Role of CFO in the Construction Industry

The construction industry is one of the most dynamic and fast-paced sectors in the world. With multiple large and small-scale businesses competing for limited resources entwined with a constantly changing work environment, construction companies often face numerous financial challenges. Some of these problems include misallocating costs, insufficient cash reserves, dealing with tax issues, and late payments. Therefore, to avoid such issues, land developers and contractors are now putting sophisticated financial management at the forefront of their business model. From ensuring quality materials and payment collection to verifying vendors, not to mention all the safety management and project planning that goes behind the scenes––running a construction business is a lot of work.  Due to these multifaceted tasks, construction companies are left with no time to keep an eye on their finances. Therefore, they are always on the lookout for an experienced financial professional like a Chief Financial Officer (CFO) to manage and oversee all the financial aspects of their business. A CFO in the construction industry acts as a custodian of a company’s revenue and expenses and prepares financial projections in support of the organization’s overall business plan. Furthermore, they interpret complex financial statements and ensure compliance with all applicable laws and regulations.  In this article, we have highlighted what a Chief Financial Officer does and why they should be involved with the day–to–day operations of a construction company.  Risk Management  Oftentimes, construction firms face a variety of risks, like safety, supplier performance issues, client default or bankruptcy, financiers, contract constraints, and interest rate volatility. However, a CFO establishes and maintains an adequate risk management process to identify, evaluate and manage these critical risks. Moreover, they assist in

• Reducing the impact of risks that are inevitable and nontransferable 
• Ensuring a complete execution of risk plans 
• Keeping a rigorous check if the corrective actions are taken as per the requirement or not 
• Identifying areas of improvement  
• Verifying appropriate controls 

Compliance Management  One of the most important aspects of managing fluid construction projects is having effective compliance management procedures in place. Between credit and background checks, building codes and meeting safety requirements, construction companies must comply with all regulations to minimize health and safety accidents and avoid penalties and delays.   An experienced CFO helps in meeting all regulatory and legal requirements including those related to environmental protection, health, and safety. They identify opportunities for compliance improvement across all facets of the business including internal controls, policies and procedures, and disclosures. Financial Control  Due to the inherent risks, the construction industry requires effective financial management even more desperately than other industries. Research studies have indicated that inadequate financial management is a major contributing factor to many construction company failures. Therefore, it is necessary to have good financial control systems to manage the company’s finances effectively and efficiently. This will help in avoiding any unnecessary expenses, such as operating costs, and ensure that the project is carried out as per budget and schedule.  A professional CFO, such as CJCPA, reviews all expenditure processes and keeps track of progress and cost overruns daily.   Furthermore, a CFO also helps in:

• Setting up a system to find out exactly how much money has been spent on project construction, marketing, and design
• Ensuring that all accounts are accurate and up-to-date
• Overseeing all the financial matters including budgeting, taxation, and accounting 
• Identifying any potential problems with the company's financial statements

Financial Reporting  Financial statements not only show a corporation’s current financial performance, but they also offer valuable indicators of future trends. Thus, maintaining current, accurate financial reports help contractors identify potential red flags, accurately forecast budget, and maintain long-term financial health. Many organizations don’t have associates with the resources, time, and experience to generate and analyze financial results. This is where a professional and certified CFO can help.  Chief Financial Officer assists in the preparation of monthly, quarterly, and annual financial statements which consist 

• Income Statements 
• Cash Flow Forecasts 
• Balance Sheet 
• All costs associated with the project, including labor, materials, equipment, and supplies. 

The aim of these reports is not just to determine information about company finances but also to provide insight into how well you are doing in terms of completing projects on time and within budgeted costs. At CJCPA, we help businesses and contractors analyze, organize and create accurate financial reports.   Safety Management In construction, safety is paramount. Effective safety management includes a systematic approach to managing risks, identifying hazards, and maintaining high safety standards on a job site. Involving CFO in an active safety management program will save you money by reducing insurance premiums, eliminating lost time due to accidents and injuries, and avoiding legal costs and disruptions caused by claims.  Final Words  Since the construction industry is one of the top economic drivers, many organizations focus more on day-to-day operations and often neglect strategic duties. It is high time for contractors to re-look at their financial management and start getting professional help from CFOs.  Chief Financial Officers typically prove to be beneficial for construction companies due to their experience and understanding of unique financial needs. They play an important role in the success of a company by helping and managing accounting and finance practices, making sure that financial records are up-to-date and accurate. If you’re looking for a CFO to help manage your company’s finances, look no further.  At CJCPA, we offer reliable bookkeeping and accounting services to multi-sized private and public institutions, contractors, builders, and consultants. With a team of real estate and construction tax accountants, we cater to your personal and business demands.  Contact Us Now to know more about our accounting and CFO services.   

