Have you ever wondered ‘what do bookkeepers do’? Well, lucky for you, you’re in the right place to find out! We know it can be a bit confusing distinguishing between an accountant and a bookkeeper. That’s why we will break it down for you and explain what exactly bookkeeping is, what bookkeepers do, and how it differs from accounting.
Bookkeeping involves the recording, storing, and retrieving of day-to-day financial transactions and information concerning the business. In other words, bookkeepers literally manage the business’ books and retain documentation for their business transactions.
What Do Bookkeepers Do?
Now it’s time to answer the popular question, ‘what do bookkeepers do?’. As noted earlier, bookkeepers record your business’ daily transactions, including receipts, purchases, sales, and payments. Bookkeepers typically track these transactions using cloud accounting software like QuickBooks Online or Xero. Moreover, bookkeepers keep a complete and accurate record of these financial transactions. The business’ receipts and documents are usually stored digitally in the cloud through receipt apps like Hubdoc and Receipt Bank. As you can probably tell, bookkeepers tend to be very tech savvy.
What Bookkeepers (Typically) Don’t Do
For the most part, a bookkeeper’s work ends there. The accountants then further analyze the financial records provided by the bookkeeper. Accountants will classify, analyze, summarize, and interpret the financial reports. Simply put, bookkeepers generate financial data, and accountants turn that data into information.
Some Bookkeepers Do It All
However, this isn’t always the case. Some bookkeeping firms actually offer the additional services that are typically passed on to accountants. These additional services usually include data verification, classifying and analyzing accounts, preparing tax returns, offering financial advice, and generating financial reports, such as balance sheets and profit and loss statements.
As you can probably imagine, it is much more convenient to have a bookkeeper that can do it all. First of all, you save the cost of hiring two separate professional services. Secondly, only having one allows them be more familiar with your books and business financials as a whole. On the contrary, if you have two separate financial professionals, they will need to coordinate their work and will only be exposed to half the picture. If you do have both a bookkeeper and an accountant, you will need to make sure that they share the information they discover so both parties have the full picture and all relevant information.
UpSide Accounting is a perfect example of a bookkeeping firm that offers basic bookkeeping services as well as all of the additional accounting services. We are a one-stop shop for accounting; bookkeeping, tax, planning, advice, and more! If you want to learn more about what we do and how we can help your business grow, please contact us for a FREE consultation!
Mike Widdis’ story began from humble beginnings. His parents divorced when he was 6 and his little brother was 3. When Mike was 8, his mother went back to school full-time to become a teacher. During this time, she needed social assistance along with OSAP to help support their family.
As you can imagine this would have been tough on his mother doing her very best to provide (all by herself) for her family. Mike’s and his brother’s childhood were spent differently than most kids. They ate tuna and Kraft Dinner 6 nights a week for dinner and their Christmas’ didn’t normally consist of presents under the tree.
However, thanks to Mike’s mother’s ability to manage a budget and plan, his family was able to overcome the challenges that life brought them. The struggles in his upbringing taught him important financial skills at a young age. This explains why he believes that financial management is key.
He has witnessed secondhand how poor financial management can contribute to poverty, depression, violence, and dependency on drugs. As a result, Mike became really good at financial management and began helping others to get them through hard times. This led to the founding of UpSide Accounting.
As opposed to focusing on helping single individuals, Mike Widdis developed a passion for helping small businesses. He believes that small businesses drastically improve communities and the families within them, creating a larger and more sustainable impact. These are the values that UpSide upholds.
1. Tell Me About Your Situation Growing up and How It Made You the Person You Are Today.
Mike Widdis – Growing up was kind of tough. We didn’t have a lot of money. There was myself, my brother and my mom, who was a single mom from the age of six. So I kind of had to grow up fast. I was just kind of thrown into doing the typical big brother stuff at an early age, taking care of my brother after school and walking him home.
