How to keep your bookkeeper happy (and save some money in the process)

The ever-friendly, ever-fiesty MRSB Bookkeeping & Reporting team gives you some pointers on how you can help keep the client/bookkeeper relationship running extra smoothly, for everyone's benefit.

As bookkeepers, our goal is to provide you with useful, timely information about your business so that you are free to fulfill the important role of managing and growing your company. In short, we like to make your job easier! We realize that sometimes, though, it can sort of feel like you're working for us. So to keep everything running smoothly in the owner/bookkeeper relationship (and to back up our claim that we don't ask for anything we don't need - really!), here are several things you can do to make us happy, thus having more time for what's important to you:

  • If you have time to organize your papers before we see them, great! When they are sorted by sales, purchases, statements, even suppliers, that makes it easier for us and saves time.
  • Designate one place to keep your documents. Set up a box or file and use it. This works both when we come to your office and when you bring your files to us, and will eliminate searching for that important paper.
  • Open your mail! Did you know it is a federal offence to open someone else's mail? Don't make us do it! Seriously, though, there may be time-sensitive information or even a cheque in that envelope. 

  • It is a good idea for owners to review bank and credit card statements. There may be charges that are not business related that we may not recognize. It is also a chance to catch errors or unauthorized transactions.
  • Not all deposits are revenue. You may have made an owner's contribution or deposited a rebate from a supplier. Please provide us with your bank book or copies of the deposit slips.
  • Online banking is your friend, and ours. Have your bank set up access for you and if you are comfortable with the idea, for us as well. This saves an enormous amount of time. If you are not ok with providing us access, you can still go online and print out your statements for us long before you would receive them by mail.

  • We are all about the details. Fill out those check stubs: dates, amounts, payee and description are all important. For unusual purchases, provide an explanation. When we ask for more information it isn't just because we are curious!
  • When you receive financing, make sure we get a copy of all the loan details: interest rate, term, breakdown of payments.
  • If you have employees, we need to know more than just their names (although last names are especially handy). Most important is their SIN, date of birth, completed TD1, wage, benefits, vacation and any other entitlements.
  • If at all possible, bring documents to us up to two weeks in advance of the deadline. While we strive to make you feel like you are our one and only, we do have other clients (you are our favourite, of course).

Ultimately, these steps will enable us to process your information more easily and therefore cut down on the time it takes to do the work. This translates into savings for you on your bill (yeah!). It also saves you time by eliminating unnecessary phone calls between us and keeps everyone smiling. As a final note, if you are looking for a Christmas gift idea for your bookkeeper, we like wine and that order.


Tips on negotiating the fairest price when buying a business

Contributor: Wayne Carew, Principal & Senior Advisor with MRSB Mergers & Acquisitions

If you are new to the world of business buying, there are undoubtedly some questions running through your mind. Assuming you have some idea as to the type of business you want to purchase, you might be wondering how you will know whether you are paying the fairest price for your new venture, and how much help you may need in the process. Here are a few questions to ask yourself that should help ensure you will get the fairest deal when it comes time to make or accept an offer.

 Has the seller done a complete business valuation?

One challenge that commonly arises during the acquisition process is knowing whether the person you are thinking of buying from has had his or her business valuated by a financial professional. A proper valuation should tell the seller what their business is ‘really’ worth, leaving emotion out of the equation. It’s natural for a long-time owner to assign a number to their business based partially on the years of work they’ve put in to make it successful, but a valuator will look at the nitty gritty, suggesting a price that is fair to both seller and buyer. A mergers & acquisitions professional also understands the difference between selling a business and real estate, where you might initially ask $250,000 on a $200,000 home, hoping for a bigger payout. It’s not as easy for a seller to go back on their first price when selling a business, so the true value should be understood and accepted from the start.

Could you benefit from a vendor take-back?