 Common Payroll Mistakes & How To Avoid Them When you become an employer, you are bound to make mistakes along the way, some bigger than others. While business expansion and steering through the ever-changing business landscape would demand most of your focus, business finance, bookkeeping and accounting are the first and obvious to be oversighted. You may get an opportunity to resolve most of the finance and accounting mistakes as long as your employees are being paid accurately and on time. Payroll is a complex and time-consuming process which is subject to ever changing regulations. Correct and on-time pay is one of the most basic expectations an employee has from the employer. Payroll mistakes can cost employees and businesses alike. Correcting payroll errors takes time and can be incredibly unsettling for employees. Also, failure to comply with federal, state, or local rules can lead to fines & penalties while losing talent to other employers who are considered more accountable. This blog covers some of the most common payroll mistakes and tips to avoid them.  Misclassification of Workers   Misclassification of workers results in payroll errors and may lead to underpayment or overpayment. It happens when a company considers a person as an independent contractor but treats him more like a regular employee, or vice versa. Misclassification can lead to :

• Issues with right to Minimum wage, overtime pay
• Issues with taxes, insurance, retirement contributions and other benefits
• Lack of control over the work environment (e.g., no set hours, no guaranteed pay)
• Right to collective bargaining
• Protection from wage discrimination

Tips to avoid

• Consult Legal Experts
• Refer to government resources and self check services
• Review your contracts with the self employed contractors
• Train your Managers to identify any misclassification and to be conscious in assigning work and responsibilities to the workers
• Take corrective measures as soon as misclassification is identified. This could mean converting contractor to employee

Missing Payroll Deadlines Missing payroll deadlines is one of the most common payroll mistakes and is easily done. Your employees rely on their paychecks as much as you rely on funds to run business, perhaps even more. For most people, it’s crucial to have a stable source of income to make the ends meet. They may not have finances to wait an extra day or more for you to wrap your head around the week’s payroll. However, missing payroll deadlines not only impact your employees but can have serious legal consequences and penalties imposed by Canada Revenue Agency (CRA). Tips to avoid Manual payroll calculation can be tedious and error prone. Using a payroll software can help calculate the number of hours worked, taxes, and generate the final paycheck. With Payroll Software Program in place, an employer can:

• Manage employees and their pay periods, including deductions and withholdings
• Track time worked to calculate overtime payments
• Manage financial benefits such as RRSPs, pensions, and overtime payments
• Efficiently report income tax returns
• Save money by reducing manual errors and payroll processing fees

Miscalculating Payroll amounts It's very common to make errors when calculating payroll amounts. There are many reasons why an employer can get wrong about payroll, it could be a simple mistake, such as failing to include holidays or overtime pay. It could also be more deliberate and intentional, like underpaying an employee or overpaying them. Whatever the reason, it can lead to significant problems for both the employer and their employees. Tips to avoid To prevent payroll miscalculation, employers should:

• Know employees' hourly rate, overtime rate and shift differential

• Calculate base salary and other compensation before calculating overtime and other allowances

• Ensure to pay employees on time and either use payroll software or partner with an experienced payroll service provider like CJCPA to provide accurate calculations avoiding error and mistrust
• Give each employee a copy of their pay stubs for them to check their individual hours worked daily, weekly or monthly

Not maintaining proper Payroll Records  Payroll records are an essential part of the payroll process. Without proper payroll records, it becomes challenging for a company to establish whether all its workers are paid correctly and on time. Also, the company will have difficulty complying with tax laws and regulations. In Canada, payroll records are vital for both federal and provincial governments to ensure that taxes are paid on time, and employers need to keep track of how much money they owe to their employees. As such, it is important for businesses to make sure that their payroll records are up-to-date. Tips to avoid To ensure that you are complying with relevant payroll regulations, make sure that the payroll system is set up correctly and that it has been updated regularly. Here are a few things to check whether payroll information is accurate or not:

• Ensure employees are aware of their responsibilities regarding record keeping
• Ensure they are listed in the payroll system
• Keep a track of their hours worked and when they were paid
• Review your payroll records every month 
• Keep track of sick days or vacation days earned

Failure to remit withheld taxes Failure to remit withheld taxes in a timely manner could result in penalties, interest, and charges. Therefore, it is important for employers to verify that all taxes are properly withheld from employees’ wages and remitted timely.  However, if an employer fails to do so, CRA may issue a notice of assessment which will require them to pay the tax due plus any penalties and interest incurred. Tips to avoid To avoid penalties, it is important that business has sufficient records and documentation to prove the amount of taxes withheld from employees’ wages. Most efficient step is to approach an experienced CPA firm like CJCPA which has vast experience in dealing with these issues.  Final Words Payroll is a big responsibility. Even one mistake can have serious repercussions for your company and employees, something that really cannot be understated. You need to be vigilant about making sure that payroll responsibilities are handled properly. Fortunately, payroll errors can be easily avoided as long as the company is not misclassifying its workers, properly recording and calculating payroll amounts, and meeting deadlines.   We, at CJCPA, have a team of professionals and accountants committed to provide proactive bookkeeping and payroll services to help avoid common payroll mistakes and ensure you're properly outfitted to handle bookkeeping and tax-related tasks. Don't let payroll mistakes stand in the way of your business's success. Contact us for payroll services.   