There was no time to really be a kid. There were just other priorities involved, right, and so that kind of affected me to this day to be a little bit more responsible at an early age and to want a little bit more, to try a little bit harder. Yeah, there’ll be time for fun when I retire!
Being a new dad now, I mean my daughter’s not even a year old yet. I now know kind of what my mother was going through, and to have two young boys who used to fight a lot could be stressful. I get it and she did well under the circumstances. That kind of drives me to want more out of life, to be a better person. Especially now, because like I said, being a dad you view the world in a whole new way. Suddenly things are just that little shade different.
2. What Inspired You to Do Better Despite the Odds Being Against You?
Mike Widdis – I’ve definitely bettered our surroundings from where I grew up, it was kind of a rough neighborhood. My mother was on welfare and went back to school trying to better educate herself to become a teacher. Then accounting kind of got her again after that and she’s still in accounting today.
But, again, growing up helping her to raise my brother, that’s really tough. Having such a limited budget, my mother did extremely well and I solely put that on her financial skills. Her ability to budget and manage her wants. I mean, I remember eating tuna and Kraft dinner six nights a week and that seventh night sometimes my brother and I got to go to McDonald’s across the street and get a happy meal. My mother would sit there and watch us eat it and she’d come back home and cook herself pasta, because there just wasn’t enough money for everyone.
The struggles that she got us through really made me who I am. It made me strive to get out there and teach more people about the little things you can do to change your lives. A little bit of planning and a little bit of self-control goes a long, long way.
I solely believe that the Canadian education system should teach people this stuff in school because they certainly can’t learn it from home if they’re in that type of situation. I mean, there’s no fault there. But, it’s up to the education system to kind of step in and give some basic groundwork.
A lot of people could go a lot further. Maybe you would see a reduction in crime, violence, drug dependencies and mental dependencies. Better mental health. It’s a lot of hard work. But with some basic skills I think it’s doable for a lot more people than are achieving it today.
3. How Did You Get into Helping Others with Their Accounting?
Mike Widdis – I started doing my own personal tax return at about 14 years old. I had my first job, so I had a T4 and I decided to learn how to do a tax return. Actually, my mother helped me. I found it quite easy, to be honest. So during high school when some of my other friends got part-times jobs, I started helping them do personal tax returns. Just from trial and error and my own situation, I was trying to figure out personal finances and was learning, just sharing it with friends.
That built in to sort of a hobby where I would do tax returns for some people for a little bit of money. As I was frustrated in the construction industry, which is what I entered right out of the high school, I just decided to turn to what came easy to me, what I actually liked doing. So I started offering my accounting services and went back to school to learn accounting.
4. What Inspired You to Create Upside Accounting Specifically?
Mike Widdis – I started helping my mother in her own business; she’s been in accounting for a lot of years. She started her own business when I was a teenager. She’s kind of that old school bookkeeper where she just wants to go to clients and make a decent amount of money to pay her bills and that’s fine.
Whereas I was younger and more ambitious and saw a need, a giant need in financial education, because the public school system doesn’t put any emphasis on it at all. So I think that’s a real lacking skill in the world today, especially in Canada. I was good at it so I wanted to make a difference. Strike out on my own. Help as many people as I can, grow a team and really do something worthwhile for the Canadian economy.
5. How Did You Raise Enough Capital to Start Your Own Business?
Mike Widdis – The very base of it was a couple of small clients that I attracted when I was still working with my mother. One of them was a good friend of mine I’ve known since early high school. That was the start of the income. I also then applied to a program, which is now called Futurepreneur, and I got some funding there for young adults, I was 29.
I qualified for their program and had to write a business plan. Halton Region Small Business Centre helped me write this business plan. Then I had go in front of a panel and basically justify my business plan in front of some other business experts from the community, which was very valuable. That also got me into BDC so BDC matched those funds. So it was a great program to start. I highly suggest that anybody who thinks about starting a business to check it out.
That along with the business plan and the drive to get out there and network to meet some new small business owners was enough to launch me forward and get me off the ground. It also allowed me to buy the necessary tools that I needed to start generating some income.
