That Gateway Thing

We were in Granby.

Granby, just east of Montreal, is a gateway kind of place. It’s where the rolling hills of the Eastern Townshops begin to make their presence felt. If you haven’t been there, the Eastern Townships are a picturesque part of the world. Luscious hills, sparkling lakes.

But I wasn’t there for that. I wasn’t there for the lakes or the hills. I was there for work. I was there to discuss QuickBooks Online (QBO). Me and about forty other number-crunchers.

Later on, driving back toward Montreal, cool jazz playing on the car stereo–Miles Davis, that kind of stuff–I reflected on the day’s discussion. The word “gateway” came up; there was a lot of talk of gateways. About the way that QBO facilitates the transferring and sharing of data.

That’s what I like, you know, about QuickBooks Online. It’s a gateway app. A gateway to third-party applications that lets you do, well, just about anything. Need point of sale? Need time tracking? Need cash flow management? Need scheduling and CRM and project management? Yeah, we got that. And then some.

You use an app to take pictures of a receipt. You bridge that app to QBO and you’re now using your phone’s camera to input expenses. Use another app, also via QBO’s gateway, and you can pay anyone electronically. No more cheques, no more stamps and no envelopes. I mean come on, cheques and stamps? That’s so 1990, isn’t it?

Soon enough, the talk turned to something else, another sort of gateway. The gateway between the practitioner and client. Lines of communications have narrowed. Roles strengthened. Support more immediate, and information more current and more relevant. All of a sudden, the practitioner/client relationship is closer, more in sync. There’s less talk of what happened six months ago, or last year. There’s less talk of how someone did something. And more talk about how to do something. And why to do it.

The mood changes. There’s less (as one of my dear clients once termed it) “rear-view-mirror” discussions and more “where are things going?” planning. More depth; more meaning. All because of that gateway thing.

Oh sure. There are some, still today, who won’t get onboard. And that’s OK. Some people don’t want to hear of gateways, and even less of cloud.

Cloud! Cloud! Cloud! Cloud! What’s all this fuss about cloud?

Some don’t see the point. Some don’t get the benefits. My old software does this, my desktop software does that. And sure, that’s all good and true.

But it’s not about software. It’s about the philosophy of software. It’s about the way we think about it all. How are we going to use that software to strengthen relationships? To modernize the game? The playing field is larger, but the players are closer together. Things are more immediate, information more crucial and relays ever shorter. Today, we need to build communication, and support, and trust. And we need a gateway to do that. A really dynamic, really reliable gateway.

And that’s what stayed with me as I drove out of Granby, that gateway to the Eastern Townships. Gateways, everybody needs gateways.

It’s What Comes Out That Counts

Some people, in search of relaxation, play tennis; others chess or mahjong maybe. Me, to relax, I play the guitar. Except that, at times, this blasted instrument is not quite the stress buster I want it to be. Case in point: I was working on–and struggling with–a beautiful piece of music called Marieta. It’s an hypnotic piece, not overly complex (when compared to other contemporary pieces) but nuanced–a sneaky sort of nuanced.

Music is a cross between golf and, oh I don’t know, acting maybe. Like golf, it’s all about technique. And like acting, it’s the interpretation and interpersonal style that makes or breaks the end result. And it was frankly in all of that that I was struggling. I was tilting at windmills, trying to balance technique (the accurate placement on the fingerboard), interpretation (loud when the piece called for it, and soft when it didn’t) and style (making the whole thing cohesive and compelling).

Over and over, I started and restarted the piece–bar after bar–getting at times impatient and at other times impatient and frustrated.

And then a thought hit me. Instead of focusing on how to pluck the strings and how to position my fingers, what if I tried it with the other side of the instrument in mind? What if, while playing, I actually listened to what was coming out of my guitar? What if I tried to experience the whole process as a listener rather than a technician?

And you know what? Strange as that might appear, it actually worked. Focusing on the outcome made me more attentive to what I wanted to achieve. And that felt good.