Tips for Managing Small Business Finance

      As a small business owner, there is always something important that necessitates the utmost attention, time, and effort. Managing finances is one of them and perhaps the first one to be procrastinated for another day. Despite understanding the importance of maintaining accurate financial records, a small business owner may not have the time or knowledge to correctly track & handle company finances. This is where financial mismanagement begins and quickly becomes overwhelming. Study shows that most businesses fail in their initial stage due to a lack of structured financial management.     From administering cash flow to planning funds, everything is crucial for a business to run smoothly. Whether you are in a starting phase or considering expansion, you need to manage your firm’s income and expense flow efficiently. Smart, small business accounting practices are essential for managing your daily operations and planning for long-term growth while avoiding costly errors that attract penalties.   The following tips will help you to organize and manage your finances.    Register your business   The first step towards managing finances is to register a business. Start by choosing a suitable structure that determines ownership, business liability, and tax implications.  These are the most common business structures in Canada -   

• Sole proprietorship

 

• Corporations

 

• LLC

  Next would be finding a suitable name for your venture that can help people find it. The name should precisely represent your venture and the services provided. However, please check whether the decided name is available or not since you can not take an identical name from an existing firm. This could be done by conducting a NUANS name search - a tool from the Government of Canada to search for all registered businesses and trademark names across Canada or a particular province.   Finally, you can register your venture name through the Government of Canada website. Business registration makes the owner legally obligated to open a separate business account, therefore making it the next important step toward managing finances.    Separate business and personal finances   When it comes to maintaining a streamlined operational process, separating your finances from personal is essential. As an owner, merging personal purchases with a business account can lead to difficulty in managing finances. Unlike a sole proprietorship, if the business is registered as a corporation or LLC,  it is identified as a separate legal entity. Ideally, it is a recommended practice to separate business finances from personal ones as it helps to navigate operational expenses, making tax returns and bookkeeping easier. Therefore, to separate business and personal finance in Canada, you must consider opening two different bank accounts.   Types of bank accounts you can consider are -  

• Chequing Account - It is a transactional account designed for daily transactions, paying bills, and making payments and purchases. With this account, a person can withdraw and deposit money anytime without paying any interest, as it is used to conduct daily transactions and is meant for pertinent use. 

 

• Savings Account - This account is ideal for keeping funds for short and long-term business goals since the account earns interest. When required, transfer the funds to the chequing account for use as a direct withdrawal from the savings account attracts withdrawal charges. 

  It may also help to have a business credit card for operational expenses. This further helps in streamlining finances and helps to build business credit. Cash backs, reward points, etc are some additional benefits.   Monitor the business's financial position   Analyzing financial statements can tell more than just numbers, it gives insights into the performance and financial health of a company. Determine and interpret some important calculations to monitor KPIs in liquidity, profitability, solvency, valuation, and growth. Gather a general idea of how well the business is performing by tracking up-to-date cashflows through automated software like Quickbooks.    Determine the business's ability to repay all its creditors and evaluate whether it can withstand any financial downturn. Assess the working capital – the amount of money any organization has to meet future expenses and to run daily business operations. Most importantly, review a snapshot of the company’s market and economic value using some commonly used techniques such as asset valuation, market capitalization, book value, and DCF analysis.   Ensure customers pay on time    It's important to ensure you have a timely payment method with your customers. Failing to do so can put you and your business on the back foot over late transactions. Issue an invoice and send reminders to keep your customers informed of the due amount and date. Mentioning a delay penalty charge may also help ensure timely payments.   Using different modes of payment and digitizing payment methods helps ease the payment process for customers. You can add links and details of online payment platforms such as PayPal, and Net Banking in the mail or invoice to receive payments on a timely basis.   Know day-to-day cost   Keeping a tab on the daily and operational expenses helps identify unnecessary expenses while making operations more efficient, organized, and aligned within budget. Keeping a track of business expenses helps control the avoidable spend and may also help claim deductions at the time of tax filing.   Keep digital receipts instead of paper as they are safe and provide ease of access when required.   Keep accounting records up-to-date   Even small changes in a business’s income or expenses can have a big impact on a profit and loss statement. Keeping track of accounting records can assist companies to prepare accurate financial statements and help monitor progress.    Shift to an automated accounting system for making the daily task of recording transactions efficient and instant. You can forecast revenue, reduce the risk of errors and eliminate unnecessary losses by keeping all records up-to-date with accounting and bookkeeping software. Depending on the scale of business, it is advised to spend an hour or two per week reviewing and reconciling books. This helps in making sound decisions and getting a clear view of your business income and expenditure.    At CJCPA, our professionals manage your finances with our effective bookkeeping and payroll services.   Have a budget for taxes   Set aside the funds you'll need to pay the government during the tax season. Failing to meet the tax deadline due to a shortage of funds can lead to fines and penalties from CRA. Know the dates of some important tax deadlines

• Personal Tax 
• Corporate Tax
• GST/HST

  Organize records to know how much tax you owe and schedule your tax filing day on the calendar so you don’t miss it by any chance. Stay hassle-free by setting up a separate tax account for handling your financial and tax liabilities.   Hire an accounting expert     For a small business owner, it is difficult to manage everything alone. Therefore, it helps to take professional help to look after your business finances. A good accounting expert like CJCPA helps you understand the financial situation, identifies potential financial risks and takes effective steps to solve them.    Final words   Financial management is an integral part of running a business. It encompasses all the actions you need to take in order to ensure that your business runs as smoothly and efficiently as possible. At CJCPA, we deal with accounting and other back office functions which includes bookkeeping, GST/HST/PST, payroll, management consulting, and cloud accounting services, allowing you to focus on business growth and expansion.    Contact Us Now for online bookkeeping and accounting services and allow us to help you scale up your business.  

