Complacency

Every owner-manager has experienced new employees enthusiastically jumping head-first into the task at hand — only to see that enthusiasm for their job morph into complacency over time.

Complacency on the job not only lessens the performance of an individual employee; it can also lead to accidents or legal issues if workers become used to the status quo and don’t recognize situations that fall outside the normal operational procedures.

Managing complacency is an ongoing process. Can you recognize its symptoms? Social scientists have identified 10 common traits that suggest an individual is complacent at work.

10 Common Traits Of Complacency

  1. An individual may seem disengaged from their work. They may not show enthusiasm for new projects, consistently applying themselves just enough to fill the day until it’s time to pack up for home.
  2. An employee may stop coming up with new ideas or adding their ideas to the project or task at hand, and simply nod in agreement. It might feel as if they don’t want to become involved in the process and are focused only on wanting to get the job done.
  3. If employees have stopped thinking about projects — evidenced perhaps by their not contributing comments or efforts — it’s a sign that they want to distance themselves from the job. This lack of involvement can have a negative impact on their co-workers.
  4. Most people want to be successful and proud of their achievements in the workplace. If you notice that the staff member is no longer interested in learning new job skills or taking courses that enhance existing skills, it’s a sure sign of possible issues.
  5. Individuals have their own style of accomplishing tasks or interacting with clients and fellow employees. If a person loses their sense of identity, they start to doubt how well they work in harmony with others. Thus, they may hesitate to get involved, choosing to withdraw from the process instead.
  6. If you conclude that an employee is not following procedures, not paying attention to detail or constantly making small errors, it implies that they are “resting on their laurels,” and have given up the desire to move beyond their current level of effort. Failing to follow corporate procedures or policies creates risk for the corporate entity that employs them, and reduces a team’s and business’s productivity.
  7. Risk-taking — that is, calculated risk-taking — is a regular part of everyday operations. If employees are not willing to reach out with new ideas or processes, and instead stay with the tried-and-true, it may be a sign that they have lost the desire to accept and deal with change.
  8. Consistently showing up late for work, delaying projects, taking longer-than-normal breaks, or maximizing time off from work is a strong indicator that someone has lost their passion for what they do at the workplace. In essence, they have lost the drive to perform their duties and could be on a downward spiral in terms of job performance.
  9. A disgruntled employee who consistently complains about company process or the job they are doing is often unhappy because the life and work decisions they made have led them to this juncture in their career. Rather than approaching management for other opportunities or accepting that this is their situation, their negative approach risks sowing a toxic and uncomfortable attitude within the broader workplace.
  10. If an employee spends an inordinate amount of time on the Internet, or in the coffee room griping about management or their differences with colleagues, they have likely fallen into a rut in their career. Employees in this stage are not only hurting their own prospects, they will also negatively impact on the morale of younger, more driven employees.

If you’re a manager, understand that complacency in the workplace is engrained in human nature. It is easy in all areas of life to continue on the same path without feeling the need to change. But it’s you who are responsible to keep employees motivated within the work environment, so you can ensure productivity, creativity, efficiency and harmony.

TIPS FOR COMBATTING COMPLACENCY

These practices can be your tools to help manage a complacent employee:

  • Offer incentives based on individual performance. People embrace working towards rewards, whether they are financial (as a bonus), material (think company watch), intangible (time off afterward to acknowledge a tough timeline) or the chance to advance in the future.
  • Provide constructive feedback that acknowledges a job well done — not just for new employees, but also the long-timers that we already expect are doing a good job. If you are dissatisfied with how they handled a process, outline clearly your expectations for improvement.
  • Arrange support if employees are feeling overwhelmed. When necessary, call in other team members to help, or seek temporary outside help. Such an approach not only indicates that you are empathetic to a specific problem but also promotes the concept that each employee has responsibility for other team members.
  • Always have an open-door policy that is highly geared toward engaging the employee’s feedback — whether or not the comments are positive. Moving forward depends on understanding how individual employees see the process and letting them provide input into how they believe things in the company should work. Let’s face it … even managers get complacent with the way things are and can start losing sight of new ideas.
  • Embrace team spirit. Encourage comradery among all employees, where it promotes a work process that builds on everyone’s ideas and contributions. Constantly reinforce the goals of the company and how each employee is an integral part of making it happen.
  • Provide opportunities for training that they feel will enhance their abilities and their value to the company.

Reducing complacency in the workplace is essential to maintain staff motivation and productivity, and to create a positive environment that provides all employees with the opportunity to contribute—not only to the organization but to their individual self-worth. If you want to reduce staff time off and turnover and provide a solid footing for an organization to move forward, use these insights to foster a team environment that encourages employees to meet the challenges at work while receiving constructive feedback and appropriate rewards along the way.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences

The BC Employer Health Tax Effective Jan 2019: How Will It Affect Your Business?

