How to Bootstrap yourBookkeepingby: Tim Miron, CA
INTRODUCTIONBrock University Grad – 2004CA - since 2005Married – 2006Twins born – 2010Start-up / tech companies = 1/2 of m...
INTRODUCTION
OBJECTIVETo share ways that you can accomplishbookkeeping for your business with little to nomoney invested.
Overviewo Bookkeepingo Bank accountso Record keepingo Info storageo Invoicingo Collectingo Business Structureo Other stuff
BOOKKEEPINGWhat is that anyway?
BOOKKEEPINGWhat is that anyway?• Bookkeeping is the tracking and recording ofall the transactions of a specific entity.• T...
BOOKKEEPINGWhat is that anyway?• Bookkeeping is the tracking and recording ofall the transactions of a specific entity.• T...
BOOKKEEPING - Methods• Shoebox (bad)• File folders• Excel Spreadsheet• Cloud Solutions
BOOKKEEPING – File Folders• Works for unincorporated individualsHOW:• Buy plastic file box and some hanging folders• Label...
BOOKKEEPING – Spreadsheet
BOOKKEEPING – Spreadsheet• Record each transaction.• Uses the double entry system(1 Debit / 1 Credit)• See beancounterblog...
BOOKKEEPING – Spreadsheet(should = bankstatement)ErrorCheckDate Description Cash Cash Balance HST Drawings Revenue OfficeM...
BOOKKEEPING – Cloud• Wave Accounting (Free)• FreshBooks (Free)• Kashoo• XeroLink to your bank statement, to remove thedata...
BOOKKEEPING – Wave• Link your accounts to Wave• Wave imports the transactions• All you have to do is classify them• Be sur...
BOOKKEEPING – Wave• Invoicing (customizable)• Receive payments (2.99% + $0.30)• Payroll• Receipts• Canadian Made• Paypal i...
BANK ACCOUNTSBookkeeping is hard enough when its simpleSo get a separate bank account!
BANK ACCOUNTS• Free – ING and PC• Paypal• RBC / CIBC - $6/month• BMO - $9.50/month• ScotiaBank - $12 / month• TD - $14.95/...
BANK ACCOUNTS – Credit CardsCorporate or not – use a personal credit card,but get a separate one.
RECORD KEEPING – Cloud Based• File Folders• Wave Receipts – New / Free• ShoeBoxed – 9.95 / month• Xero – add-ons - various
RECORD KEEPING – Cloud• Take a picture / upload your receipt• Wave links to the transaction• ShoeBoxed can save more than ...
INFO STORAGE• Dropbox• Google DriveGreat for sharing and collaborating• Mozy - $6 (US) / monthCanada has stricter privacy ...
INVOICING• FreshBooks• Wave AccountingCan send ElectronicallyTracks outstanding billsIntegrates with Accounting
COLLECTING PAYMENT• FreshBooks• Wave Accounting• PaypalUpdates accounting automaticallyNo need to wait for cheques
BUSINESS STRUCTUREUnincorporatedvsCorporation
SOLE-PROPRIETOR• Unincorporated• All income earned is taxed in year earned, inaddition to other income• Simplest business ...
CORPORATION• Assumptions:• Unincorporated Income of $120,000 living offof $100,000.Extra income $20,00046% Income Tax $9,2...
CORPORATIONIncome earned in a corporation.Owner paid $100,000 salaryCorporate income $20,000Additional Costs $2,000Net inc...
CORPORATIONTax savings on incorporation:This example assumes two things:1) All the income is earned at the top tax rates2)...
CORPORATIONA corporation is effective in tax planning if:•The income is taken at lower tax rates.•The income is not taken ...
CORPORATIONUnincorporated After Tax Cash    $10,800Invested for 20 yearsRate of return 5% (before taxes)Value $289,100Annu...
HST• Mandatory registration at $30,000 in any year• Net tax (good thing for business)• Early registration• Rate to charge
CREATE YOUR OWN REFUND• How to create your own tax refund!
CREATE YOUR OWN REFUND• Take a % of your income every month and put it in a savings account.• If you estimated properly, t...
CREATE YOUR OWN REFUND
Questions?
Tim Miron, CA905-333-5066tim@blrca.ca@TJMiron
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Bootstrap your bookkeeping may 2013

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Bootstrap your bookkeeping may 2013

