Joe Ruscio Professional Corporation https://jrpc.ca Accounting is the language of the practical business life Tue, 23 Jun 2020 19:53:08 +0000 en-CA hourly 1 https://wordpress.org/?v=5.5.3 https://jrpc.ca/wp-content/uploads/2016/09/FS-LOGO-Favicon-1.0-80x80.png Joe Ruscio Professional Corporation https://jrpc.ca 32 32 COVID-19 Update https://jrpc.ca/covid-19-update/ Thu, 09 Apr 2020 20:33:52 +0000 http://jrpc.ca/?p=653 The JRPC office is now open our regular hours. We thank you for your patience during these times. For everyone’s safety and in accordance with Algoma Public Health guidelines, we have implemented certain procedures for social distancing including allowing only 4 clients in the reception area at a time.

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The JRPC office is now open our regular hours. We thank you for your patience during these times. For everyone’s safety and in accordance with Algoma Public Health guidelines, we have implemented certain procedures for social distancing including allowing only 4 clients in the reception area at a time.

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Here are 5 great tips for new entrepreneurs https://jrpc.ca/hello-world/ Thu, 08 Sep 2016 16:25:35 +0000 http://jrpc.caveraprojects.com/?p=1 Many entrepreneurs fail to put a number to the money they expect to make. Financial projections are an essential tool to help guide your business along a healthy growth path, and they imply a commitment to meet targets.

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A few more tips can help even numbers-challenged newbies propel their business to success.

SEPARATE BUSINESS AND PERSONAL EXPENSES

Most new entrepreneurs merge their play money with their professional money when they start off. That can lead to a lot of confusion down the road when you’re dealing with a higher volume of cash. Suddenly, sorting through expense statements becomes a time suck. The easiest thing to do is be consistent from the get-go: use one bank account for business transactions and a separate one for personal spending.

INVEST IN ACCOUNTING SOFTWARE

Accounting software like QuickBooks or FreshBooks helps small business owners track revenue and expenses, invoices and receipts, vendor and employee lists, all with the optional accompaniment of neat, colourful labels. Transaction sheets can even be uploaded straight from your bank accounts. Far superior to Excel, software like this helps you see what your company makes and spends at a glance, and it’s beneficial for determining your business outlook and tax obligations. Plus, your accountant will be majorly impressed.

MAKE FINANCIAL PROJECTIONS

Many entrepreneurs fail to put a number to the money they expect to make. Financial projections are an essential tool to help guide your business along a healthy growth path, and they imply a commitment to meet targets. “Entrepreneurs should have a projected income every year, up to a five-year forecast with a minimum of three years,” says Garbens, adding that income statements and budgets detailing things like staffing plans and equipment expenditures should also be included.

PAY YOURSELF FIRST

A recent survey by BMO Wealth Institute found that 60% of Canadian entrepreneurs are concerned about their ability to retire on their savings. Most overlook the importance of setting aside money for the future so they can focus on more immediate needs like paying debts and funding their business. Garbens says this shortsighted planning will haunt entrepreneurs not only during retirement, but also at tax time and other times when unforeseen expenses arise. As soon as the money starts rolling in, be boring and put some of it into a registered savings account.

HIRE A BOOKKEEPER

According to a recent Sage survey, only 23% of new businesses were likely to hire an accountant. Sure, accountants cost on average of $50 an hour, but they can save you money by organizing your cash flow and finding extra tax shelters. They can even propel business growth by interpreting your numbers for growth and profitability opportunities. “If you’re a numbers person and you like dealing with that stuff, you’re probably okay DIYing,” says Garbens. “But when you’re hopelessly lost, admit defeat.”

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Financial Planning Checklist https://jrpc.ca/financial-planning-checklist/ Wed, 24 Feb 2016 21:16:23 +0000 http://demo.djmimi.net/themes/account/?p=1 From CIM, to CFA, to TEP and even RHU, there’s a dizzying array of letters signifying credentials for financial professionals. But experts say the two types that most consumers should look for are either CFP or RFP.

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Financial planning checklist

Here are five basic things that can help you evaluate a potential financial adviser.

1. Plan ahead: The first step is often to decide what sort of financial strategy you need. Are you a saver? A buy-and-hold investor? Are you willing to roll the dice a little? Picking an adviser who is among the best in long-term thinking might not be ideally suited for your daytrading needs, for example. So figure out what your ultimate goal is, and work with someone who can demonstrate that they’ve got the expertise to help you reach that goal.