6. What Do You Need to Become an Entrepreneur from Nothing?
Mike Widdis – You need grit and you need balls. You need to want it! If you don’t want it and if you don’t want it bad enough you’re not going to succeed. You have to really be honest with yourself, dig down, think about it. And some people are just not meant to be business owners. Some people are not meant to be entrepreneurs. Some people are meant to be really great at what they do in an employee setting, which I think is phenomenal. The majority of the world is and the majority of the world does fall into that category.
Sometimes I’m a little bit jealous of them, because it is kind of stressful running a business. But there are some rewards too. And some people are just meant to be entrepreneurs. I’m one of those people that is just meant to be doing this.
Honesty is the most important thing that you can have with yourself. Really think about the pros and cons. The grass isn’t always greener on the other side. Figure out if it’s really for you and sometimes the best way to do that is try it, fail and say, “Cool. I did it. I tried it. Not for me. I’m going back to what’s better for me and my lifestyle and my family.”
7. What Advice Do You Have for Aspiring Entrepreneurs Who Think They Don’t Have It in Them to Start Their Own Business?
Mike Widdis – They probably don’t. If you have any doubt right now, it’s tough. You have to want it really bad. You have to want to get up at 5 AM and want to do things after work. It requires sacrifice. Sacrifice your health, your friends, even going to parties. You have to sacrifice a lot.
I mean, either you throw yourself into it and really get out there and do it. Or if those things are maybe more important to you, and to some people they are (and that’s fine), maybe you would think twice before starting a business. But if you really, really want it bad enough you’ll do those things gladly.
8. If You Could Go Back and Change Anything, Would You?
Mike Widdis – It’s a tough question. I mean the experiences made me who I am and where I am today. Get there a little bit sooner, maybe. Stop doubting myself. However, some of the doubts might’ve held me back from some major catastrophe so it’s really tough to say. I’m just glad I got out there and did it and tried it.
9. What Is the Best Piece of Advice You Have Ever Received?
Mike Widdis – Hire slow, fire fast.
10. How Did You Overcome the Intimidating Statistic That 90% of Startups Fail?
Mike Widdis – I think that goes back down to your want. Just keep grinding, keep pushing forward. There needs to be this fine balance between drive and holding back and planning. It’s a real fine line and sometimes you end up on the other side of it. But as long as you’re quick enough to realize that maybe you’ve gone a little bit too far or maybe you haven’t gone far enough sometimes and pull yourself back to kind of neutral, you can continue going forward and keep learning.
11. What Were the Necessary Business Tools That You Could Not Have Founded Upside Accounting Without?
Mike Widdis – The first thing you should have is a plan. Figure out some kind of a marketing strategy and figure out some kind of a budget, at the very least. Get out there and just start talking to people. Plans change. It never ever, ever goes according to plan, but you have to get out there and start somewhere.
These days with a smart phone, I mean you can do almost anything. We’re recording this on a smart phone right now, how’s that? That’s working better than this laptop and fancy mic that we have! So, you don’t need a lot these days. Like I said, just start with a plan. Get a cell phone, if you don’t already have a cell phone and like I said, go out there and talk to people.
Legalization of marijuana has been a huge debate for years. Now that it’s being legalized, a lot is about to change. One potential change from an accounting standpoint is whether there should be a marijuana business deduction. The CRA has already confirmed that medical cannabis purchased under prescription is an allowable medical expense to the medical tax credit. So if the CRA is allowing this, what else will they allow once it becomes legal?
Let’s go back in history for a moment. Remember the prohibition from 1920 to 1933? Alcohol was banned once too. However, now it’s even allowed as a business deduction under certain circumstances. For instance, currently you can deduct up to 50% of the cost of drinks during a business meeting as a meals and entertainment expense. Will that be the same with business meetings over a joint as opposed to drinks? Let’s walk through it.
