Category Archives: bookkeeping

Future World of a Bookkeeper at Work and Play

The Bookkeeper’s AdvocateR

Bookkeepers in the past have been reactive. We waited for our clients to tell us what needed to be done.  The customer either dropped off a shoebox of receipts and documents for us to process or we showed up at their office to an in-box that was full. We hounded them for the information we needed to file their government compliance requirements and waited patiently for it to appear. We worked well into the night to make sure they stayed out of trouble and didn’t payout all the profits in penalties and interest.

We, professional bookkeepers, transform the bottom line of small business every day, yet are rewarded not by the value our work produces but by the number of hours we bill. The number of keystrokes we do are counted in the time it takes, not for the value in the financial information it gathers. Typing faster makes us less money.

That is in the past now, the inbox is almost gone for good. No more data entry, No more waiting for the client, No more shoebox, No more tracking our time.

WE ARE FREE!!…………………………………………………………………….. TO DO WHAT!?!

To do what we have always done, reclassify entries, analyze the numbers, spot trends, and of course, be compliant.

While small business owners recognize that new technology will make a difference in the success and growth of their company, it is confusing about how and what to implement. The job of a good advisor is to stay ahead of the customer.  Improve processes, reduce cost, and manage risk by helping to recommend what should be done, not stand by waiting to be told what to do. Understanding your customer’s technology options will be critical moving forward.

We will help build systems that integrate technology options for daily record keeping, processing, capital planning, cash flow forecasting and internal controls. We will monitor the validity of procedures like payroll and inventory control. We will help implement new work flows and document storage systems. The methods that we use to convert operational results to financial information will change and the result will be improved financial information for our customers.

As more small business make the switch to cloud based solutions, those bookkeepers that position themselves as leaders will thrive in this new world. Real time professional bookkeepers who understand the platforms ahead of us will come out on top.

Stop billing by the hour. Clients that used to take four hours per month to complete monthly books will now take two. Charge your customers an amount equal to the value they receive and go play with the other two hours! Get away from your desk and enjoy some work life balance or spend the time learning all about the next dashboard tool. Technology is allowing us to combine work and play. Work from anywhere, process transactions on a tablet or smartphone while attending an industry conference for example.

Get on board to educate yourselves, be better prepared for the future and understand the benefits and shortfalls unique to each customer and this will make you the professional record-keeper of the future.

Act like a servant! No not I, said the Professional Bookkeeper.


Dianne Mueller CPB – The Bookkeeper’s AdvocateR

Chair of the IPBC Board of Directors

“Trademark owned by The Institute of Professional Bookkeepers of Canada – used under license.”

How to Handle early-payment discounts and late-payment surcharges with your Customers

If you offer an early-payment discount on credit sales, you have to charge GST/HST on the full invoice amount even if your customer takes the discount.


You operate a business in Manitoba and the invoice shows the price of goods as $100 plus $5 GST. The credit terms of the invoice give the customer a 2% discount if the customer pays within 10 days. GST is $5, even if your customer takes the discount. The customer pays $103 [$100 plus $5 GST minus $2 (2% of $100) early payment discount].

If you charge late-payment surcharges, you do not charge GST/HST on the surcharge. GST/HST is payable only on the original invoiced amount.


If you charge $5 for the late payment on goods invoiced at $100, GST does not apply to the late charge. Therefore, GST is still $5 and the customer pays $110 ($100 plus $5 GST plus $5 late charge).

When you invoice an amount that is already net of the early payment discount, charge GST/HST on the invoiced amount.


You send a customer an invoice with instructions to pay $108 if payment is made by March 23, or to pay $118 if payment is made after March 23. You charge GST/HST on the reduced invoiced amount of $108, even if the customer makes the payment after the March 23 due date.

My Tips & Tricks when using the Multiple Warehouse tracking tool in Sage 50 Canadian Edition.

Sage 50 Canadian Edition allows small businesses to keep track of inventory stored at more than one location, for example at home in the basement or at different store locations.

Some business will have regional warehouses to cut back on shipping and or importing exporting cost. It can be very helpful to know what inventory is where to expedite deliveries, shipping and re-ordering of goods.