  Consider this – you have been able to manage your money successfully throughout your life. Wouldn’t you want to decide what happens to the money, property, and other assets when you are gone?  If your answer is yes – you need strategic and well-formulated estate planning. It means arranging or transferring your assets in the unlikely event of death or incapacitation, to your spouse, children, and relatives.  In simpler terms, estate planning is a structural blueprint that dictates who will inherit your possessions and valuables, therefore, guaranteeing financial security and keeping your legal affairs in order. Whether you are a journeyperson or retired personnel, it is never too early or late to plan your estate. It involves a variety of processes including:

• Making a will and naming someone to be in charge of carrying out your wishes
• Determining who will care for your children (if they are minors) 
• Arranging your assets so that you only pay minimum necessary taxes
• Putting insurance plans in place to pay bills, support your survivors, transfer assets, and more

In this blog, we have discussed why a solid estate plan should be arranged:-  Protects your family Protecting your family is paramount and everyone wants to do it in the best possible way. Since stressful and uncertain times are always overwhelming for individuals and families, crucial decisions must be made at the earliest phases of life to protect them from unforeseen situations. A structured estate plan can help secure the financial future of your loved ones and safeguard them from any misfortunes and unwanted inheritors.  Moreover, despite common notions, estate planning isn't just for the ultra-rich, rather it is a highly-recommended process to be carried out by everyone in general.   Ensures the right beneficiaries  When it comes to protecting your assets, you must take the time to decide on the right people. There is nothing worse than seeing your hard-earned assets ending up in the wrong hands. By preparing a will, you can decide how it can be distributed, and who gets what and when. A will is a legal document that gives instructions on how an estate can be handled after death. Therefore, we recommend preparing a well-thought will if you don’t want the court and state laws to take all important decisions for you, leaving you with no right to distribute your assets to the preferred person in the family.  Eliminates probate and court fees Choose and review your beneficiaries  You do not want to be one of the many people who have their estate probated, spending thousands on legal fees. Avoiding probate fees can help your family minimize the added stress of handling the estate alone. Probate is a phase where the court checks whether the will in the name of any executor is valid or not. The entire process can take about 6-18 months to settle and incurs heavy fees on your family. In Canada, the probate fees vary from province to province and are levied based on the size of your estate. For instance, the probate fee for an estate worth 50,000$ is zero in Ontario whereas in British Columbia the fee can go up to 0.6% of the estate value. Therefore, to eliminate these hefty charges and other expenses, preparing a legal will and creating a comprehensive financial plan would undoubtedly be a wise strategy. Support a favorite cause  Make a difference in the world by contributing your legacy to those in need. Donating your estate to charity is one of the best ways to leave a legacy. An estate plan can help you contribute for the greater good, leaving you satiated with a sense of generosity and joy.  Also, voluntary benefactions can be an effective way to minimize estate taxes and the probate process. Your assets will pass directly to the charity of your choice, so you no longer have to worry about selling them or paying off debts.  Saves your family from tax  Taxes can affect your family in many ways. The best way to reduce tax burdens is to make sure your assets are distributed to the next generation as smoothly and efficiently as possible.  Without an estate plan, many factors can come into play, for instance -  If you die without a proper trust and will in place or without any spouse or beneficiary to roll over, you and your family could be subjected to a 50% capital gains tax on the sale of your estate, therefore, decreasing the amount received by beneficiaries.  Let’s understand with an example-  If you have 90,000$ in your RRSP/ RRIF account and no family member is listed as a beneficiary, then the amount will be treated as your income and 50% of the money you own may go straight to the CRA.  At CJCPA, we arrange a well-structured estate plan for you and your family, guiding them to manage and shrink their tax liabilities in a legitimate way. Saves Time and Effort A proper estate plan can significantly help reduce time and effort when dealing with emotional and difficult times. From drafting a will to setting up trusts, everything can be arduous and time-consuming.  With proper compilation and organization of all relevant estate planning documents, one can save their family countless hours of turmoil. To do that, simply save all the records in a single and safe place and inform your family as well as the estate executor about the documents. It is also worth knowing that a well-managed estate plan also avoids the time and expense of a probate process which can take over a year to complete, therefore, saving a substantial amount of time and effort. We, at CJCPA, set up all your records and help you plan your legacy. Take a glance at some important steps toward your estate planning:-

• Prepare a will, it will let you decide to whom your asset will get passed on
• Consider trust as it avoids probate
• Make advanced health care directives 
• Get an attorney who will look after your finances
• Assign a guardian to your minor children 
• Choose and review your beneficiaries 
• Keep your documents and files in order 

Conclusion Estate planning can be challenging. From preparing a will to transferring the assets, you may need an expert’s advice. At CJCPA, we ease out the complex procedures of an estate plan through our constant effort and guidance, ensuring financial safety and peace of mind for you and your loved ones. We have a seasoned team of real estate accountants who are highly qualified in providing strategic estate planning solutions to individuals and families, helping them in every step of the way. Contact Us Now for our estate planning and real estate tax services in Canada.