  1. 1. How to Bootstrap yourBookkeepingby: Tim Miron, CA
  2. 2. INTRODUCTIONBrock University Grad – 2004CA - since 2005Married – 2006Twins born – 2010Start-up / tech companies = 1/2 of my clients
  3. 3. INTRODUCTION
  4. 4. OBJECTIVETo share ways that you can accomplishbookkeeping for your business with little to nomoney invested.
  5. 5. Overviewo Bookkeepingo Bank accountso Record keepingo Info storageo Invoicingo Collectingo Business Structureo Other stuff
  6. 6. BOOKKEEPINGWhat is that anyway?
  7. 7. BOOKKEEPINGWhat is that anyway?• Bookkeeping is the tracking and recording ofall the transactions of a specific entity.• This makes preparing your taxes easy!
  8. 8. BOOKKEEPINGWhat is that anyway?• Bookkeeping is the tracking and recording ofall the transactions of a specific entity.• This makes preparing your taxes easy!• Oh and I HATE doing it!
  9. 9. BOOKKEEPING - Methods• Shoebox (bad)• File folders• Excel Spreadsheet• Cloud Solutions
  10. 10. BOOKKEEPING – File Folders• Works for unincorporated individualsHOW:• Buy plastic file box and some hanging folders• Label each folder a common category• Just drop receipts in during the year• At the end of the year summarize each folder
  11. 11. BOOKKEEPING – Spreadsheet
  12. 12. BOOKKEEPING – Spreadsheet• Record each transaction.• Uses the double entry system(1 Debit / 1 Credit)• See beancounterblog.tumblr.com
  13. 13. BOOKKEEPING – Spreadsheet(should = bankstatement)ErrorCheckDate Description Cash Cash Balance HST Drawings Revenue OfficeMust bezero4/1/13 Sales - invoice # 113.00 113.00 (13.00) (100.00) -4/3/13 Dell - PC (56.50) 56.50 6.50 50.00 -4/9/13 Shareholder withdrawl (100.00) (43.50) 100.00 -4/18/13 Expenses paid by me (43.50) 13.00 (113.00) 100.00 -
  14. 14. BOOKKEEPING – Cloud• Wave Accounting (Free)• FreshBooks (Free)• Kashoo• XeroLink to your bank statement, to remove thedata entry for you.
  15. 15. BOOKKEEPING – Wave• Link your accounts to Wave• Wave imports the transactions• All you have to do is classify them• Be sure to watch the account balances, thereare some occasional hiccups.• www.waveapps.com
  16. 16. BOOKKEEPING – Wave• Invoicing (customizable)• Receive payments (2.99% + $0.30)• Payroll• Receipts• Canadian Made• Paypal integration• Collaboration features
  17. 17. BANK ACCOUNTSBookkeeping is hard enough when its simpleSo get a separate bank account!
  18. 18. BANK ACCOUNTS• Free – ING and PC• Paypal• RBC / CIBC - $6/month• BMO - $9.50/month• ScotiaBank - $12 / month• TD - $14.95/month• Credit Unions - Meridian $5 / month +
  19. 19. BANK ACCOUNTS – Credit CardsCorporate or not – use a personal credit card,but get a separate one.
  20. 20. RECORD KEEPING – Cloud Based• File Folders• Wave Receipts – New / Free• ShoeBoxed – 9.95 / month• Xero – add-ons - various
  21. 21. RECORD KEEPING – Cloud• Take a picture / upload your receipt• Wave links to the transaction• ShoeBoxed can save more than just receipts.CRA does not have to accept credit card / bankstatements as proof of payment.
  22. 22. INFO STORAGE• Dropbox• Google DriveGreat for sharing and collaborating• Mozy - $6 (US) / monthCanada has stricter privacy laws
  23. 23. INVOICING• FreshBooks• Wave AccountingCan send ElectronicallyTracks outstanding billsIntegrates with Accounting
  24. 24. COLLECTING PAYMENT• FreshBooks• Wave Accounting• PaypalUpdates accounting automaticallyNo need to wait for cheques
  25. 25. BUSINESS STRUCTUREUnincorporatedvsCorporation
  26. 26. SOLE-PROPRIETOR• Unincorporated• All income earned is taxed in year earned, inaddition to other income• Simplest business filing• Lowest Cost
  27. 27. CORPORATION• Assumptions:• Unincorporated Income of $120,000 living offof $100,000.Extra income $20,00046% Income Tax $9,200Net after tax cash $10,800
  28. 28. CORPORATIONIncome earned in a corporation.Owner paid $100,000 salaryCorporate income $20,000Additional Costs $2,000Net income $18,00015% Income Tax $2,800Net after tax cash $15,20034% Tax on Dividends $5,200After Tax Cash $10,000
  29. 29. CORPORATIONTax savings on incorporation:This example assumes two things:1) All the income is earned at the top tax rates2) The income is all taken out in the same yearUnincorporated after-tax cash $10,800Incorporated after-tax cash $10,000Tax savings $-800
  30. 30. CORPORATIONA corporation is effective in tax planning if:•The income is taken at lower tax rates.•The income is not taken out each year (moreearnings retained for investment)
  31. 31. CORPORATIONUnincorporated After Tax Cash    $10,800Invested for 20 yearsRate of return 5% (before taxes)Value $289,100Annual draw    $30,000Years to draw   9.5 IncorporatedAfter Tax Cash    $15,200 Invested for 20 yearsRate of return 5%(before corp taxes) Value $484,300 Annual draw $30,000Years to draw 16 
  32. 32. HST• Mandatory registration at $30,000 in any year• Net tax (good thing for business)• Early registration• Rate to charge
  33. 33. CREATE YOUR OWN REFUND• How to create your own tax refund!
  34. 34. CREATE YOUR OWN REFUND• Take a % of your income every month and put it in a savings account.• If you estimated properly, then you should have more than your tax bill in your savings account.• Spend the difference like it is your tax refund! 
  35. 35. CREATE YOUR OWN REFUND
  36. 36. Questions?
  37. 37. Tim Miron, CA905-333-5066tim@blrca.ca@TJMiron

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