Stance 1: It Should be Included as M&E
First of all, this could be beneficial to creative professionals. Certain strains of marijuana promote creativity. In other words, marketers may want to have a meeting over a shared joint instead of over drinks to induce creative thinking and ideas that they wouldn’t have thought of otherwise. Or graphic designers might want to use it to get their creative juices flowing as they design your innovative logo with fine details. However, even if you don’t mind your graphic designer working high, you might not want your accountant or lawyer doing the same.
Let’s move on to comparing alcohol with cannabis. Alcohol is a depressant and marijuana is a hallucinogen with depressant effects. This means that both intoxicating substances are similarly categorized with soon-to-be similar legal rights. So how different are they really besides differing societal standards?
Another consideration has to do with health. Alcohol is fine in moderation and is often thought to be beneficial to your health. Although, in excess alcohol can also be addicting, damaging to your liver, lead to cancer and even death. On the other hand, cannabis is actually used medically for several health conditions. Marijuana provides plenty of health benefits and research shows that it is much safer than alcohol (once you are over the age of 25). So if marijuana is similar to but safer than alcohol, should there be an allowable marijuana business deduction under the meals and entertainment expense?
Stance 2: It Should NOT be Included as M&E
Despite marijuana being “legalized”, it will still be illegal to smoke everywhere except on private property in Ontario. This law will vary by province. As a result, you won’t be able to go to your regular restaurant and enjoy some marijuana with your meal like you can with alcohol. The only way you can legally conduct your business meeting over say a joint is if it’s in your house or on a private property that allows marijuana use. As a small business owner, would you want to hold a meeting in your own house? Probably not as it is less professional.
Another issue is that marijuana is still taboo. Marijuana is not widely accepted like alcohol has become. There is a stigma attached to it. BUT you could still say the same for alcohol. This stigma could make it a questionable and risky decision to request a business meeting over a shared joint. Just like some people don’t drink and might feel strongly against it, the same is true for marijuana. You would have to tread cautiously here.
One last issue has to do with the difficulty in distinguishing the amount used for business during meetings. Unless you buy a single joint to share for that specific meeting, it’s not as simple as ordering a drink or two. If you buy it by the gram, you would have to somehow verify that the amount you claimed was solely for business use. This would be challenging and cause potential dispute by the CRA.
In the end, it’s all perception and societal constructs. Now that you read our thoughts on this debate, let’s start a discussion. What are your thoughts? Should there be a marijuana business deduction for meals and entertainment purposes? Whether you think yes or no, we want to listen to what you have to say!
Bookkeeping eliminates stress in many aspects of your life. At UpSide, we believe entrepreneurs should enjoy work time and family time. Why limit yourself? Experience business growth, be present, and make your life an adventure.
1. More Time Spent with Your Family
Do you find that you are missing family events, time with friends, or constantly being late for dinner? By having a professional take care of your bookkeeping, you will be surprised by how much time they save you. That way you can spend more quality time with your family and loved ones.
2. Have Piece of Mind that Your Finances are Handled
If accounting is not exactly your forte, then handling your business’s finances can be a huge burden. Worrying about your taxes for the CRA and getting audited can also be stressful. If this sounds familiar, then having a professional handle your taxes and bookkeeping eliminates stress (yay!). More importantly, you can trust that your taxes are being filed correctly and that your tax returns are being maximized (double yay!).
3. Spend Work Time More Efficiently
Moreover, instead of dedicating critical work time on your books, you can spend your time more efficiently on what matters most. This can include sales, operations, networking, marketing, and more. Get back to what made you so passionate about starting your business and continue spending your efforts on growing it.
4. Be More Present Outside of Work
Furthermore, having a professional bookkeeper means that you have someone to talk to about your finances. At UpSide, we are here to listen and give you advice. This means that you can keep your business and personal life separate – as it should be! We give you someone to talk to so that you can spend meaningful time with your loved ones (and talk about something other than your business for once!).