And then, a little later, another thought hit home. And it was this. How often, as entrepreneurs and advisors, do we focus only on the effort that we put into a project? How often do we lose sight on what our customers are “hearing”–on what they’re experiencing? I mean, let’s face it, all too often, we’re solely focused on the technical side of the work we perform. Too many of us are all too self-aware and self-obsessed with the required skill and acquired dexterity of the oh-so-important work that we do. Which begs the question. Do any of us ever stop, even for a minute, to imagine what the person sitting on the other side of our desk is getting from all this? How often do we pause to consider the client perspective–the customer perception? Sad to say, for too many of us, the answer is, not very often.

And so, as entrepreneurs, as advisors and business owners, we’re missing the boat. We’re focusing on inputs rather than outcomes. And we’re losing a key opportunity to make our service more client-centric. So hear’s (get it?) a suggestion; let’s tune our ears so that we can listen from our clients’ perspective. Let’s view our work the way they might view it. And maybe that way we’ll solidify, even further, the client relationship. And we’ll all  enjoy the overall sound of success.

Great News if You’re an Accountant

Journal Entries. We accountants, we love our journal entries, right? Love them so much there’s even an accountant’s credo. There’s nothing that can’t be fixed with a neat and tidy journal entry. Yeah, journal entries, they’re the WD40 of number crunching; the duct tape of data entry.

And yet, for accountants, there’s always been a bit of a problem–a perfect storm of frustration–that would come crashing down whenever three particular elements converged all at once. And those three elements were:

  • QuickBooks Online
  • Journal Entries
  • Sales Tax Accounts

You know what I’m talking about right? I have certainly written about it before. Even offered a nifty workaround.

But now (well, as of mere weeks ago actually) it’s all good. If you’re an accountant, and you want to record a journal entry in QuickBooks Online, and you want–in that journal entry–to debit or credit a sales tax account. Well, go ahead. Knock yourself out. It’ll all work out. You won’t mess anything up and everything will remain in sync and in balance. All thanks to a new feature that adds a Sales Tax column in the journal entry window, a column that  now allows you to pick a destination line number on the corresponding sales tax return.

Which means, with this new feature, the GL and the sales tax report will always be in sync. No more out-of-balance reports. No more head scratching. No more adjustments. Which also means that your clients will, once again, view you–the fearless accountant–as the rock star that you truly are.



Yes, You Can

There’s been talk, a lot of talk, regarding QBO and sales taxes. The gist of that talk, of course, is about the inability to mix journal entries and sales tax accounts.

The fail is known by most of us. To recap, it goes like this. Debit or credit a sales tax account and, yes of course, QBO will update the general ledger. However, what QBO won’t do is capture that amount in the sales tax reports. And it won’t reflect it in the File Sales Tax routine either. Which means you’ll end up overpaying or—perhaps even worse—underpaying the sales taxes owed to CRA or other government agency.

This is not a good thing. And we all therefore go out of our way to avoid mixing jounral entries and sales tax accounts.

But did you know you can use a journal entry for sales tax accounts? And did you know that it actually works? What I mean is that, not only will QBO update the GL but the sales tax reports as well?

All it takes is a little workaround, and a clearing account. Here, let me show how to do it.

Let’s say you want to record a $50.00 GST credit. And let’s say you also want to debit a revenue account for the same amount.

The first step involves grossing up the sales tax amount. All  you need to do is figure out the grossed up amount of the aforementioned $50.00. In other words, assuming that the $50.00 reflects GST, then you have divide that fifty bucks by five percent. Which gives you a grossed up amount of $1,000. And that, right there, is the hardest part. You’re now ready to record your journal entry. Don’t forget, though, that you also need that clearing account I mentioned earlier.

OK? Alright then, let’s record the journal entry

Start by crediting $1000 to a clearing account. Then, choose GST in the sales tax column. Notice what QBO does at the bottom of the window? It adds a $50 credit to GST.

Now, debit $1,000 to that same clearing account. What you end up with, of course, is a wash. In other words, those two clearing account entries cancel each other out. Which means your final step is to debit $50.00 to your desired revenue account and, voila! Job done.

Using this method will mean that your GL and sales tax reports are always in balance. If you don’t believe me (and it’s OK that you don’t, you’re an accountant. You’re paid to be skeptical), here’s proof.