2. Ask around: Friends and family can be a great first step to finding a reliable source of financial advice. Ask around and see if anyone in your circle has an adviser they’d recommend, or tips to share. Hearing about a bad experience and what went wrong can hone your decision-making skills and help you figure out what questions to ask a potential adviser when sounding them out.

3. Get personal: Whatever you do, make sure you meet with the person face to face before making any sort of arrangement. Remember, the adviser is going to need to have very intimate knowledge of your finances, personal activities and goals, and you must be comfortable providing them with that information.

4. Follow the money: There are a number of ways that advisers get paid, and it pays (literally) to know which method yours uses. The most common is the commission-based model where the adviser gets paid a fee by the financial companies that make the products he or she sells. That’s great in principle (since the customer never has to pay directly for the service), but critics point out that it poses an inherent conflict of interest. Certain financial products pay higher commissions than others, which gives the adviser a higher incentive to move you in that direction – whether it’s a good idea for your financial plan or not. That’s led a movement toward other types of payment plans, where compensation is more up front.

Higher net worth clients often like the asset-based model, where you pay an adviser a certain percentage of your entire portfolio, so the payment grows as the portfolio grows. That gives both parties an incentive to make the portfolio increase in value.

Smaller investors might like a simple fee-based planner that charges by the hour. The cost shouldn’t be much more than about $100 or so an hour, and less and less time will likely be needed once the financial plan has been worked out and set up — perhaps nothing more than a checkup here and there throughout the year.

5. Beware the alphabet soup: From CIM, to CFA, to TEP and even RHU, there’s a dizzying array of letters signifying credentials for financial professionals. But experts say the two types that most consumers should look for are either CFP or RFP. Those stand for certified financial planner and registered financial planner. The latter is generally for more advanced investors, but they share the common trait of not actually selling any financial products. A good financial planner’s role is to guide your savings and investment strategy, not sell you individual products.

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Bigger Organization With Mutual Funds https://jrpc.ca/bigger-organization-with-mutual-funds/ Wed, 27 Jan 2016 14:09:49 +0000 http://demo.djmimi.net/themes/account/?p=229 A mutual fund is a investment fund that pools money from many investors to purchase securities. Mutual fund it is most commonly applied only to those collective investment vehicles that are regulated and sold to the general public.

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A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. While there is no legal definition of the term “mutual fund”, it is most commonly applied only to those collective investment vehicles that are regulated and sold to the general public. They are sometimes referred to as “investment companies” or “registered investment companies”. Hedge funds are not mutual funds, primarily because they cannot be sold to the general public.

In the United States, mutual funds must be registered with the U.S. Securities and Exchange Commission, overseen by a board of directors or board of trustees, and managed by a Registered Investment Advisor. Mutual funds are subject to an extensive and detailed regulatory regime set forth in Investment Company Act of 1940. Mutual funds are not taxed on their income and profits if they comply with certain requirements under the U.S. Internal Revenue Code.

Mutual funds have both advantages and disadvantages compared to direct investing in individual securities. Today they play an important role in household finances, most notably in retirement planning.

There are three types of U.S. mutual funds—open-end funds, unit investment trusts, and closed-end funds. The most common type, open-end funds, must be willing to buy back shares from investors every business day. Exchange-traded funds (ETFs) are open-end funds or unit investment trusts that trade on an exchange. Non-exchange-traded open-end funds are most common, but ETFs have been gaining in popularity.

Mutual funds are generally classified by their principal investments. The four main categories of funds are money market funds, bond or fixed income funds, stock or equity funds, and hybrid funds. Funds may also be categorized as index (or passively managed) or actively managed.

Investors in a mutual fund pay the fund’s expenses, which reduce the fund’s returns and performance. There is controversy about the level of these expenses.

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Real Estate Investments https://jrpc.ca/real-estate-investments/ Sun, 27 Dec 2015 14:14:55 +0000 http://demo.djmimi.net/themes/account/?p=233 Real estate markets in most countries are not as organized or efficient as markets for other, more liquid investment instruments since individual properties are unique to themselves and not directly interchangeable.