5. Get Advice when You Need It
Lastly, our team at UpSide will listen to your worries and give you business and financial advice. We are here to help your business’s growth and success. In addition, your bookkeeper will be familiar with your financial situation. This means that they can give you professional advice on ways you can improve your business, both in the short-term and long-term.
We know that being a small business owner can be stressful. However, we strongly believe that bookkeeping eliminates stress. At UpSide, we take care of your books so that you can spend your time on what matters most to you and for your business. If you are a small business owner looking to relieve stress, contact us and we can see if we are a good fit.
There are several benefits of cloud accounting. If you do not know what cloud accounting is, it is accounting using software that is hosted on the cloud, or rather, online. Cloud accounting thus differs from the traditional accounting software hosted locally on a computer’s hard drive. Most importantly, cloud accounting holds many benefits over traditional accounting. Read further to discover the many benefits of cloud accounting.
No More Hoarding Receipts
Is one of your pet peeves having to store physical records of all your business receipts? If so, I have good news for you! There is no longer a need to store physical records of your business receipts. For cloud accounting, you use receipt apps like Hubdoc and Receipt Bank and simply take photos of your business receipts. They are then stored digitally on your chosen receipt app that is accessible by you and your accountant.
Available Anytime, Anywhere
Since your data is stored in the cloud, it is available anytime, anywhere. This means that while you are traveling, whether it be for work or pleasure, you can still access and manage your business’s financials. Moreover, you can submit your business receipts immediately instead of hording them for the entire trip.
Real-Time Overview of Financials
Another one of the many benefits of cloud accounting is that your data is able to be updated in real-time. This allows you to have a clear overview of your current financial position. By being able to access your financial data and information quickly, you will be able to make more informed business decisions with less delay.
Greater Efficiency, More Time Spent Where it Should
Cloud accounting software has automatic updates so you can spend more time doing what you love. Furthermore, the time saved from eliminating the need for sorting receipts and driving them over to your accountants office means more time spent where it should. Instead, the minute you get your receipt you can quickly take a picture of it on your receipt app and then forget about it. Let the receipt app do the sorting and labeling for you. On top of that, you no longer have to worry about downloading and emailing or printing all of your business bank statements on a monthly basis. Cloud accounting software such as Quickbooks Online or Xero and receipt apps connect to your bank accounts and update your transactions and statements in real-time.
Another one of the benefits of cloud accounting is that you are able to significantly reduce upfront business costs. Cloud-based software does not incur costs such as upgrades, maintenance, system administration costs, and server failures like those associated with traditional software.
Cloud accounting facilitates a paperless environment by eliminating the need to physically store paper documents. This is beneficial not only to the environment, but also from a cost and office space perspective.
As a small business owner, there is much concern about the security of the cloud. Contrary to popular belief, the cloud is actually a more secure way of storing information. There are several reasons for this. First of all, cloud accounting software has automatic backups. This ensures that your data is never lost and ensures that your information is always protected and accessible. Secondly, if your device is stolen, no one can access your data without your login information. This is because your data lives online instead of on your hard drive. Finally, in the event of a fire or natural disaster, your data is not affected because all of your information is securely stored off-site. As long as you have access to the internet through a computer or mobile device, you are good to go.
The cloud is the future and it is important for your business to keep up and work smarter and faster. Cloud software can save your business valuable time and money. If you want to learn more about growing your business and maintaining a competitive edge, please contact our team. We would be pleased to help you through this transition smoothly.
Being a small business owner allows you to have many tax advantages. With tax season nearing an end, learn about some deductible expenses to keep in mind so you can maximize your tax return for the next tax season.
All advertising expenses can be deducted if your advertising is directed at a Canadian market and the original content in the publication is 80% or more of the publication’s total non-advertising content. Otherwise, if it is less than 80%, you can deduct 50% of the advertising expense.
Business Tax, Fees, and Dues
You can deduct annual license fees and business taxes incurred to run your business. You can also deduct annual membership fees or dues if it is for a trade or commercial association.
