What information do I need to get started?

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What information do I need to get started?

This list is a starting point, your specific situation may differ.

Business bank and credit card statements.
  • Many banks and credit companies provide this information online and can go back as far as seven years
  • Copies of cheques (often these are on your bank statements)
  • Listing of e-transfers sent and received
Documents that support your business transactions
  • Invoices that you have sent out to clients
  • Documentation for purchases you have made. Receipts, bills from vendors.
  • Loans that you have in the business name
  • Agreements that you have made that result in a financial obligation.
  • Lease, rental agreements etc.

Business Registration and incorporation documents.

Most recently filed Annual return (this is not your tax return)
Incorporation documents
Including:

  • List of shareholders and directors
  • business articles
  • Share structure and ownership
  • shareholder agreements.
Business registration and incorporation documents will be available from your lawyer.  If you self-incorporated you likely do not have all of these documents.
Previously filed tax and information returns
  • If incorporated your last filed Corporate tax return (T2)
  • If self-employed your last filed personal tax return with the T2125
  • Statement of Business activities.
  • Copies of GST/HST/PST returns filed
  • Copies of T4 Summary and T4s filed if you have payroll
  • Copies of any T5018 (contractor payments) filed
  • Copies of any T5 Summary and T5s filed for shareholder (if incorporated)
  • Copies of any correspondence received from the Canada Revenue Agency
  • Copies of any correspondence received from your province (if you are
  • subject to PST).

Note that some of this information may be available online at CRA or your Province.

It may take a while to collect all of this information, but the best place to start is to connect with a professional who can provide more guidance on what information is required for your situation and what to do if some information is missing.

Why your accounting tech stack is important

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Accounting tech stach

Whats a tech stack? Why is it important?

Pre Accounting Apps

These apps can take a digital image, like a PDF or JPG file and translate it into a format that can be automatically posted into your accounting software. Three very common Pre-Accounting Apps are Hubdoc, Dext, and AutoEntry. While they all work in a slightly different manner they all have a common purpose which is to reduce and in some cases eliminate data entry.

Cloud Accounting Software

Cloud accounting software has dramatically changed how accounting is being completed. While it isn’t yet to the point where it is 100% automatic there are some real game changing features that cloud accounting brings that you just can’t match with desktop software.
– Bank feeds that instantly pull transactions from your bank account
– Rules that allow many transactions to be coded automatically
– Connections with other supporting software (‘apps’)
– Close to real time access to your financial information and reporting

Payment Apps

Payment apps now exist that automatically collect payments from your customers AND post the payment back to the accounting software. In Canada a couple that are very popular include Rotessa and Plooto. Plooto is also able to pay your vendors directly and you can approve payment on your smart phone.

Cashflow Apps

A big question for many business owners is where did my money go? By pulling directly from the accounting software the business owner is now able to analyse and plan based on very current information. Some apps in this category include DryRun, Float

Reporting and Dashboard Apps

These apps are for the business owner who is looking to grow and monitor business operations. Some of these tools are very sophisticated and can provide a wide variety of information. Many apps also have features that can permit what-if scenarios so the results of business decisions can be simulated. Some examples are Fathom, PowerBI, Spotlight.

So what does that mean for the business owner still working on the desktop? These functions still happen in the business they just take longer to complete. In general, this is because the process is either manual (cheques) or the lack of connections between the software tools require data to be rekeyed to another tool (Excel).

While it may seem to be a huge undertaking to move to the cloud and implement these technologies in your company it all starts with moving your accounting online.

4 questions you should ask your accountant

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Ideally, you and your accountant are more than just “adviser” and “client”. With your combined skills, expertise, and shared mission to support a thriving business, you’re more like strategic partners. The key to achieving success in any partnership is, of course, strong communication. At your next meeting, be sure to ask your accountant these four important questions.

1. What's my best strategy for increasing revenue?

Every business owner strives to improve profit margins – but the best way to quickly and/or sustainably grow revenue will vary from business to business.
When reviewing your financials, ask your accountant to pinpoint and suggest smart strategies for driving greater revenue. For your unique company that might mean focusing on new leads, encouraging customers to buy more frequently, incorporating cross-selling or up-selling, and/or re-thinking your pricing strategy.

2. How would you assess our financial performance this quarter/year?

It’s part of your accountant’s job to stay current with your company’s financial statements and reports (i.e. your balance sheet, income statement, profit and loss statement, and cash flow reports).
Some small business owners – especially those who lack confidence in their financial literacy skills – may only want to know the basics, in simplest terms. Let your accountant know you’d like a more thorough analysis of your finances when you next meet, and help understanding what the numbers mean.
Ask for key ratios, like your gross profit percentage, and an assessment of the big picture, drawing comparisons with past performance as well as trends in your industry.
Also ask for any insights your accountant might have into the reasons for new or surprising developments, and what you can do to correct areas where your business is falling short – as well as what actions you can take to continue any positive trends.

3. How can you help me grow my business?

Your accountant should be prepared to offer professional advice to help your business expand and grow over time. Scaling a business can be tricky as it requires a company to do everything it must to keep their customers happy while adapting to change – such as new staff and new systems to accommodate a greater volume of customers. Financial systems may need to change as your business expands; likewise, your company’s financial management may need additional support as you transition to a larger company.
Ask your accountant how you can best work together to facilitate smooth, sustainable growth with minimal disruption to operations, and for tips on how to successfully scale based on past experience with other small business clients.

4. What are your most successful clients doing?

Chances are your accountant serves as a trusted advisor to a number of clients – and therefore, will be privy to the inner workings of companies who are struggling and others who are thriving.
Neglecting to ask your accountant about their clients’ success stories is a missed learning opportunity. Even if a business has little in common with yours – operating in a different industry, or as a seller or products versus services – there’s value in learning what yielded impressive results for another company.
Alternately, you might ask your accountant how their clients overcame challenges similar to yours to help you brainstorm possible solutions.

Final Thoughts

Your accountant is an incredibly valuable resource for your business – and not just at tax time. Be sure to check in every quarter so you have the up to date financial info you need, and your accountant’s professional advice when it comes to making key business decisions.