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Real estate markets in most countries are not as organized or efficient as markets for other, more liquid investment instruments. Individual properties are unique to themselves and not directly interchangeable, which presents a major challenge to an investor seeking to evaluate prices and investment opportunities. For this reason, locating properties in which to invest can involve substantial work and competition among investors to purchase individual properties may be highly variable depending on knowledge of availability. Information asymmetries are commonplace in real estate markets. This increases transactional risk, but also provides many opportunities for investors to obtain properties at bargain prices. Real estate entrepreneurs typically use a variety of appraisal techniques to determine the value of properties prior to purchase.

Typical sources of investment properties include:

  • Market listings (through a Multiple Listing Service or Commercial Information Exchange)
  • Real estate agents and Real estate brokers
  • Banks (such as bank real estate owned departments for REO’s and short sales)
  • Government entities (such as Fannie Mae, Freddie Mac and other government agencies)
  • Public auction (foreclosure sales, estate sales, etc.)
  • Private sales (transactions for sale by owner For sale by owner)
  • Real estate wholesalers and investors (flipping)

Once an investment property has been located, and preliminary due diligence (investigation and verification of the condition and status of the property) completed, the investor will have to negotiate a sale price and sale terms with the seller, then execute a contract for sale. Most investors employ real estate agents and real estate attorneys to assist with the acquisition process, as it can be quite complex and improperly executed transactions can be very costly. During the acquisition of a property, an investor will typically make a formal offer to buy including payment of “earnest money” to the seller at the start of negotiation to reserve the investor’s rights to complete the transaction if price and terms can be satisfactorily negotiated. This earnest money may or may not be refundable, and is considered to be a signal of the seriousness of the investor’s intent to purchase. The terms of the offer will also usually include a number of contingencies which allow the investor time to complete due diligence, inspect the property and obtain financing among other requirements prior to final purchase. Within the contingency period, the investor usually has the right to rescind the offer with no penalty and obtain a refund of earnest money deposits. Once contingencies have expired, rescinding the offer will usually require forfeiture of the earnest money deposits and may involve other penalties as well.

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Think Of Your Future https://jrpc.ca/think-of-your-future/ Fri, 27 Nov 2015 14:16:10 +0000 http://demo.djmimi.net/themes/account/?p=235 Retirement planning, in a financial context, refers to the allocation of savings or revenue for retirement. The goal of retirement planning is to achieve financial independence and joy of the third age.

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Retirement planning, in a financial context, refers to the allocation of savings or revenue for retirement. The goal of retirement planning is to achieve financial independence.

The process of retirement planning aims to:

  • Assess readiness-to-retire given a desired retirement age and lifestyle, i.e., whether one has enough money to retire
  • Identify actions to improve readiness-to-retire
  • Acquire financial planning knowledge
  • Encourage saving practices

Producers such as a financial planner or financial adviser can help clients develop retirement plans, where compensation is either fee-based or commissioned contingent on product sale. Such an arrangement is sometimes viewed as in conflict with a consumer’s interest, and that the advice rendered cannot be without bias, or at a cost that justifies its value. Consumers can now elect a do it yourself (DIY) approach. For example, retirement web-tools in the form of a calculator, mathematical model or decision support system are available online. A web-based tool that allows client to fully plan, without human intervention, might be considered a producer. Key motivations of the DIY trend are many of the same arguments for lean manufacturing, a constructive alteration of the relationship between producer and consumer.

Retirement finances touch upon distinct subject areas or financial domains of client importance, including: investments (i.e., stocks, bonds, mutual funds); real estate; debt; taxes; cash flow (income and expense) analysis; insurance; defined benefits (e.g., social security, traditional pensions). From an analytic perspective, each domain can be formally characterized and modeled using a different class representation, as defined by a domain’s unique set of attributes and behaviors. Domain models require definition only at a level of abstraction necessary for decision analysis. Since planning is about the future, domains need to extend beyond current state description and address uncertainty, volatility, change dynamics (i.e., constancy or determinism is not assumed). Together, these factors raise significant challenges to any current producer claim of model predictability or certainty.

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Smart Forecasting For Future Profit https://jrpc.ca/smart-forecasting-for-future-profit/ Tue, 27 Oct 2015 14:17:33 +0000 http://demo.djmimi.net/themes/account/?p=237 Cash flow forecasting is important because if a business runs out of cash and is not able to obtain new finance, it will become insolvent. Cash flow is the hearth of all businesses particularly start-ups and small enterprises.

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Financial forecasting or cash flow management is a key aspect of financial management of a business, planning its future cash requirements to avoid a crisis of liquidity.