As a business owner, you are faced with many choices. If you’re in start-up mode, you are managing just about everything in your business - from bookkeeping to sales, from marketing to employee management, and more. With such a vast set of activities, the financial health of the business is often overlooked.  Your financial data must be current and accurate so you have the tools you need to make sound business decisions and implement healthy cash flow strategies. And as your business grows to include more customers, vendors, and employees, keeping track of your finances on your own becomes more challenging. Pretty much every business needs some form of a finance lead or a bookkeeper to maintain the financial records. While this could suffice in the early stages of business, you would need an experienced financial professional to review the numbers and map them with your strategic business goals and the company’s intended outcomes, from the financial point of view. CFO brings financial visibility into your business so you can make smarter business decisions and leverage opportunities as they come. Financial visibility means having accurate, timely, relevant, and insightful information which in turn helps in:

• Better cash flow control
• Increased operational efficiency
• Sustainable business growth

While all of the above are crucial for the long-term success of any business, small or mid-sized businesses may not have the financial resources or the business need to hire a CFO on their payroll. Hiring a fractional or virtual CFO can prove beneficial here.  Hiring a CFO has a lot of advantages. Let’s discuss them one by one.

• Cash Flow Management 

Cash is the lifeblood of every business, especially small businesses, and early-stage startups. Cash flow must be monitored proactively and planned thoroughly to avoid a cash crunch scenario. An experienced fractional CFO can help with an accurate cash flow forecast for working capital - both in the short and long term. A virtual CFO offers cash flow management advisory services and helps limit expenditure ensuring that the business maintains its financial health.

• Prepare Budget & Financial Forecast

The majority of business owners are busy running their day-to-day operations which may shift the focus away from the financial health of the organization. This in turn impacts the business readiness for long-term objectives and strategies.  The experienced CFO will examine your company's financials in detail while you focus on running your core business operations, identifying pain points, and undertaking course corrections as required.  At CJCPA, we offer business consulting and valuation services and develop data-driven plans that can help your business gain a competitive advantage. 

• Structure for Sustainable Growth 

For early-stage start-ups agility through ad hoc communication and shared responsibilities seem like the most effective way of work. While this close collaboration between core members would work in the immediate term, it will become counterproductive when the business operations and the team starts to expand. At this point, you will need a better structure to streamline both accountability and responsibilities for smooth business operations.  A CFO can help you understand the pros and cons of different organizational structures for better staff supervision and direction while being cost conscious. CFO services can help build a strong foundation to adapt to business conditions.

• Reduce Risks

All firms are susceptible to risks like bankruptcy, market downturns, lower profitability, and unpredictability, regardless of their industry and size. Each of these elements has a significant impact on the financial stability of your business. Your CFO will assist in developing plans to manage your business risks comprehensively and proactively. You need to safeguard your firm from the unexpected - ranging from insurance to business succession planning.

• Boost Your Profit

A professional CFO, such as CJCPA, assists you in setting financial and profit benchmarks using industry norms and averages. CFO can help bring efficiency to business operations by reducing avoidable expenses thereby improving profitability and ensuring sustainable business growth.

• Expert Eye

It could be difficult for you to take a step back and consider everything objectively at times when you are mired in the day-to-day operations of your business. CFOs serve as a sounding board for financially viable business choices that may have an influence on long-term business growth. A competent CFO has knowledge of and insight into the opportunities and problems faced by diverse industries. They can therefore offer a different perspective and expertise to optimize a business’s operational expenses. Partner With CJCPA  Searching for a CFO that fits your culture and has experience in the relevant industries? Look no further.  At CJCPA, our business plan experts provide assistance to grow your business tracking and managing industry-specific challenges. For more information, schedule a 30 min free consultation call with our professionals. Drop us a line at jas@cjcpa.ca  

  Whether you are a small-sized business or an established enterprise, one of your biggest worries is to ensure enough working capital on hand to run the business on a day-to-day basis. Payroll may be a non-core recurring activity but it is a time-intensive process and demands accuracy - making sure all tax and legal obligations are met.  As an owner and manager of a growing business, it is worth the effort to find the right service provider and outsource your payroll system. An experienced service provider can perform the following tasks:

• Compute payroll and tax obligations based on employee time sheets
• Provide management reports 
• Employee self-service provider
• Tax Liability
• Labor Allocation
• Custom Payroll Management Services
• Accrual Balances 
• W2 Forms and Tax Return Filing
• Job costings 
• Pay Registers

Here are the top reasons you should choose for outsourcing your payroll services:

• Reduce Regulatory and Compliance Risks

Fast-paced regulatory developments that have an impact on payroll can make maintaining compliance a difficult and time-consuming procedure. To guarantee that these changes are correctly reflected in the payroll system, it is crucial to keep up with legal changes. When revising payroll calculations, errors are common, especially when IF, AND, OR logical operations are used. Payroll calculations made using an erroneous formula may result in issues like under or overpaying taxes and salaries. And you may not even recognize a mistake until you've been issued a costly non-compliance fine. You can reduce your exposure to these compliance and regulatory issues by outsourcing your payroll to a specialized service provider, like CJCPA. 

• Enhanced Security and Data Protection

Payroll processing involves extremely sensitive information, so data security is essential. Adequate security measures must be implemented to reduce the possibility of Funds Abstraction or corporate data tampering, both of which can result in significant losses. These safeguards must be in place for payroll service providers. Employers can protect their private information by outsourcing payroll to a reliable company that invests in cutting-edge technology, has a redundant backup, and has various server locations.

