term assets, we need to bear in mind the risk tolerance of the business owners and related parties. If an interest rate of 0.75% or less on an annual basis seems to be negligible on the surface, it is certainly better than losing one's shirt while betting on a lost cause.

Property, plant and equipment are also examples of long-term assets, though some accountants may prefer to categorize them as fixed assets. It is essential that information of purchase, sale and serial numbers of fixed assets are securely maintained in the accounting software.

Goodwill, patents and copyrights that are intangible assets also fall under long-term assets. These come forcibly into play when succession planning is being done.

For discussion of your financial statements or for bookkeeping, GST, tax and management consulting issues, please contact me #TrushaDesai.com

#financialcoaching #smallbusiness #investments

How Does Money Work?

When we analyze the Balance Sheet of the operations of our business, there is a section titled "Current Assets". This includes mundane items such as Cash on Hand and Petty Cash. There is a current balance of our chequing and savings accounts.

When we have come to terms with the fact that the chequing account balance on the Balance Sheet does not match the online bank statement balance, we can focus on whether our business is profitable or otherwise. We need to remember that gross profit and cold hard cash are two different items and found on different financial statements.

Therefore, in order to understand how the profit that is garnered from our business ends up on the Balance Sheet, the simple equation is Cash In Flow - Cash Out Flow = Cash. Cash In Flow consists of sales, deposits, retainers, loans, lines of credit. The healthiest would be sales and upfront customer deposits. Cash Out Flow epitomizes payroll, cost of goods sold, purchases, rent, advertising, meals, vehicle and travel expenses. The more detailed your chart of accounts, the more expenses will appear on the Income Statement.

For a discussion of your financial statements, for coaching, training and ongoing boutique bookkeeping, please contact me. #TrushaDesai.com

#businessplanning #financialstatements

December is not Year-end

For corporations, December may not necessarily be year-end. If you would like to sync your fiscal year and calendar year, in order that your personal and corporate tax preparation is facilitated, Canada Revenue Agency permits you to do so: they are just a phone call away.

If you have signed up for GST remittance, due to the fact that your annual gross income is greater than $30,000.00, Canada Revenue Agency will advise you whether your remittances need to be monthly, quarterly or annual. It is advisable to always stay on top of your tax filings and remittances, in order to avoid penalty and interest.

Trusha Desai Innovation Management Inc. specializes in GST reporting and year-end reconciliation in a slew of accounting software. I have ported corporations from Xero and QuickBooks Desktop to QuickBooks Online. As a Certified QuickBooks ProAdvisor, I ensure that your accounts are reconciled between QuickBooks Online and your original software. Please contact me #TrushaDesai.com

#fiscalyear #smallbusiness