Not all entrepreneurs understand the language of accounting well enough to keep their own books. In fact, many of them outsource this task to an accounting firm. This is indeed a fundamental obligation. Let’s see why.
The corporate black box
Bookkeeping consists of recording all entries and exits from the company’s accounts, including credit and debit. It includes the details of all the company’s operations, with customers as well as with suppliers, employees and tax authorities. In short, it lists all financial activities!
What is bookkeeping?
First, the accounting firm in charge observes the invoices for sales of goods and services to customers that have been compiled, then records the implications of these transactions for the company in the accounting items of the General Ledger.
When an item is sold, it is important to subtract its value from cost, and equally important to note the increase in value from the payment received. We must also point out the GST and the QST, which will have to be remitted to the governments.
The same applies to transactions between the company and its suppliers, which must be well documented. With an accounting firm that indicates the value of its bank account and specifies that of the federal and provincial taxes, the company will be able to make claims when filing its tax return.
In addition, the company must note the details of the wages it pays, including the amounts deducted for the QPP, the QPIP, the health services fund, federal employment insurance and taxes. This obviously includes the salary of the business owner.
Why should it be done?
The keeping of accounting books is above all a legal obligation. The law requires companies to report to the tax authorities in order to verify whether they are indeed paying the taxes and duties as they are required to.
Thanks to the keeping of accounting books, shareholders and entrepreneurs can also take the pulse of the company. For example, they can check whether it is achieving its objectives, whether its economic growth is progressing or regressing, or whether it is sufficiently profitable.
Keeping accounting books is an essential task in accounting. If you own a business and aren’t sure you have it under control or have the time, ask an accounting firm to take care of it for you!
Benefits of strata management
strata management companies provide effective communication channels between owners, tenants, and property managers, helping to resolve issues and conflicts in a timely and effective manner. Overall, effective strata management can help ensure the long-term success and profitability of a property complex, while improving the quality of life for its residents.
ACCOUNTING FIRM, THE GREAT ALLY FOR COMPANIES