Delivery and Freight
You can deduct delivery and freight expenses related to your business in the year they were incurred.
You can deduct all commercial insurance premium expenses on any buildings, equipment, or machinery used in your business.
Legal & Professional Fees
You can deduct the fees you incurred for your business for external professional services or advice, including consulting fees. You can also deduct accounting and legal fees you incurred to get advice and help with your financial statements. Moreover, fees incurred for preparing and filing your GST/HST and income tax returns can be deducted.
Meals and Entertainment
The maximum amount you can claim for meals and entertainment expenses is 50% of the lesser of either the amount you incurred for the expenses or an amount that is reasonable in the circumstances. This limit also applies to meals when you travel for business. In addition, entertainment expenses include gratuities, room rentals, cover charges, and tickets and entrance fees to a sporting or entertainment event.
The cost of office expenses for small items, such as pencils, pens, stationary, paper clips, stamps, and more can be deducted.
Telephone and Utilities
Expenses for telephone and utilities can be deducted if you incurred them to earn an income. In addition, if you have a home office space, you can deduct the proportion of your home utilities that apply to that space.
You can deduct travel expenses incurred to earn a professional or business income. These expenses include meals, public transportation fares, and accommodations.
For a more detailed, exhaustive list of deductible expenses and all limitations or exclusions, please visit the Government of Canada. If you want to find out more ways your business can save you money, feel free to contact us and we would be happy to chat!
It’s an unfortunate reality that so many of us always wonder why our wallet is suddenly much lighter than we remembered not long ago. Developing better business money habits can help you save money and help create the lifestyle that you always dreamed of.
So why wait for the New Year or to pay off your debt to start saving money? Start now and you can begin seeing results sooner. Don’t wait for the “right time” because there won’t be one. Here are some tips to help save money now!
Keep Track of Receivables
One sure way to create better business money habits is to increase your collection of receivables. The faster you collect your receivables, the faster the cash flows into your business. There are a few ways you can do this. First, always try and follow up with customers to ensure that they received their invoice. This will either give them a friendly reminder to make a payment or, if they didn’t receive the invoice, give you the chance to send it over. If possible, an Accounts Receivable clerk should be appointed to manage the collection of receivables. This will further encourage fast collection of receivables if they are being closely and constantly monitored.
Another way to increase collection of receivables is to implement a sales contract with payment terms, such as 2/10, N/30. This means that if the customer pays their invoice within 10 days, they get a 2% discount off the original price. Otherwise, after 10 days they must pay the invoice in full and after 30 days interest is typically charged. By creating fast payment incentives and late payment consequences, you encourage the customer to pay their invoice a lot faster than if there were no payment terms. In addition, this also minimizes the likelihood of uncollectable accounts due to delayed receivables.
Discuss Payment Terms
Another way to develop better business money habits is to discuss payment terms with your suppliers. Your payment terms should be longer than or equal to your accounts receivable terms in order to maintain positive cash flows. Although, be mindful that you don’t want to delay your payment terms so much that you harm the relationship between you and your suppliers.
Start Small for Big Results
Don’t try and change all your finances at once. This will only create an impossible feat. Instead, identify the area of financial reform that will make the most significant impact, and focus on that. These small changes are easy to incorporate into your everyday life. Moreover, make sure that this area fits with your priorities so that you’re invested in the end result. Then, once you improve this area you can move on to other areas. Before you know it all of these small changes will lead to significant results. Some areas to prioritize in order to improve your financial life include:
Paying down debt
Saving for retirement or a down payment on a house
Everyday Decisions Add Up to Larger Profits
Last, but definitely not least, the best way to save money and increase cash flow lies in your everyday decisions. By being mindful and making it a habit to save money wherever possible on a daily basis, you will notice your unnecessary expenses decrease which will lead to greater profits. Soon enough, you won’t even have to think about these decisions anymore as they will become a habit during your everyday life.
We know that saving money can be a difficult feat. Hopefully these tips will help improve your business money habits. Interested in learning more? Contact our team and we would be happy to advise.