Drop shipments become manageable by creating a supplier as one of your warehouse locations which then allows you to ship direct from factory to customer.  Transferring between locations can also be done using the Inventory Adjustments & Transfers window. This fantastic feature is in the Premium and Quantum versions of the software.

Be careful with this powerful feature, once a location gets used in a transaction, it cannot be removed or made inactive. Locations cannot be turned off. If you want to edit location codes, be sure to do so before performing any transactions. You can set up as many as 100 locations.

To turn on: Go to the Inventory & Services Settings – Locations
The Product Analysis report is found off the reports menu on the home screen. Go down to Forecast & Analysis and then Analysis and click on Product Analysis. Depending on your selections in this window you will be able to return valuable detailed information on your inventory by warehouse location.

Dianne Mueller

Certified Sage 50 Trainer

Soma Small Business Solutions

Didn’t think I’d need a bookkeeper….maybe I do. If only I had time to find one.

The title of this blog was taken directly from an email conversation between a mentor and a start-up business owner. This new entrepreneur knew it was essential to seek out a professional mentor that had, as he put it, done this many times before. In this particular email he had two questions for his mentor.

  1. Do you actually charge interest on overdue invoices? 
    1. Sometimes I charge interest.  I expect that you have been phoning and nagging at least weekly.  If not, you must.


  2.   I’ve got a student who has agreed to help me out part time – she’s perfect in that she has great skills and is super flexible.  Only we haven’t come to any terms about her employment/contract/whatever.  I think the easiest thing for me to do is to sub-contract her, but I’m not sure if there are any pitfalls to this idea.  
    1. It is my understanding from my bookkeeper that if you hire someone on contract and they do not have other sources of income you may be declared their employer and have to pay Payroll Source Deductions retroactively.  If you hire them as an employee, you have to pay Payroll Source Deductions monthly for the previous month’s pays. 


  1. Do you have a book keeper?

    1. Didn’t think I’d need a bookkeeper….maybe I do. If only I had time to find one.


  2. You do need a book-keeper. 

This mentor had learned from building a successful business a bookkeeper was needed. Answers to these questions are possible through outsourcing to a professional bookkeeper and implementing a computerized bookkeeping system. It is imperative to invest a little of that start up money on quality and accurate bookkeeping records.

You’ll be on top of the game and the competition with a simple click of a button or a phone call to your bookkeeper. Your financial statement and month end reports fulfill the checklist of a well managed company for all stakeholders. The institute of Professional Bookkeepers of Canada is a great resource to help you find a qualified bookkeeper.

Monitoring the progress of your business from the beginning stages is critical for new businesses to grow and you need to prepare a cash flow plan. A professional bookkeeper can help you prepare budgets, cash flow plans and a break-even analysis by looking at your projections of revenue over variable and fixed costs.

With accurate bookkeeping you will be able to check on progress such as increased profitability tracking, accounts receivable monitoring, and controlling expenses. How does the data compare with your projections? Are you on track or falling behind?

Clean tax records will keep you and your business in good standing with your banker, investor and Canada Revenue Agency.

Your bookkeeper and accounting software will provide monthly financial statements and reports that provide a precise road map of which direction to take your business in the future. No more sleepless nights wondering if you have made the right decisions. You will feel confident with the numbers to back you up. Start focusing on what matters and hire a professional bookkeeper today. The rest will follow!


Dianne Mueller CPB

Soma Small Business Solutions


Here Is A Checklist For Self Employed Owners Working on Their Tax Return This Weekend.

The end of the year is here for self- employed small business owners. (Sole Proprietors) A sole proprietor is a type of business entity that is owned by one individual and where there is no legal distinction between the owner and the business. The owner receives all profits and is responsible for all debts. The yearend profits of the business are combined with all other income that an individual might have and taxes are paid at the current personal tax rate.

Sole proprietors often feel overwhelmed, confused and nervous about preparing for their yearly tax filing; especially those new entrepreneurs that do not have a business or accounting background.