Here’s the GL: 

And here’s the Sales Tax report:

So there you go. Journal entries and sales tax accounts. Yes, you can.

Kinda cool, no?



How to Track 50% HST in QBO

This much is true: If you’re an entrepreneur, you have expenses. And if you incur those expenses in order to get more business, then those expenses are tax-deductible.

However, in their infinite wisdom, the kind folk over at CRA (Canada Revenue Agency) have determined to make Meals and Entertainment expenses only 50% deductible. Their logic, as I understand it, goes like this. If you take a client to a nice restaurant, the pleasure they derive from that fine meal is fully deductible. Your portion of the culinary treat, on the other hand, is on your own dime.

Hence the 50% deduction. And that’s the bad news.

The even worse news, though, applies to those that are GST/HST registered. CRA, driving the point to its logical conclusion, goes on to say that you can only claim 50% of the tax on that meal. Yes, you read right. When it comes to meals and expenses, you cannot claim the full GST or HST amount.

And so, in order to stay compliant with CRA’s rules and regs, this means you’ll have to set up a special sales tax in QuickBooks Online (QBO) that captures only 50% of the total tax amount.

Here’s how to do it.

Step 1:  With QBO running, click on Sales Taxes (in the left-hand Navigation Bar).

Then, in the Sales Tax window (below), click on Add tax.


Step 2: In the Add tax window, select Tax rate

Setting it all up is actually quite easy. Just keep in mind that, in order for QBO to properly calculate the tax amount, you’ll need to set up two taxes, each of them for 50% of the actual tax paid. The first tax you set up will track the amount of HST you’re entitled to receive as a refund (CRA calls it Input Tax Credit). The other tax you set up will treat the non-deductible portion as an expense

Also note, in this example, the assumption is your business is in Ontario and is therefore subject to 13% HST.

Okay? Great! Let’s move on.

Step 3: In the Add tax window (from Step 2) enter a tax name and description for the refundable portion of tax. Note we’re using M as the Tax name. “M”, for meals obviously.

Next, select Receiver General as the tax agency.

Now, click the Purchases checkbox, enter 6.5% as the tax rate, and select Liability as the type of account. Then, in the Show tax amount on return line field, choose Input tax credit (ITCs). 

Now click Save to close the window and proceed to the next step.






Step 4: Repeat Steps 1 and 2 and QBO will bring you back to the Add tax window. And this time you will set up the non-refundable portion of the HST amount.

As in Step 3, enter a Tax name (in this example “M Exp” which is an abbreviation for Meal Expense) and then enter a description. Once again choose Receiver General, click the Purchases checkbox, and enter 6.5% as the tax rate. This time though, in the Account field, choose Expense. Finally, click Save.






Step 5: In this last step, you need to group the two taxes that you set up in Steps 3 and 4. To do that, as explained in Step 1, click Add tax, and then select Group rate.












Enter a name and description, such as 50% HST, for the grouped tax, and then choose the two tax rates that you created in Steps 3 and 4. Make sure to select Net amount for each of the tax rates. Click Save and you’re done,










To use your new sales tax rate–in an Expense form for example–just select it in the sales tax field. In this example, we have a restaurant receipt for $113 which includes $13 HST.


In this window you can clearly see the background journal entry confirming that QuickBooks is treating 50% of the total HST as a refundable amount, with the other 50% going to an expense account. Which will make the kind folk over at CRA nod in admiration of your efficient bookkeeping practices.



What a Dumb Accountant Learned About Branding

It’s 4:45 AM. I’m sitting here, not far from my gate, inside the restricted boarding area of the Winnipeg airport, where there happens to be a Starbucks.

The airport is quiet, the Starbucks even more so. I’m lounging in a comfortable corner, and there’s Dylan—a more obscure, less recognizable version of Dylan—coming over the loudspeakers.

The music at Starbucks is always soft, usually tender—a catalyst for quiet reflection. For some reason, the white noise in the background only adds to, never diminishes from, the mood. I can hear the subtle bustle of the servers brewing a cappuccino, they’re talking, softly to each other, and to their customers. The whole thing makes for a pleasant experience. A curious one too, because today’s visit makes me realize that this is why I come to Starbucks. Not for the coffee. Not really. More so for the atmosphere, essentially for the mood, and especially for the music.