In February 2018, BC’s NDP government proposed the Employer Health Tax (“EHT”) as part of their provincial budget. The introduction of the EHT will be supplemented by the elimination of the Medical Service Plan Premiums (MSPP). Medical Services Plan (MSP) premiums are levied on individuals, whereas the new B.C. Employer Health Tax (EHT) will be levied on an employer’s payroll.

The EHT is being implemented as part of the government’s plan to make life more affordable for individuals in British Columbia by providing savings of up to $1,800 per family each year. The government is introducing these savings by shifting the tax from individuals to businesses.

The B.C. Employer Health Tax is effective as of January 1, 2019.

Under the current system of MSP, employers can choose whether they want to pay their employee’s MSP premiums. In contrast, the EHT will be mandatory for businesses unless they meet the new program’s exemptions. MSP premiums (paid by individuals) will be completely phased out by January 1, 2020.

WHO WILL BE AFFECTED? OVERVIEW

The B.C. EHT will apply to the following employers with B.C. payroll:

  • Employers in B.C. with payroll greater than $500,000 in a calendar year; this includes corporations, trusts, partnerships and sole proprietorships.
  • Associated Employers with a combined payroll of $500,000.
  • Charitable and Non-Profit Employers with payroll greater than $1,500,000.
  • All total payroll amounts that fall below the EHT thresholds are exempt from filing and paying EHT.

Remember, as soon as the payroll exceeds the exemption thresholds, you are required to register for EHT. So, if you are an employer or associated employer, and your payroll reaches $500,001 or more, you will need to register. If you are a charitable or non-profit employer you will need to register as soon as your payroll reaches $1,500,001.

WHAT PAYROLL (REMUNERATION) IS SUBJECT TO THIS NEW TAX?

Examples of a few items included in payroll (remuneration) that are subject to EHT:

  • Salaries and wages
  • Bonuses/Commissions
  • Commissions
  • Vacation pay
  • Taxable allowances and benefits
  • Stock option benefits
  • Employer-paid contributions to RRSP
  • Employer-paid group life insurance premiums

There are many factors to consider when determining payroll items that count towards EHT thresholds. Please contact your accountant for a full listing of items to include or exclude from your EHT calculations.

HOW MUCH WILL YOUR BUSINESS BE REQUIRED TO PAY?

Depending on the size of their payroll, for-profit businesses will be subject to EHT rates ranging from 0.98% – 1.95%. The rate of 1.95% will apply to all payroll amounts greater than $1,500,000.

Annual B.C. PayrollCalculationAmount OwingRate
$500,000 or less$0$00%
$750,0002.925% x ($750,000 – $500,000)$7,3130.98%
$1,000,0002.925% x ($1,000,000 – $500,000)$14,6251.46%
$1,500,0002.925% x ($1,500,000 – $500,000)$29,2501.95%
$1,500,1001.95% x ($1,500,100)$29,2521.95%
$2,000,0001.95% x ($2,000,000)$39,0001.95%
FOR-PROFIT EHT RATE EXAMPLE

Charities and non-profit organizations’ EHT rates range from 0.42% – 1.95%.  These types of employers do not pay the rate of 1.95% until the payroll is greater than $4,500,000.

Annual B.C. PayroAnnual B.C. Payroll at each locationCalculation separate for each locationAmount OwingRate
$1,500,000 or less$0$00%
$1,750,0002.925% x ($1,750,000 – $1,500,000)$7,3130.42%
$2,000,0002.925% x ($2,000,000 – $1,500,000)$14,6250.73%
$2,500,0002.925% x ($2,500,000 – $1,500,000)$29,2501.17%
$4,500,1001.95% x ($4,500,100)$87,7521.95%
$5,000,0001.95% x ($5,000,000)$97,5001.95%
NON-PROFIT EHT RATE EXAMPLE

HOW TO CALCULATE EHT WITH ACCOUNTING SOFTWARE?

Many businesses assume that since this tax is payroll-related, it will be part of a payroll update in their accounting software and will be calculated for them – this assumption is incorrect!

Remember, this is an employer expense, not an employee deduction, so we suggest keeping these calculations separate from your payroll module.

At this time, we recommend monitoring your payroll accounts and calculating EHT manually or using the online EHT calculator provided on the B.C. government website. It is free and easy to use:

https://forms.gov.bc.ca/taxes/employer-health-tax-calculator/

HOW AND WHEN SHOULD BUSINESSES REGISTER AND PAY EHT?