Cash flow forecasting is important because if a business runs out of cash and is not able to obtain new finance, it will become insolvent. Cash flow is the life-blood of all businesses—particularly start-ups and small enterprises. As a result, it is essential that management forecast (predict) what is going to happen to cash flow to make sure the business has enough to survive. How often management should forecast cash flow is dependent on the financial security of the business. If the business is struggling, or is keeping a watchful eye on its finances, the business owner should be forecasting and revising his or her cash flow on a daily basis. However, if the finances of the business are more stable and ‘safe’, then forecasting and revising cash flow weekly or monthly is enough. Here are the key reasons why a cash flow forecast is so important:

  • Identify potential shortfalls in cash balances in advance—think of the cash flow forecast as an “early warning system”. This is, by far, the most important reason for a cash flow forecast.
  • Make sure that the business can afford to pay suppliers and employees. Suppliers who don’t get paid will soon stop supplying the business; it is even worse if employees are not paid on time.
  • Spot problems with customer payments—preparing the forecast encourages the business to look at how quickly customers are paying their debts. Note—this is not really a problem for businesses (like retailers) that take most of their sales in cash/credit cards at the point of sale.
  • As an important discipline of financial planning—the cash flow forecast is an important management process, similar to preparing business budgets.
  • External stakeholders such as banks may require a regular forecast. Certainly, if the business has a bank loan, the bank will want to look at the cash flow forecast at regular intervals.

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Safely Use Credit Card In Online Market https://jrpc.ca/safely-use-credit-card-in-online-market/ Sat, 05 Sep 2015 14:20:40 +0000 http://demo.djmimi.net/themes/account/?p=241 Online shopping (sometimes known as e-tail or e-shopping) is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser.

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The lack of full cost disclosure may also be problematic. While it may be easy to compare the base price of an item online, it may not be easy to see the total cost up front. Additional fees such as shipping are often not be visible until the final step in the checkout process. The problem is especially evident with cross-border purchases, where the cost indicated at the final checkout screen may not include additional fees that must be paid upon delivery such as duties and brokerage. Some services such as the Canadian-based Wishabi attempts to include estimates of these additional cost, but nevertheless, the lack of general full cost disclosure remains a concern.

Online shopping (sometimes known as e-tail from “electronic retail” or e-shopping) is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser. Alternative names are: e-web-store, e-shop, e-store, Internet shop, web-shop, web-store, online store, online storefront and virtual store. Mobile commerce (or m-commerce) describes purchasing from an online retailer’s mobile optimized online site or app.

An online shop evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or shopping center; the process is called business-to-consumer (B2C) online shopping. In the case where a business buys from another business, the process is called business-to-business (B2B) online shopping. The largest of these online retailing corporations are Alibaba, Amazon.com, and eBay.

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Withholding Tax And Understanding It https://jrpc.ca/withholding-tax-and-understanding-it/ Thu, 27 Aug 2015 14:26:56 +0000 http://demo.djmimi.net/themes/account/?p=243 A withholding tax, also called a retention tax, is a government requirement for the payer of an item of income to withhold or deduct tax from the payment, and pay that tax to the government (IRS).

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A withholding tax, also called a retention tax, is a government requirement for the payer of an item of income to withhold or deduct tax from the payment, and pay that tax to the government. In most jurisdictions, withholding tax applies to employment income. Many jurisdictions also require withholding tax on payments of interest or dividends. In most jurisdictions, there are additional withholding tax obligations if the recipient of the income is resident in a different jurisdiction, and in those circumstances withholding tax sometimes applies to royalties, rent or even the sale of real estate. Governments use withholding tax as a means to combat tax evasion, and sometimes impose additional withholding tax requirements if the recipient has been delinquent in filing tax returns, or in industries where tax evasion is perceived to be common.

Typically the withholding tax is treated as a payment on account of the recipient’s final tax liability. It may be refunded if it is determined, when a tax return is filed, that the recipient’s tax liability to the government which received the withholding tax is less than the tax withheld, or additional tax may be due if it is determined that the recipient’s tax liability is more than the withholding tax. In some cases the withholding tax is treated as discharging the recipient’s tax liability, and no tax return or additional tax is required.

The amount of withholding tax on income payments other than employment income is usually a fixed percentage. In the case of employment income the amount of withholding tax is often based on an estimate of the employee’s final tax liability, determined either by the employee or by the government.

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