It might sound like negative terminology, but a vendor take-back can actually benefit you as a buyer. This happens when the seller (vendor) provides the buyer with some of the financing for purchasing the business as part of their equity. This is often required by lenders in order to get approved. Of course, the amount of VTB depends on how motivated the seller is and his or her willingness to continue tying personal capital to the business.

How long do you want the current owner to play a role in the company?

It can often be beneficial to have the selling owner stick around for awhile, providing administrative or operations-related guidance and lending their trusted name to the brand as it undergoes its transition. Part of the price you are being asked to pay will be for what we in the business call ‘intellectual capital’, the knowledge that will be shared by the person or people who have managed the business until now. It is possible to negotiate on this element depending on how quickly you feel you can completely take the reins.

Do you have a full understanding of ‘hidden’ costs?

One of the benefits of eliciting the services of a broker or other buying and selling professional is that they take a fine-toothed comb to the business, uncovering any small expenses that might be affecting its market value. Travel costs, golf club fees and any other non-business expenses will be looked at by your broker and included in the equation that will lead to a fair purchase price for you.

There is obviously more to the process of buying a business than what’s mentioned above; it is an important decision that can set an exciting path for your future if undertaken with the right outlook and preparation. If you have questions around any aspect of buying or selling a business, please get in touch with a member of our Mergers & Acquisitions team.

Make the most of your charitable donations

John Connolly, Senior Tax Manager with MRSB Tax Services, provides some useful tips on maximizing your tax benefits when making charitable donations

Many of us are already familiar with the tax benefit of making donations. Your first $200 in donations earns you a tax credit based on the lowest personal tax rate. For donations in excess of $200 you receive a tax credit based on the highest personal tax rate. On Prince Edward Island this is 24.8% on the first $200 and 45.7% on everything over $200. If you donate $200, your taxes are reduced by $50. If you donate $400, your taxes are reduced by $141.

These are the basic rules. If you are willing to put in a bit more effort, here are some ways that you can boost your tax benefit through annual donations.

Delay your donation claim

The tax credit for donations is optional, and unclaimed donations can be carried forward up to five years. If you donate $200 or less each year, you may want to consider delaying your donation tax credit claim to take advantage of the higher tax credit on donations over $200 in a future year. For example, if you donate $200 per year and claim the tax credit every year, then you would save a total of $298 over six years. If you donated the same amount but claimed your donation tax credit every second year, you would save a total of $423 over six years - $125 extra in your pocket! If you carry forward your first five years of donations and claim all $1,200 in year six, you would save $507 ($209 more than if you claimed the credit every year), but you have to wait six years to receive the additional savings.

Be a first time donor

As of 2013 there is a new tax credit that will save a 'first time donor' up to $250 more in tax. You are a first time donor if you (and your spouse or common-law partner if you have one) have not claimed a donation tax credit since 2007. The new tax credit is 25% of up to $1,000 in cash donations. If you don't have $1,000 to take full advantage of the credit in one year, you can carry your donations forward as the credit can be claimed on up to five years of donations. For example, if you are a first time donor who gives $200 per year and claims the donation credit each year, you get an extra $50 tax savings the first year and no extra credit the other years. Conversely, if you wait and claim five years of donations at once, you will get $250 back. The four year delay would save you $367 in additional tax ($200 from this credit and $167 from the higher rate on donations over $200). Keep in mind that this temporary tax credit ends after 2017, so donations that qualify shouldn't be carried forward beyond your 2017 tax return.

Donate your shares

If you have unrealized capital gain in a stock market investment you can use it to increase your donations tax credit. Instead of donating cash to your registered charity of choice, you can make a donation of shares of the same value as the amount that you planned to donate in cash. You get a cash receipt for the value of the shares and the capital gain on the shares is not taxed. If your income is in the top tax bracket and you donate shares with a $1,000 accrued gain, then you save an additional $237 of tax because that capital gain is not taxed. The tax savings of this strategy should be compared to the cost of any fees your broker charges for transferring your shares to a charity.

If you have any questions about the tax benefits of charitable giving or other tax matters, contact a member of the MRSB Tax Services team.