Business 101 with Sage: Four must-have tips for compliance when starting your business.
By Adam
August 09, 2012
Small Business & Entrepreneurship
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Even if you’re at the top of the food chain in your small business, there’s still one place you have to report to: the government. Just like everyone else, your small business needs to stay in compliance with government regulations, keeping you on the straight and narrow. Staying compliant with federal and provincial laws doesn’t have to be a difficult task, but it does need to be taken seriously.
Here are four tips to help you with tax compliance when you’re getting started:
4. Know your write-offs
Getting started with a business means start-up costs across the board, but deductions and write-offs are built in to help alleviate some of those costs. The tip here is to not only know what your deductions and write-offs are, but to also know what can’t be written off and what can only be partially written off.
3. Know your tax responsibilities
From coast to coast, our nation has a rich and diverse history of unique and distinct tax codes. HST here. GST/PST there. With that comes the complexity of knowing what you’re selling and what tax rate you need to charge. In some cases your product line may have certain items that feature a lower taxable rate, or that are tax-free to certain demographics (for example, children’s clothing in B.C.).
Knowing what you need to charge tax for and how much you need to charge is a key element of your tax strategy. Take the time to find out where your products fall to ensure you’re charging the right rate!
2. Find the tipping point for quick versus manual
The Quick Method for GST/HST sounds perfect: it’s a quick, fast way of paying your share of tax based on a formula. The Quick Method uses an averaging formula to determine your tax burden and refund, instead of processing your deductions line-by-line. It can save you a lot of time.
The problem is that it doesn’t take into account the numerous deductions available to businesses starting up. This tip is a general one, but an important one: take the time to evaluate your business to see if you’ll be missing out on important deductions by using the Quick Method. The first year is definitely a “manual” year for most businesses, but that may continue on in subsequent years depending on how fast your business ramps up, and how long you take to acquire equipment and so on. Remember Quick Method is quicker, but not necessarily better!
1. Use the right tool for the right job.
Managing your accounts with a spreadsheet is doable, but not optimal. Succeeding in business depends on knowing when to step up your game and leverage the right tools. Accounting software, like Sage Simply Accounting will help you stay on track, and keep you in the business of doing business. No matter the size of your organization, there’s a version of Sage Simply Accounting built for you. Using accounting software the right way is the quickest and easiest way to stay in compliance, with built-in tracking, alerts, and more.
With those four tips in mind, you’re more equipped to face tax compliance over the course of your first year. Good luck out there!
Here are four tips to help you with tax compliance when you’re getting started:
4. Know your write-offs
Getting started with a business means start-up costs across the board, but deductions and write-offs are built in to help alleviate some of those costs. The tip here is to not only know what your deductions and write-offs are, but to also know what can’t be written off and what can only be partially written off.
3. Know your tax responsibilities
From coast to coast, our nation has a rich and diverse history of unique and distinct tax codes. HST here. GST/PST there. With that comes the complexity of knowing what you’re selling and what tax rate you need to charge. In some cases your product line may have certain items that feature a lower taxable rate, or that are tax-free to certain demographics (for example, children’s clothing in B.C.).
Knowing what you need to charge tax for and how much you need to charge is a key element of your tax strategy. Take the time to find out where your products fall to ensure you’re charging the right rate!
2. Find the tipping point for quick versus manual
The Quick Method for GST/HST sounds perfect: it’s a quick, fast way of paying your share of tax based on a formula. The Quick Method uses an averaging formula to determine your tax burden and refund, instead of processing your deductions line-by-line. It can save you a lot of time.
The problem is that it doesn’t take into account the numerous deductions available to businesses starting up. This tip is a general one, but an important one: take the time to evaluate your business to see if you’ll be missing out on important deductions by using the Quick Method. The first year is definitely a “manual” year for most businesses, but that may continue on in subsequent years depending on how fast your business ramps up, and how long you take to acquire equipment and so on. Remember Quick Method is quicker, but not necessarily better!
1. Use the right tool for the right job.
Managing your accounts with a spreadsheet is doable, but not optimal. Succeeding in business depends on knowing when to step up your game and leverage the right tools. Accounting software, like Sage Simply Accounting will help you stay on track, and keep you in the business of doing business. No matter the size of your organization, there’s a version of Sage Simply Accounting built for you. Using accounting software the right way is the quickest and easiest way to stay in compliance, with built-in tracking, alerts, and more.
With those four tips in mind, you’re more equipped to face tax compliance over the course of your first year. Good luck out there!
Nancy Harris is vice president and general manager for the Sage Simply Accounting business.
Follow Nancy on Twitter or join Sage on Facebook.