Registration for EHT commences on January 7, 2019. If your total payroll in 2018 would have exceeded the exemption thresholds outlined above you will be required to make EHT instalment payments for the 2019 calendar year. If you are required to make instalment payments, you must register for EHT by May 15, 2019.

Your first installment payment is due on June 15, 2019. Please contact our office for assistance in calculating your required instalment payment amounts.

The registration deadline for all other taxable employers is December 31, 2019. EHT returns and full tax payments will be due annually for all employers on March 31. The first filing deadline of March 31, 2020, will pertain to the payroll for calendar 2019.

If your payroll is not subject to EHT you are not required to register or file an EHT return. As there are several factors that impact exemption status, we recommend you discuss your filing responsibilities with your accountant before making a final registration determination.

All registrations can be done at eTaxBC, the same way a business would register for PST. Payments can be made online through eTaxBC or through your bank via EFT, wire transfers, or as a bill payment.

HOW TO MITIGATE THE EHT IMPACT ON YOUR BUSINESS

Since MSP will not be eliminated until January 1, 2020, some larger corporations will be hit with a double expense of EHT and MSP while they are going through this transition period.

Planning for this change and possibly making adjustments to your business’s remuneration structure can help with navigating the effects of this transition.

Please contact a specialized advisor at Avisar Chartered Professional Accountants for more information or assistance with EHT planning, registration, calculation, and payments.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Impending Changes To CPP

In 2018, many owner-managers across Canada chose to adjust staff levels, wages, and prices when the minimum wage was increased. For many, it is still too early to determine the final impact on the corporate bottom line as a full fiscal year has not been completed.

With the adjustments of 2018, owner-managers may not have looked at budgets for 2019, but considering changes in the Canada Pension Plan (CPP), it may be time to start projecting 2019 and beyond.

BILL C-26

On October 6, 2016, Bill C-26 was passed with the objective of enhancing the CPP to increase the amount working Canadians receive from CPP when they retire. The amount is set to increase from one-quarter of their eligible earnings to one-third.

The increase to an individual’s pension will depend on how long and how much they have contributed to the enhanced CPP structure. An individual will receive the full increase if they have contributed to the enhanced CPP for 40 years. Further, the federal working income tax benefit (WITB) will increase to offset the increase in CPP contributions from low-income earners.

This is a polite way of saying that starting January 1, 2019, higher contributions will be required from both employees and employers. Higher contributions will be phased in over seven years.

The new structure requires that employees and employers contribute more on earnings up to the maximum amount of eligible earnings as indicated under the CPP contribution tables. By 2023, the employee and employer CPP contribution rate will have risen from 4.95 percent to 5.95 percent of eligible earnings. This increase will be phased in gradually from 2019 to 2023.

Those who are self-employed pay both sides of the equation, so contributions will have risen by 2% of eligible earnings by 2023.

MAXIMUM PENSIONABLE EARNINGS INCREASING

Under the current system, CPP contributions are capped at 4.95% of the maximum annual pensionable earnings of $55,900. Once the $3,500 basic exemption is applied, the maximum contribution by both employee and employer is $2,593.80 for a total contribution of $5,187.60.

Down the road, the Yearly Maximum Pensionable Earnings (YMPE) figures are going to change starting from the 2018 YMPE maximum to a projected YMPE of $72,500 by 2025. This amounts to an increase in the YMPE approximating 30%.

In addition to establishing a graduated YMPE rate for contributions, there will be a new upper earnings limit starting in 2024 called the Year’s Additional Maximum Pensionable Earnings (YAMPE) that will effectively require both the employee and the employer to pay an additional amount into CPP when they exceed the YMPE. It appears that an additional 4% contribution will be required by both the employee and the employer on any amounts that exceed the $72,500 YMPE amount up to the YAMPE of $82,700.

TAX DEDUCTION FOR ENHANCED CPP CONTRIBUTION

For the employed and self-employed that exceed the $72,500 YMPE and are required to pay an additional amount to CPP, the employed will be entitled to a tax deduction on the excess amount, while the self-employed will be able to deduct both the employee and employer share of enhanced contribution.

MANAGE THE FUTURE

Even though these increases will be phased in over time, astute owner-managers must consider:

  • the future cost of payroll and the impact on profits
  • the impact that these changes may have on the company retirement and savings plans already
  • in place for employees
  • whether future hires will be entitled to the same benefits package as existing employees
  • ensuring that those preparing payrolls are aware of the impending changes
  • preparing your employees for the additional deductions by communicating to employees the projected additional CPP source deductions from their pay
  • communicating to the employee the additional benefit cost for contributions the company makes
  • to their CPP
  • communicating to employees the impact that additional contributions may or may not have on the company retirement and savings plan
  • the impact that this may have on future payroll costs as employees request raises to offset the additional deductions from payroll and an increase in the cost of living
  • the timing of bonuses and other discretionary income

Employers and those who are involved in payroll may be interested in reviewing the CRA website that offers a chart showing the timing of the changes, the increased YMPE, the additional contribution amounts that will be required up to the YMPE and the contributions required on amounts over the YMPE.

