Category Archives: Bookkeeping Tips

Choosing an Accountant

Whether you do your own bookkeeping, or enlist the help of an administrative assistant or bookkeeper, as your business grows, you may decide to hire an accountant.

Accountants can help with more complex financial issues such as long-term tax planning, business planning or deciding whether or not to incorporate. Many business owners prefer the security of having a designated accountant file their year-end tax returns.

Choosing an accountant is an important decision. Here are some pointers to help you choose who to work with.

The big picture

First off, decide what you need. Do you want to go with a big firm, or do you prefer the feel of a small one? Do you need monthly or quarterly bookkeeping, or just year-end services? Do you need financial planning support?

Ask around

Ask other business owners who they recommend. Bookkeepers often can make solid recommendations as we tend to work with various accountants.

Interview prospects

Don’t just take other people’s word for it. Meet potential accountants in person to discuss what they offer and what you need. Don’t be shy to interview a few different candidates. It is a personal relationship and you need to be sure you can communicate clearly with your accountant.

Be prepared

When you meet an accountant, have a list of questions prepared.

Ask about his/her education.

How much do they charge?

What is his/her experience with your type of business?

What type of software are they using?

How often do they usually meet with their clients?

Being clear about your expectations will help you both decide if you will work well together.

Best of luck!

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Employment insurance for the self-employed

I was asked recently about claiming Employment Insurance (EI)benefits as a self-employed person. Here are the basics of what I understand about how to apply, how much you will have to pay and under what conditions you can claim benefits.

Since January 2011 in BC, self-employed people can access EI special benefits. These special benefits are described as maternity benefits, parental benefits, sickness benefits and compassionate care benefits.

How to apply?

In order to be eligible for EI benefits as a self-employed person, you first have to register with the Canada Employment Insurance Commission, applying online with a My Service Canada Account. Then you must wait 12 months.

NB. There are some people who are not eligible to apply for these benefits, so contact Service Canada to confirm eligibility.

 How much will you pay?

Your EI premiums will be calculated based on your income tax and benefit return for the year in which you apply. For example, if you register in 2012 , your EI premiums will be calculated based on your 2012 income tax and benefit return and will be payable by April 30, 2013.

Regardless of when you register during a given year, EI premiums are payable based on your self-employed income for the entire year. See calculation of premiums page for more information.

How can you claim?

(From the Service Canada website ) After 12 months a self-employed person can claim these special benefits if:

You have reduced the amount of time devoted to your business by more than 40% because:

    • your child was born,
    • you are caring for your newborn or adopted child or children,
    • you are ill, injured, or in quarantine, or
    • you need to provide care or support to a gravely ill family member.

AND you have earned a minimum amount of self-employed earnings during the calendar year preceding the year you submit a claim. This amount may change from year to year. If you want to apply for benefits in 2012, for example, you would need to earn at least $6,222 in 2011.

AND

  • for compassionate care benefit claims – you have provided medical proof showing that a gravely ill family member who is at risk of dying within 26 weeks needs your care or support,
  • for EI sickness claims – you have provided a medical certificate as proof that you are unable to work because of illness, injury, or quarantine,
  • for EI maternity or parental benefit claims – you have provided the expected date of birth of the child and the actual birth date once it has occurred, or the official placement date in the case of adoption.

If you are self-employed and an insured employee, you can choose whether to apply for EI special benefits either as a self-employed person or as an employee. See amount of weekly benefits page for more information.