• Maintain Accuracy and High-Quality Standards

Payroll processing service providers offer solutions that are highly accurate and error-free. Error reduction has long been a top priority in the processing of payroll. In addition to reducing labor costs, it also resolves complaints. Due to its direct connection to worker satisfaction, it is a crucial component of any organization.  Outsourcing has the important benefit of reducing the possibility of fraudulent activity. Since there are many factors at stake, advanced technology is available and affordable, outsourcing financial services can lead to more meticulous task execution. Due to their primary focus on building trust and obtaining revenue, there are very few chances that outsourced organizations will engage in fraudulent operations.

• Saves You Money & Time 

Instead of devoting hours to payroll processing, which is a time-consuming administrative task, you can focus on achieving strategic goals. Consider hiring a professional to handle payroll accounting, relieving the payroll department and increasing the company's competitive advantage.

• Increases Flexibility 

Payroll outsourcing also allows you to maintain flexibility in quickly evolving business environments. Instead of having to hire, onboard, train, and retain additional internal personnel, outsourcing enables you to swiftly increase your payroll service requirements as needed.

• Minimizes Stress

When it comes to payroll, there is no room for error; timely and precise payment of your employees is essential to the success of your business. However, when internal teams are juggling the demands of an expanding staff with the requirement to maintain local regulatory compliance, managing payroll effectively can be difficult. Your payroll is in the finest hands with CJCPA since our team of payroll specialists will handle payroll management for you, making sure that pay runs are effective, accurate, and compliant.

• The Expertise of Hiring The Professionals 

Outsourcing to a competent payroll service provider gives your company access to a pool of payroll knowledge experts without incurring the cost of hiring them internally.  Our team of skilled payroll professionals assists with payroll management for businesses of all sizes, types, and industries. Leverage our extensive experience and skills to construct your business effectively so that you can focus on achieving greater heights. Partner With Professionals Your Payroll Processing project needs a team of knowledgeable, experienced, and skilled professionals to be successful. Consider partnering with us.  At CJCPA, we reduce your overhead, freeing up your key personnel to focus on expanding your company. Contact us today for a comprehensive evaluation of your requirements.

5 Ways To Improve Cash Flow In Your Business

Cash flow is one of the key measures to follow when forecasting your company's future growth; having a positive cash flow entails far more than just profitability. By maximizing your company's cash flow, you can help it receive profits faster, meet targets in less time, and reduce operating expenses.  According to a US Bank study, poor cash management accounts for 82% of all business failures. This is due to the fact that most entrepreneurs lack the view to think outside the box and fail to incorporate business strategies to improve their cash flow. Positive cash flow, however, cannot be achieved through a simple 'producing and selling’ strategy. As a business owner, you must consider various methods for providing your company with consistent cash flow.  Let’s look at the following five methods for improving cash flow in your business. 1. Create A Cash Flow Statement The Cash Flow Statement provides the precise figure of cash inflows and outflows from the business's various operations. It aids in determining future cash requirements by comparing past cash budgets with the present. It provides accurate information about the business's cash-based transactions. The cash flow statement is primarily used in gearing up the cash budget for future needs and in determining the business's periodic cash requirements. Also, it uncovers the key changes needed to improve the business's financial position and prioritize important management activities. 2. Establish a Business Budget According to research, businesses that establish and adhere to a budget are nearly two times more likely to grow revenue than businesses that do not have a budget. A solid budget allows you to set a course for your company and track and measure its progress and performance. Budgeting is the most efficient way to manage your cash flow, enabling you to invest in new possibilities at the right time. It's the single most effective way to keep your spending under control so you can hire, grow, and market your business without depleting your resources. 3. Reduce Operating Expenses  Review your expenses on a regular basis and identify areas where you can save money. 

• Cut out unnecessary expenses:  carefully consider your current expenses and eliminate any unnecessary expenses in order to effectively manage your cash flow and expenses.

• Streamline your business processes: Focus on reducing time and costs, as well as analyzing all of your current business processes to find ways to speed up the process.

• Replace old equipment with new ones: Investing in newer equipment and technology saves time, which reduces wage costs while increasing output or the ability to take on additional projects.

• Lease efficient equipment: If you don't have the cash to buy equipment outright or don't qualify for a working capital loan, consider leasing it and benefit from lower monthly payments to help keep your cash flow under control.

• Ask suppliers for wholesale rates: Some vendors provide discounts for purchasing inventory in bulk. So, ask your suppliers if they have any deals.

4. Incentives For Early Payments & Penalties For Late Payments Invoicing is a time-consuming and labor-intensive process for many businesses. If you find it difficult to hold your clients accountable and abhor having to follow up on late payments, consider implementing an incentive and penalty program. For instance, discounts could be practiced to any account that is paid on time or early, and interest could be added to any invoice that has been ignored for an extended period of time. These actions will incentivize your customers to pay you early, instantly improving your cash flow. The benefits? Not only will more of your customers pay on time or early, but you'll also save time and resources by not having to constantly confirm that payments have been received. 5. Improve Marketing  Marketing is the most important factor in increasing your company's cash flow. The reason for this is that better marketing lowers your cost-per-lead while increasing the lifetime value of your customers and expanding your market reach. Struggling to build trust and credibility with your customers? It’s time to launch a digital marketing initiative that educates your leads, increases conversions, and improves your company's image, particularly online. Conduct customer interviews and thorough competitor research to gain insight into your customers' demands and offer accordingly. Final Words Implement these strategies to gain control of your company's finances and increase its cash flow. Still feel that you cannot implement all these strategies without help?  Consider partnering with a top business planner like CJCPA. At CJCPA, we have a team of accounting and financial professionals, including accountants, financial analysts, business plan experts, and CFO service experts, all committed to providing top-notch services to help you identify expenses and opportunities to improve your cash flow. Contact us today for cash flow management advisory services. 

