Freelancers and Small Agencies are highly specialized individuals who excel exponentially in their craft. Unfortunately running a business is more than being amazing at your craft, it includes business development, pitching yourself, and managing your books. Luckily, we can help take some of the stress of running your business off of you. Communo has partnered with Tantelo a technology-enabled bookkeeping service provider. They offer specialized online bookkeeping and accounting services to a broad range of freelancers, as well as small and medium sized businesses across Canada and the USA. Keep reading to identify how a technology-enabled bookkeeping service provider can help you.

Bookkeeping Basics

Software

There are many different accounting softwares available for freelancers to use. Some benefits of newer software are:

  • Cloud-based – software can be accessed from any device, including your phone!
  • Integration and automation with applications such as Hubdoc, Zoho, Expensify, Plooto, Stripe, Shopify, Live Bank feeds, and more to help reduce manual entries.
  • Mobile apps that allow you to scan your receipts, monitor your bank balances and profitability, and invoice clients on the fly.
  • Modular software, where you only pay for the functionality you use and can choose to pay more for addons like Payroll, Corporate tax, as needed
  • Easy accountant access where you can simply invite your accountant to your file, providing them with the access they need to prepare your year-end filings

With all of these features and a subscription-based model, newer accounting suites ensure your software is always up to date and you’re always equipped with the tools you need for success.

Organization and Task Management

Other applications outside of your accounting software can also be very helpful in ensuring you’re working efficiently and effectively.

Task-tracking and project management software such as Asana, Monday.com, or Trello help to:

  • Organize projects
  • Track key deadlines
  • Achieve your short- and long-term business goals

The best part about these apps is that they’re free to use with optional monthly subscriptions if you require more advanced functionality. Here at Tantelo, we use Asana to help organize and monitor deadlines for our clients.

Capturing expenses

By staying on top of your books, you can ensure that you have captured all business expenses to reduce your overall tax burden at year end and help save you hours of time. There are different apps and software used to track business expenses (ex. Expensify/Hubdoc). Some benefits of these apps are that they allow you to:

  • Retain support for business expenses through receipt organization. These digital receipts are accepted as support by the IRS/CRA tax authorities.
  • Organize expenses by type, amount, date, and more to help you find expenses any time you need.

Many business owners also pay for business expenses personally. Using apps to track these expenses can ensure you’re claiming all of your business expenses to help reduce your tax bill and also receive a repayment from your business for these expenses, tax free!

These are just some of the benefits of working with an online bookkeeper to help you navigate your record-keeping while you focus on growth for your business.

What to Pay Attention to for Your Taxes

There are many expenses that a freelancer is able to deduct when filing your corporate taxes. Home office expenses can be claimed to help reduce your tax payable.  Since many of us are working from home at the moment, this is a key deduction that should be used.  Specifically, some of the deductible expenses include:

  • Home office – You are able to claim a % of these expenses, which include insurance, property taxes and utilities. 
  • Capital Cost Allowance – CCA is similar to depreciation on fixed assets, except calculated differently for tax purposes. Examples of these types of assets are, computer equipment, furniture, vehicles etc.
  • Automobile – If you have purchased or are leasing a vehicle for business purposes, expenses such as repair and maintenance, gasoline, and insurance can be deducted.  If you were to use your personal car there are apps for tracking mileage, such as Stride or MileIQ, which would accurately calculate the business use expenses that can be claimed. Both of these apps are accepted by US and Canadian tax authorities.

For those who run their business in the USA, similar deductions are available as well.  We do provide advice as to what expenses can be claimed when filing your year-end taxes.

Sales tax registration requirements should be periodically checked as the requirements can sometimes change or thresholds can be met where registration is required.

In Canada, GST is administered at a federal level, however there are additional sales taxes that you may have to register for. In the US, the sales taxes are administered at a state and local level, with their own set tax rates and laws. You will need to register for the taxes depending on the following:

  • Location – This can be office and/or retail spaces.  However, if you are selling outside of your principal location you may be liable to taxes in that area as well. 
  • What you sell – There are different policies for various types of products and services. 
  • How to sell your product – Specifically in the US, certain marketing and selling practices affects the need to register. 
  • How much of it you sell – Each state and province would have a tax registration threshold of annual sales for either previous year or current, where you do not need to worry about sales tax.

You have the option to choose how often you want to report your sales taxes which would be monthly, quarterly, or annually. You would choose the type of reporting period based on how often your sales and expenses occur.  For example, if you are recording sales evenly throughout the year it would be best to file your return on a quarterly basis, whereas you would file on an annual basis if there are only large sales a couple times a year.  

Overall, it is important to keep in mind that if you have a tax owing balance and if the filing was late, then interest and penalties would be added to that amount.  This does tie into what was mentioned previously.  To avoid penalties and interest, bookkeeping needs to be kept up to date and routinely exercised. In addition, tracking all your expenses is essential as you have paid sales taxes on those purchases.

Benefits of an online bookkeeper

Reducing exposure to tax penalties and interest

It is important to stay up to date on your record-keeping.  This ensures that you would be filing your commodity taxes or payroll remittances on time. For example, being two months late on a $10,000 GST filing could cost $700 in penalties and interest! Being organized improves your chances of filing accurate returns on time.

Reducing year end accounting fees

By providing your year-end accountant with an organized, reconciled trial balance, they will be much more efficient with their year-end tax filings, and you can likely be able to reduce professional service fees as a result. Accountants can be fairly costly and the fees can accumulate if they have to reconcile and prepare statements.  

Focus on your strengths

Shifting focus away from recordkeeping and compliance allows business owners to focus on growing their business. As a business owner on the go, you have enough to worry about: generating sales, managing staff, controlling costs, and meeting deadlines. Let us remove that stress off your shoulders and deal with it, as we have the capacity and expertise to focus on it for you.

Let’s say you spend 90 minutes a week recording transactions into Quickbooks, reconciling the bank accounts, and tying in balance sheet to subledgers. If your charge out rate is $150/hr, that translates to $900 per month. Comparing that to our average bookkeeping monthly fixed plan of $300 per month, with Tantelo you would effectively save $600 per month or $7,200 per year.

We at Tantelo have the expertise and resources which would benefit your business. Our team of professionals have years of experience using various accounting and organizational softwares. In addition, we have in depth knowledge of accounting practices and the ability to provide solutions which would streamline and simplify record keeping all while allowing you to focus on your business.

Get your business back on track and focus on the growth of your business. Have a chat with a Tantelo representative to see how freelancer or small business bookkeeping  and accounting services can help you.  

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