And even if it is, for me, about that wonderful background music, the funny thing is, as a music lover, most of the time, Starbucks is playing stuff I don’t know. I seldom recognize the artists; I rarely clue in to the music that’s playing. And I don’t want to know either. It’s as though the enigmatic nature of the music just adds to the magic of the experience. There are times, you know, when one should simply not pursue the ingredients of a perfect moment.

Starbucks, wherever I happen to be, and especially early in the morning, is a place I seek out—a relaxing place. A place that invokes memories of, well, other Starbucks. Like the one on King Street West, in Toronto; a location tailor-made for Flipboarding and people-watching, on a really rainy, really early, quiet morning.

That’s why I go to Starbucks. It’s a known entity. The environment is comfortable, the coffee consistent, and the staff helpful and pleasant.

Then it hits me. That word, that awkward word, the one that I, a clueless accountant, could never truly understand. That word that sounds oh-so-trendy, and so impossibly clichéd. That word that all the consultants and marketers use. That marketing term they called “branding”.

Is my Starbucks experience a result of branding ? Setting expectations, establishing a predictable, consistent message. Creating a mood. Is that what branding is all about?

It’s about Identity, isn’t it? Corporate identity. One that’s authentic and meaningful. That’s what it is, isn’t it?

Then I shake my head. Why didn’t they just use that word—Identity? Everyone, even dumb accountants like me, understands that word.

And then I shrug. I lean back a little more, and listen to the music at the Starbucks inside this quiet Winnipeg airport. And I go back to Flipboard. Sometimes, some things are better left un-pursued.

Shareholder Woes

So you just incorporated your business? Congratulations!

As you might already know, there are a number of advantages to incorporating a business (and if you’d like to know more about those advantages, click this blog post for a brief explanation).

If, prior to incorporating, you were operating a proprietorship  (just a fancy name for an unincorporated business) you might remember that any personal cash you withdrew (or advanced) to your business was treated as a draw or a contribution, and that those funds really had no impact on your bottom line.

With a proprietorship, your business income is effectively included on your personal tax return and, provided you’re paying tax on that income, CRA generally won’t kick up a fuss as to the amount you’re withdrawing from your business.

Knowing how a proprietorship works, the temptation, for many recently-incorporated business owners (let’s call them shareholders), is to continue to withdraw (or contribute funds) through their corporation’s bank account, to continue to ignore the actual balance of the draws and contributions, and to record every “in and out” in a Shareholder Loan account. In other words, shareholders will often lend money to their corporation—crediting that Shareholder Loan account—and when they themselves need cash,  they’ll just “borrow” it from the corporation—this time debiting that Shareholder Loan account.

And that’s where things can get ugly.

Unbeknownst to most shareholders, unlike a proprietorship, CRA views an individual and a corporation as two distinct and separate taxpayers. And as such, CRA takes a very different, very narrow, perspective on what a shareholder can and cannot do via a Shareholder Loan account. Though CRA’s rules can be somewhat arcane, here are some important principles to keep in mind.

  • While a shareholder can “borrow” money from their corporation, it’s crucial to know that CRA has specific rules that address not only time-limits, but also the allowable purpose of those shareholder loans. And there have been countless instances of shareholders, unaware of CRA’s regulations, finding themselves on the receiving end of very severe (and very expensive) penalties.
  • Because CRA views a shareholder and a corporation as two distinct taxpayers, any amount a shareholder regularly receives from her corporation should usually, in one way or other, be treated as taxable income by the shareholder.
  • The balance, not to mention the series of transactions that contribute to the balance, of the Shareholder Loan account cannot be left unattended and ignored.
  • If a shareholder inadvertently expenses personal amounts in her corporation’s books and, if CRA—via an audit—discovers the error, CRA might, regardless of the Shareholder Loan balance, impose tax on both the shareholder and the corporation.

Though there are exceptions to the rules mentioned above, those exceptions, (like the rules themselves) are somewhat complicated. As such, whether you are now (or about to become) incorporated, we strongly recommend that you get in touch with us so that we can discuss CRA’s rules regarding Shareholder Loans.

