You’ve Got to Go

It’s mere days away. But it’s not too late to register. QuickBooks Connect. Downtown Toronto. Dec three-to-five.

You’ve got to go.

Why? If you’re a number-cruncher. A tax preparer. An IT type. If you have clients that rely on you. Then you need to be at QuickBooks Connect.

Our profession is changing. It’s transforming. Listen, I’ve been at this game more than twenty-five years. And never, never, have I seen our profession evolve. Never like it has in these last two, maybe three, years.  You’re a seasoned pro? You remember the dawn of the PC age? Think that was big? That’s nothing compared to today.

The dust has settled. Cloud is in. Cloud won.

The way we deal with data. The way we interact with clients. The tools we use. Our internal practice-management tools. Our client tools. Communication. On-boarding. Payment, Billing. It’s all changed.

You still keeping timesheets? You still using cheques? You still have legacy desktop software? Backups and software-versions? Well, that’s why you need to be at QuickBooks Connect.

Times have changed. Time are changing. You need–we all need–to keep up. Or get left behind.

QuickBooks Connect. You’ve got to go.

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.

What a Dumb Accountant Learned About Branding

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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.

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.

Pursuing Passion

 

“When are you getting laid off?”

“Well… if all goes well, it’ll be at the end of the month!”

It’s not often you’ll run into someone who wants to lose their job. And yet, at the moment, I’m working with a dynamic, energetic young woman who want to do exactly that.

Why does she want to lose her job?

Because she works for a large monolithic organization that offers job security, a six-figure income, and an incredible array of employee benefits.

Oh, there’s one other thing the job offers, at least for my client. Boredom.

Yes, after all too many years in a bureaucratic, inflexible office, my client is making the jump. She’s jumping from a strict, structured and formalized work environment to the fast-paced, think-for-yourself world of entrepreneurship.

Everybody’s telling her she’s crazy, too. Maybe you think so as well. After all, leaving a cocooned, protected and well-paid position is not something that most of us are ready to do.  And as we’ve worked together these past few weeks, preparing cash flow, and revenue and expense forecasts, we’ve had many philosophical discussions about business and money and success.

I’ll admit that, more than once, I asked her if she was sure that she wanted to do this.

Her answer is always the same. With a sparkle in her eyes, and all the energy she can muster, she tells me, “I have to do it. It’s my passion. If I don’t do this, I’ll regret it for the rest of my life.”

Just yesterday, driving back from our meeting, it dawned on me. She’s living the life that the protagonist in my philosophical novel oh-so-desperately wants to live.

And for that, I salute her.