As a small business owner, is there a way to save on tax using my family’s medical expenses? The short answer is, absolutely! There are a couple of different ways.
Eligible Medical Expense Claims for all Taxpayers
First, not only business owners, but every taxpayer has the right to claim eligible medical expenses on their personal tax return every April. There are a couple of downfalls though. The medical tax credit doesn’t kick in until you have more than 3% of your net income in expenses or $2,237 (whichever is less). So, a taxpayer with an income of $75,000 would get no benefit from spending over $2000 on medical expenses. Also, this is a credit, not a deduction, and deductions are always better!
HSA Deduction – Small Business Owner Benefit
One benefit of being a small business owner is that you can choose to have your business set up a Healthcare Spending Account (HSA) which is a deduction to your business income. Every dollar your business spends is eligible, no minimum like the tax credit. You get to choose the monthly amount that makes sense for your situation. When you have an eligible expense, you can submit the receipt and be reimbursed 100% from this account (up to the account balance). On top of that, this reimbursement usually only takes a couple of days! Moreover, even if your spouse has benefits from their employer, which may only cover a portion of the difference, can also be reimbursed from your HSA. It includes everything that you are out of pocket for yourself, your spouse, and all dependents.
There is a long list of eligible expenses on CRA’s website www.cra-arc.gc.ca/medical. Take a look, you may be surprised at the items that you may have missed taking advantage of in the past. Getting a HSA setup is just one way to maximize your hard earned dollars and save on tax. If you want to learn more about the HSA deduction and other benefits of being a small business owner, please contact us and we would be happy to chat!
Blockchain is the future of finance, and the future is right around the corner! With technology constantly advancing, it’s critical for your small business to keep up to date. Otherwise, you risk falling behind and getting lost in the past. To stay informed and learn more about Bitcoin and the blockchain, including its benefits, keep on reading!
What is Bitcoin and the Blockchain?
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” – Don & Alex Tapscott, authors of Blockchain Revolution
So what is Bitcoin and the Blockchain that everyone’s talking about? A blockchain is a public ledger of all Bitcoin transactions that have ever been carried out. The completed blocks are constantly added to the growing blockchain in a chronological order. More specifically, the blockchain contains the full history of the transactions, where you can think of the blocks as being individual bank statements. Thus, the blockchain creates a permanent and unalterable database of all Bitcoin transactions. Also, since the blockchain is decentralized, you can carry out Bitcoin transactions directly, without any third-party intermediary. In sum, the blockchain’s mission is to create more a open, fair, and accessible financial future.
Benefits of Using Bitcoin
“As revolutionary as it sounds, Blockchain truly is a mechanism to bring everyone to the highest degree of accountability. No more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved. Above anything else, the most critical area where Blockchain helps is to guarantee the validity of a transaction by recording it not only on a main register but a connected distributed system of registers, all of which are connected through a secure validation mechanism.” – Ian Khan, TEDx Speaker
Wait, so we don’t have to wait for days for a transaction to clear the banks? That’s right! Bitcoin allows two users to make an exchange without the intermediation of a third party. As a result, Bitcoin transactions only take minutes to complete and are processed constantly. Hence, people around the world can now validate and transact immediately using Bitcoin. Moreover, by eliminating third party intermediaries, costly transaction fees will be minimized.
The blockchain consists of decentralized networks that are spread over millions of computers. Therefore, this eliminates the risk of a central point of failure or weakness. In effect, the blockchain is more resistant to malicious attacks since no centralized information exists for a hacker to exploit. The data is accessible to users all around the globe and is secured by encryption technology. Encryption technology is more secure because it uses randomly generated strings of numbers that can only be decrypted using a private key. This is much more effective in comparison to the common “Username” and “Password” security method.