Sunny Days; Sunny Ways

My friend, Carmin, he’s pretty good with a camera. The man, I tell you, has one helluva eye.

Given that we’ve known each other since the days of dinky toys and jet ice cream bars, we have, over the years, embarked on a number of pursuits. Some worthwhile; others perhaps of the foolhardy kind.

Long story short, we decided to, once again, collaborate on a trial project. The goal being to put words and images together.

Here’s our first attempt. Thought I’d share it with you.


I can’t remember who it was, Maria maybe, that raised the question.

We were here, mere steps from Parliament Hill, surrounded by a sea of humanity, a never-ending crowd—young, old and in between—almost everyone dressed in red, or white, almost all of them expectant, celebrating, waiting for the Canada Day festivities to begin. And Maria poses the question.

“What makes us Canadian?”

Actually it wasn’t Maria asking the question. She was just relaying it. Explaining how that very question was asked of her by a puzzled European, one who couldn’t quite understand the mix and makeup of Canada, and of Canadians.

“How are you a Canadian?” This man from Italy asked her, “What national trait defines you?”

And we stood there, listening. And we shrugged. Then we offered the stereotypical reply, the one that pointedly maps out who are by explaining who we’re not. “We’re not like Americans are,” Someone suggested.

Yes that much is true, we’re not like them. We don’t broadcast our nationality, we don’t wear it on our sleeve (except maybe during Olympics hockey). No, no, we’re quieter than our neighbours to the south, more subdued. And yeah, yeah, we’re polite. And contrite. Painfully so. Like that time, visiting a friend, and I absentmindedly walk into his coffee table, bashing my shin. And my friend says, “Oh, sorry!” Sure, because it’s his fault I wasn’t paying attention. It’s his fault the coffee table was in my way, just a few inches from his sofa.

But you know what? Whatever we are, whatever it is that defines us, we are all of us out here, in Ottawa, in the tens of thousands; all of us out here, celebrating Canada’s 149th birthday.

The noon hour approaches and the crowd builds, more and more of us—more and more of these ill-understood and ill-defined Canadians—making our way to Parliament Hill, and then standing patiently, joking, chatting. And waiting.

Taking it all in, I’m reminded of something. Star Trek. The USS Enterprise and its crew. Romulans and Vulcans and Humans (of course). They all look so different, they all sound so different. And they all pull together, work together, in order to… well, you know how it goes. You know what it is that Captain Kirk (played by a Canadian) says at the start of every episode.

PM Trudeau

A buzz builds, a cheer goes up, flags wave more enthusiastically. Our fresh-faced PM, Trudeau fils, has arrived. He’s a people person this Trudeau. He’s got the common touch. Watching the large monitors, I can see it. People lean forward, hoping to get a glimpse, they hold out their hands, hoping to shake his. People adore him, this Justin Trudeau. And they love Sophie, his self-made and elegant wife.


I glance at the crowd. It’s a feel-good moment. All these people, of all stripes, lined as far as I can see, stretching east and west along Wellington Street, spreading south all the way down la Rue Metcalfe.

And I brew about that European. Maybe he had it wrong. Maybe it’s our diversity, rather than our cultural uniformity, that marks us as Canadians. Maybe we’re just like the USS Enterprise. We all look different? We all sound different? Who cares? Different is good. Different is dramatic. Because… who wants to eat vanilla ice cream every day?

So, we make it work. We make the nation and the nation makes us. Sometimes the work comes easily. Sometimes not so much.

There’s more electricity in the air. Something’s happening. I glance left, then right. A finger points up, toward the sky. I’m surprised to see the finger is mine. Excitedly pointing at the smoke trails, heading toward us. The Snowbirds, coming in fast.


They swoop in from the east, nine of them, quietly, at first. They’re so close, how do they fly so bloody close? One plane looks different, out of proportion. Only when they’re overhead, no longer quiet, I see it’s a CF18. It’s so much larger, so much more menacing, than those sleek, almost-dainty Canadair jets used by the Snowbirds. And it’s chasing them down, right on their tail, like the venomous hornet that it is, imposing its presence on those little planes that are, (sing it) turning into butterflies above our nation.