Accountants vs Bookkeepers: What’s The Difference?

Keeping track of your finances is an essential part of running a successful small business. Your financial data must be current and accurate to help you make sound business decisions and apply correct cash flow strategies. Recording and tracking the finances on your own may be a viable option in the initial stages of the business, it will become difficult as your business expands. When the bookkeeping and accounting tasks for your business become too much for you to handle on your own, it's time to outsource them to a professional like CJCPA. But do you require the services of a bookkeeper or an accountant? Even though these terms are used interchangeably due to a few overlapping responsibilities, there are some distinct differences as well. Let us assist you in deciding who to hire for your specific requirements. Difference Between a Bookkeeper & an Accountant

Bookkeeper	Accountant
Record business financial transactions - receipts, payments & expenses	Review financial statements
Conduct monthly bank reconciliation	Prepare adjusting entries
Send out and record invoices and invoice payments	Review and analyze financial statements
Process payroll	Analyze the cost of the operations
Process bill payments	Assess financial health and make financial forecasts
Provide the year-end financials and tax documents to the accountant	Conduct Internal Audits
	File Tax returns, conduct tax planning, and provide tax advisory

  Basically, the bookkeeper’s role is to record transactions and keep the business financially organized, whereas accountants are in charge of categorizing, evaluating, interpreting, reporting, and summarizing this financial data.  Accounting begins where bookkeeping ends A bookkeeper is responsible for the initial categorization and recording of a company's transactions such as bills paid, daily sales, payroll, and other expenditures. As part of the accounting process, the bookkeeper must correlate and insure the books or records and present them to the accountant. An accountant, on the other hand, examines the bookkeeper's financial records and statements to aid in analytical interpretation. The professional accountant analyzes and interprets bookkeeping data to assess financial health and make financial forecasts.  Advantages of Hiring a bookkeeper

• Recording and Organizational services: The bookkeeper assists in tracking and organizing financial documents and reports, which helps analyze the financial health of the business.
• Direct Assessment: While accountants provide detailed analysis, a bookkeeper can provide you with a simple overview of your company's financial situation.
• Expertise: A skilled bookkeeper can provide you with peace of mind and assurance that your finances are in good hands.
• Less Expensive: Bookkeepers typically charge less than accountants for their services. The exact amount depends on the amount of filing and documentation required.

Advantages of Hiring an Accountant

• Legal Assistance: Due to their qualification and expertise, accountants can compile financial documents & data to assist your business in dealing with any legal issues. Accountants' experience with corporate taxes can also assist businesses in avoiding CRA legal issues.
• Professional Analysis: An accountant reviews & analyzes a company's financial statements and advises business owners during financial decision-making.
• Business Finances Management: A trained accountant can keep track of your finances all year, ensuring that your reporting and statements are correct and that your accounts are properly balanced.
• Expertise: Accountants bring much more valuable expertise and advice in regards to tax returns, tax planning, and advisory.

A Bookkeeper or An Accountant: Whom To Hire? Hiring online bookkeeper and accountant services is essential for every business. However, the need for one or the other may vary for each business. Understanding when the professional expertise of a bookkeeper or accountant is required, either separately or jointly, will be determined by factors such as:

• The company's line of business
• The inventory size of the company
• The number of employees at the company
• The range of services provided by the company
• Whether or not the company requires financial assistance

Outsource Your Company’s Financial Services to Professional Bookkeepers and Accountants: The business world is constantly changing, and regulations that keep businesses afloat, such as licensing and taxation, necessitate exceptional financial accounting services. Most transactions involving partners or financial institutions require transparent and trustworthy financial statements. The best business manager is the one who understands the company's accounting needs and knows when to hire a bookkeeper versus an accountant. Consider partnering with CJCPA, we provide bookkeeping, accounting, and business advisory services that are customized to your specific business requirements. Book a free consultation today or drop us an email at jas@cjcpa.ca. 

7 Advantages Of Hiring A Virtual Bookkeeper There’s no getting around the fact that to run a successful business, owners need to keep their books up to date. Recording, analyzing, and interpreting financial transactions is a large portion of the accounting process for any business. Bookkeeping provides businesses with accurate information regarding their financial activities and progress at any point in time.  Accurate financials and well-organized books are essential for:

• Making informed, data-driven decisions
• Understand profitability
• Demonstrating accountability and transparency to stakeholders
• Effective planning for medium and long-term business goals

Hiring the services of a seasoned bookkeeper is the most effective way to keep your financial records in order. However, this does not imply that small businesses must devote resources to filling this critical role internally. In fact, hiring an outsourced, virtual bookkeeping service provider is often the most cost-effective solution to gain financial control. Virtual bookkeeping allows professional bookkeepers to provide regular accounting services remotely. Online bookkeeping not only provides flexibility in terms of location and hours but also allows for easy, shared access to your accounting and financial documentation. Functions of An Online Bookkeeper  A virtual bookkeeper is responsible for the same functions as an in-house accountant or a bookkeeper. The tasks of a virtual bookkeeper range from:

• Setup and process books of accounts
• Ledger Maintenance
• Accounts receivable and payable
• Accounts reconciliation
• Cash flow management
• Budgeting
• Payroll processing
• Financial Reporting
• Reconciling bank and credit cards statements
• Remitting sales tax returns 
• Year-end accounting

Let's look at the most significant advantages of virtual bookkeeping:

• Maintaining Financial Records 

A virtual bookkeeper handles all financial aspects of your company, such as payroll, sales invoices, bank feeds, purchase invoices, and accurate reporting. They ensure that you have an effective system in place that keeps records of business financial transitions for better decision-making. 