Any changes made to public blockchains can be viewed by all parties, which creates transparency. The data is public because it is embedded within the blockchain network as a whole. Furthermore, all Bitcoin transactions are immutable. This means that they cannot be altered or deleted, which minimizes fraudulent activity. Consequently, the transactions are internally audited through blockchain technology. In other words, small business owner’s won’t have to worry about keeping track of these transactions (say goodbye to hording receipts!). On top of that, the stress and pressures of an audit are reduced, since all of the transaction information is permanently stored.
High Quality Data
Lastly, Bitcoin transactions provide high quality data that is complete, accurate, timely, and universally available. Since blockchain technology records every Bitcoin transaction ever executed, it can also provide historical insight.
Hopefully, after reading this you have gained some insight about Bitcoin and its benefits. In brief, the blockchain and Bitcoin provide endless opportunities to those around the world, such as secure cost- and time-saving benefits. At UpSide Accounting, we are now accepting the digital currency, Bitcoin! If you’re a small business that currently operates using digital currency, contact our team and we would love to see if UpSide is a good fit for you.
Congratulations, you got your small business off the ground and running! Where are you going? You know the basics now, like strong bookkeeping, the importance of an accountant, and the pros and cons between sole proprietorship and incorporation. As you continue to streamline, your services get a little fancier with your business practices. We’ve got some great tips to help you find the money to do so.
Begin with Budgeting
Balancing your books is only part of the battle to business success. Realistic and emergency budgeting is at least as vital to making it past 5 years. Your budget should include the things you expect like overhead, wages (including yours!), benefits (also including yours!), taxes, and marketing. It should also include things you don’t expect, like downtime and emergencies. Ideally you should reinvest up to 50% of your capital back into the business. After taxes, of course. If your business is growing at the speed of light, it’s not crazy to go ahead and reinvest 100% after taxes.
You might like to set aside a few hundred dollars to support local community events or join the local chamber of commerce. This will help get your name out there and build your professional network. We also advise that you tuck something away to pay for professional development opportunities, either for yourself or employees. And a little something more for awards – if you’re fortunate enough to be nominated for a business award, there’s a very good chance you’ll need to pay for your own dinner at the event ceremony itself.
Then Look at Financing
Those first few years of a new business are astronomically stressful because oftentimes you’re starting from scratch. No office, no equipment, no employees, no street cred, no customers, not even any Facebook followers. Before you bleed your savings dry, look into the many forms of financing available to get you started.
Bank loans are a main staple. Plus you’ve got the Canada Small Business Financing Program, angel investors, and crowdfunding. Both bank loans and the Canada Small Business Financing Program are handled by financial institutions. Angel investors are trickier to attract. However, with some solid online sleuthing, networking, and a solid business model and product, you may find what you’re looking for.
If you’re business is in Waterloo Region, you’re in luck! Check out the Golden Triangle Angel Network. We also recommend watching Dragon’s Den for pointers if you’re brand new to business. Finally, crowdfunding could be exactly what you’re after. Platforms to launch crowdfunding include rewards, donations, equity, and debt-coverage.
Tax Incentives and Grants are Reliable
Although retroactive, there’s no reason why you shouldn’t scope out available tax credits and plan ahead to capitalize on them. In particular, the Scientific Research and Experimental Development tax credit (a.k.a SR&ED pronounced “shred”) is designed to help businesses recoup a percentage of materials and time lost during product development. It’s open to all kinds of manufacturing, as well as some digital industries. Talk to your accountant for advice on how to track your time and materials in preparation.
Applying for grants requires serious budgeting and forward-thinking but the rewards are worthwhile. Government grants change regularly. Although, they’re generally available for expansion, hiring, professional development, capital investment, and research and development. There are consultants for hire to help you apply for grants. The government agencies themselves also tend to provide excellent support so you can apply on your own. However, beware that grants cannot be retroactively applied and often take upwards of 6 months to win approval.
Upside Accounting supports your business beyond the books. Our consulting services cover a wide range of industries and business needs from budgeting, best practices, and customized growth strategy planning. Contact us to find out how we can help your business by calling (226) 214-3233.