With a loud roar, they disappear, off to our left. But we’re not fooled, we watch the skies. We know they’ll be back.

And so they are, soaring in overhead. The Hornet’s absent now–hunting other prey?–and the Snowbirds make a long lazy arc right in front of us. Glorious, oh so glorious.

Oh look! The Governor General is here! He arrives in style, in a horse-drawn carriage. And then an elder appears. He performs an Indigenous, spiritual ceremony—a smudging—that sees the PM and other invited dignitaries take part in a purifying, cleansing smoke bath. And my mind drifts back on that one time I was fortunate enough to experience the very same thing. A smudging is a truly touching ceremony.

And then a cannon fires, frightening the crowd. A salute! Twenty-one guns? I don’t know, but there were many. And then the anthem is sung. And once again the crowd roars. And, one more time, the Snowbirds swoop in. They arrive from over the Peace Tower this time, and then up, straight up, into the sky. And then they break off, each one falling away, backward, as though gravity told them, no more.



Then they hightail it out of there, screaming across the sky, disappearing for good.

Everyone’s thrilled. Everyone’s happy. Everyone, in their own way, is having a good time.

And that European’s question stays with me still. Look it, I finally decide, maybe there’s no need to define a Canadian. Maybe there’s no need to mandate what makes a Canadian a Canadian. Because, I decide, looking out at the throng on Parliament Hill, maybe it actually is—like so many, including Trudeau père, had always suggested—maybe it is a mosaic thing. Maybe there’s a piece of Canada inside each of us. And inside each of us, that piece is just a little bit different. Maybe we all interpret that piece differently, we all perceive it in our own unique way.


And when we come together, on a day like this, we all make our contribution, join our unique piece to everyone else’s. And together, in our own way, we make a nation.

Is that how it all works? Who knows? It’s good enough for me though.

And besides, it’s Canada Day, it’s sunny, and it’s hot.

“C’mon,” Someone suggests, “Let’s go get a beer.”

Pay Me Now, Or Pay Me (A Whole Bunch More) Later

CurrencyTo the casual observer, our friends over at the Canada Revenue Agency (CRA) sometimes make head-scratching policy decisions. Just one example of CRA’s puzzling policy deals with deadlines for small business corporations. Were one to look it up, one would discover that a small corporation has six months from fiscal year-end to file a corporate tax return. So you’d probably understand how a business owner would automatically put that year-end task on the back-burner. And you’d also excuse her or him for thinking that they’ve got CRA covered, as long as the tax return is filed within six months.

Imagine their surprise then when CRA’s assessment includes an interest charge. Why is there interest if the tax return is filed on time? Because there’s a second component to that “six-month” rule. An important clause that says; even though the return is due six months after year-end, the actual tax is payable within no more than three months. So, our fictitious business owner isn’t onside at all. Yes, the tax return was filed on time, but the tax payment was late. Hence the interest charge.

Yeah, I know head-scratching.

To make matters worse, if that same business owner owes more than $3,000 in income tax (or HST for that matter), then CRA further requires the corporation to estimate and remit, every three months, an amount owing for next year’s tax too. Those prepayments are called quarterly instalments and if the business owner forgets to pay up, and if there is tax due next year, then CRA will once again assess an interest charge.

And what’s even more head-scratching for most business owners is that CRA won’t automatically send out a notice, or a reminder, that those instalments are due. In other words, the onus is on the business owner to verify, calculate and remit payments as required, and at the right time.

And, given that most business owners are much too busy thinking about other things; sales & marketing, product development, staffing, overhead and expenses (you know, the not-so-mundane stuff), it’s not uncommon to see an HST or income tax instalment go unpaid. Or sometimes get overpaid.

What this all mean is, in today’s increasingly complex world, business owners need more than a once-a-year-accountant. They need someone who will keep track of these things. Someone who will keep them onside, and on the right side of the tax and instalment game. In today’s world, business owners need an on-going relationship and a reliable service from a trusted advisor.

And we’ve got just such a service. One that we’re calling Concierge. And with our concierge offering, among all the other services it offers, it also makes sure that you pay CRA the right amount right now. Rather than a whole bunch more later.