Your business year ends on December 31st each year and steps need to be taken to ensure you are not overpaying or underpaying the tax man. It starts with making sure your bookkeeping is done and up to date. Here is a checklist of task that should be completed every year.

End of Year Bookkeeping Checklist:

  • Reconcile Your Bank Account. This will make sure that an expense or deposit (sale) is not missing. Don’t forget about those monthly bank fees.
  • Catch Up On Invoices. Do you have work or product that you have completed but not invoiced for yet?
  • Record Transactions. – Have you imported or posted into your accounting system all transaction from your bank accounts, PayPal accounts, and credit card accounts. Search your pockets for receipts missed.
  • Personal Expenses. – are you missing any income or expense transaction related to the business that were deposited or paid from your personal bank account.
  • Categorize Expenses. – Make sure all of your income and expenses have been properly categorized to the correct business expense account.
  • Don’t Forget Mileage. – Have you recorded all the time spent in the car? Your daily commute doesn’t count.
  • Don’t Forget Home Office Expense Allowances. If you are operating your business from your home you may be entitled to expense a portion of your mortgage interest and utilities. Check with your accounting professional for your percentage.
  • Pay Your Estimated Taxes. Your tax return must be filed by June 15th of the following year. If you owe taxes and to avoid penalties be sure you’ve paid enough in estimated taxes for the year. If you need to make an additional instalment do it before April 30.

  • Check your Income Statement. Compared to prior years. Review for posting errors any amounts that have increased or decreased significantly.
  • Don’t forget to reverse stale dated cheques! 6 months from date of issue.
  • Record any year end accrual entries –and depreciation if applicable.
  • Check Accounts Receivable and Accounts Payable for accuracy.
  • Bad debt write offs, if any. (and hopefully there aren’t!)
  • Prepare A Budget for Next Year. To start creating a new budget take your profit and loss statement in your accounting software from this year and export it to an spreadsheet, and then you can easily add formulas to increase revenue next year by a percentage or reduce some of your expenses.
  • Do a review of your current insurance coverage. Life, business and equipment insurance, Is it adequate.

Armed with this checklist and the help of your accounting professional your year end will go much smoother. Your business books will be error free and your tax return will be accurate.

Soma Small Business Solutions

Dianne Mueller CPB – Certified Professional Bookkeeper
Institute of Professional Bookkeepers of Canada, Chair

Sage 50 Certified Instructor

The Keys to Unlocking your Business Profits & Growth in Sage 50–Canadian Edition

You know it is important to lower taxes and increase profits. You also know that it is imperative that you have enough money in the bank to pay the bills, but do you know how to access vital information and the Key Performance Indexes to measure your business progress in Sage 50–Canadian Edition?

Let’s start with the Income Statement and Balance Sheet found in the report center on the home page.

The Income Statement indicates:

  • Which expenses are paying you back and should be increased.
  • Which expenses should be cut back or eliminated.
  • Which products are profitable and which are not.

The Balance Sheet indicates:

  • What your business owns – Assets
  • What you business owes – Liabilities (or financial obligation)
  • Shareholder or Owners Equity – ROI (return on investment)

They also provide Key Comparisons information like:

  • Last month vs. current month.
  • Last quarter vs. current quarter.
  • Year to date. Year to date by month.
  • Current month to same month last year.
  • Current quarter to same quarter last year.

Combining these two statement numbers will indicate important ratios you can use to manage your success.

Increase your profits by utilizing the Business Performance Monitoring feature:

The key financial ratios of liquidity, efficiency, operating, financing and profitability are all at your finger tips in Sage 50–Canadian Edition. The software provides a detailed performance measurement explanation and graph to help you analyze the information in an easy to understand format.

You will find this Key Business Performance information in the Daily Business Manager under the Business Assistant Menu on the home page. Click on the radio button indicating Business Performance. To get a complete list of all ratios available go to the view menu and chose options. You are able to add any that do not appear on the main page to your customizable list. (See screen shots below)

It is important to know your strengths and weaknesses, manage spending and credit. Have money when you need it. These are all important ratios that Sage 50 helps you to reach and manage greater success.

Dianne Mueller CPB

Certified Sage Trainer

Soma Small Business Solutions