• Proficient Payroll Management 

When you have a virtual bookkeeper to send you regular reports and walk you through the payment process, payroll management is a breeze. At #CJCPA, our top-notch bookkeeping and payroll services for small businesses provide the much-needed backend support to your business so you can focus on core business activities.

• Handling Legal & Regulatory Concerns

Reading the fine print can be difficult at times. The main cause is a lack of time. A trained bookkeeping virtual assistant can assist you in keeping up with changing tax laws, rules, and regulations. Hire a competent bookkeeper, such as CJCPA, who keeps up with new standards and adopts them to provide accurate reports to clients.

• Monitoring Your KPIs

A virtual bookkeeper keeps you informed of your company's financial situation. With a well-crafted cash flow statement, income statement, and financial report, you can easily keep track of all financial aspects of your business.

• Preparing Taxes

A virtual bookkeeper prepares your taxes, maintains tax filings and taxable accounts, and ensures tax filing as per CRA deadlines. 

• Unbiased Perspective 

Having someone from outside your company handle your finances ensures that there is no personal bias or connection to the business's internal affairs. At #CJCPA, we provide an unbiased perspective on your business’s financial scenario and recommendations to improve it.

• More Time To Grow Your Business

Online bookkeeping and accounting services are a much more convenient and cost-effective alternative to hiring an in-house employee. This will give you more time to work on more pressing issues that are critical to your business. Your virtual bookkeeping assistant will handle all financial matters for you, so you won't have to. Final Note A Bookkeeper can bring your past books up-to-date and take everyday bookkeeping tasks off your plate with guaranteed accuracy. Organized financial records and properly balanced finances produced by the bookkeeper contribute directly to the long-term success of every business. Therefore, hiring the services of a bookkeeper should be seen as a real investment in your business, as it brings you more in revenue and savings that you end up paying. Hire A Professional Virtual Bookkeeper Today At CJCPA, we understand business and provide customized solutions and advice to help you focus on the parts of the business you really love. We are here to take the guesswork out of running your business. Get in touch with us. We are excited to be a part of your financial journey!

Maintaining accurate financial records is crucial when running a business. One of the simplest yet easily missed things is setting up your accounts correctly from the start.  Depending on the structure of your business, you may be required to keep business funds in a separate account. If you are a sole proprietor, you may not be required to keep a separate account at some point; however, if your business is organized as a partnership or corporation, you must. Continue reading to discover the most compelling reasons to open a business account. Also Read: Top 10 Bookkeeping Tips For Small Businesses

1. Track your business cashflow with ease

Keeping your business and personal finances separate enables you to manage and respond to your cash flow situation efficiently. With a separate business account, tracking & management of funds becomes efficient as it assists you to better understand business performance and forecast cash flow for the coming months/quarters. Plus, the more organized your financial records are, the easier it will be to access funding from a lender or credit provider.

2. Make your accounting more efficient

When tax season arrives, you would want to ensure that you did not miss any legitimate business deductions. If your business and personal expense accounts are the same, reviewing every transaction on your bank statements can be stressful and time-consuming, increasing the likelihood of omissions. Keeping your personal and business expenses separate not only simplifies the process but also helps avoid claiming a personal expense as a business expense. It also makes record-keeping easier and aids in the identification of taxable benefits and deductions.

3. Strong Business Credit Score 

Although clubbing personal and business finances may seem easier to maintain at first, it will lead to complications eventually. Keeping a separate business account aids in the development of your company's credit rating. Your business credit score, like your personal credit score, reflects the creditworthiness of your company. A good credit score helps you get better terms on business loans and lowers the cost of business insurance.

4. Protect your assets from legal liability

Separating your business assets from your personal finances can help protect your assets in the event of legal action. If you fail to keep your business and personal affairs distinct, courts may decide to "pierce the corporate veil," which provides limited liability. When deciding on the type of business entity to establish, keep in mind that some offer more protection than others. Therefore, it is advisable to consult an experienced CPA while incorporating your business. Furthermore, please ensure that any business operating agreements such as lease agreements and supplier contracts have your business name and account information mentioned on them. 

5. Establish a business image and credibility

Opening a business account is a critical first step if you want your organization to be taken seriously. Making and accepting payments into a business account contributes to a more proficient and trustworthy image. When you have a second account for business funds, your business name will appear on invoices and payment paperwork rather than your personal name. This will aid both suppliers and customers become more familiar with your company's name. Final Words  Even if your business is new and not yet profitable, it is critical to get off to a good start by keeping personal and business finances separate. At CJCPA, we advise all business owners to do the same, while we keep your records ready for tax season or audits. Our experts streamline your books and provide accurate financial statements, allowing you to focus on business growth. Connect with us TODAY and explore our best-in-class services to address your financial needs.