Those who are involved with payroll will certainly want to keep abreast of the changes and ensure that their accounting packages can be modified for the changes that are coming.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

TFSA and Death: Have You Planned For What Will Happen With Yours When You Die?

If you own a TFSA, you undoubtedly started it because it allows you to invest and earn dividend or interest income and make a capital gain without paying tax.

Unfortunately, similar to any investment vehicle, complications may arise after your death unless you address the tax consequences in advance. Consider the following circumstances that can affect what happens with your TFSA after you die.

SUCCESSOR HOLDER

If you have named a survivor — your spouse or common-law partner — as a successor holder, then that individual acquires all the rights of the original holder and thus becomes the new account holder.

With this scenario, the TFSA does not terminate and thus there are no tax consequences to the new account holder. An additional benefit may accrue if the original holder has overcontributed before they passed and the new account holder has contribution room in their TFSA.

In this situation, the overcontribution by the deceased can be absorbed by the new account holder into their TFSA, thereby eliminating the chance of future overcontribution penalties (currently at 1% per month).

ROLLOVER PERIOD

Assume for a moment that the deceased did not designate the spouse or the common-law partner as a successor holder. What then?

If the spouse or common-law partner named in a will are accorded an inheritance that includes the TFSA, they can transfer their spouse’s TFSA to their own TFSA within a prescribed time period, called the “rollover period.”

The rollover timeframe is explained as starting at the time of death until December 31 of the following year. During this rollover period the investment income is sheltered from income tax.

If the beneficiary decides to transfer funds to their own TFSA during the rollover period, these transfers are considered to be “exempt contributions” and as such do not require that the beneficiary have room in their own TFSA. However, the amount of the transfer is limited to the fair market value (FMV) of the TFSA as at the original holder’s time of death.

Thus, if at the time of death, the FMV was $50,000 but at the time of transfer the value of the TFSA was $55,000, then the $50,000 could be transferred without any impact.

However, the $5,000 increase would either have to be absorbed by the beneficiary if they have room within their TFSA or be included within the beneficiary’s income within the year of the transfer.

NAMED BENEFICIARY

When you die without a spouse or common-law partner, the TFSA is collapsed at the date of your death. The amount of the TFSA can be transferred to the named beneficiary tax-free, but only up to the amount of the FMV of the TFSA at the date of death. Naturally, the beneficiary would need to have TFSA room to absorb the FMV transfer.

For instance, if the beneficiary had $30,000 of accumulated TFSA room and the FMV of the transfer was $55,000, $30,000 would be transferred tax-free while the excess $25,000 would be considered withdrawn and part of the beneficiaries inheritance with no additional Canadian tax consequences.

This calculation does not account for any increase in FMV that may have occurred since the date of death.

FORM RC 240

It is worth noting that when a contribution is made to the successor holder’s TFSA, the successor holder has 30 days from the date of contribution to fill in Form RC 240, Designation of an Exempt Contribution Tax-free Savings Account (TFSA).

As you can see, there are potential tax complications with a TFSA when a taxpayer passes. Remember also that the provinces and territories are responsible for the rules governing the transfer of assets of a deceased.

Fortunately, the CRA and their provincial/territorial counterparts have agreed that having the named beneficiary on the TFSA application will allow transfers without inter-jurisdictional complications.

Quebec may be an exception, wherein the TFSA transfer goes to the estate and the will of the deceased comes into play.

Since TFSAs are registered with the CRA, an astute taxpayer would want to determine the tax consequences, either when their TFSA has a named survivor or when the will takes precedent.

It’s probably worthwhile to confirm that your CPA is aware that you have a TFSA. Then, should you die unexpectedly, your tax advisor can assist your successor holders or beneficiaries.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Electronic Signatures

Owner-managers have adapted quickly to transferring funds electronically, paying invoices online and scanning and sending data to and fro.

When it comes to product delivery, contracts or agreements, many are still relying on hardcopy signatures or faxed copies of paperwork to finalize the deal or witness product or service transactions. This process can be time-consuming, with the need to attend your solicitor’s or client’s site or to print and file shipping or receiving documents.

Signing documents electronically is a great solution for saving time while ensuring they are legally binding.

Two types of signatures are available that help make this process easier: a digital signature and an electronic signature. Both methods produce the same effect: The signed document is recognized as an authentic signature of a signatory and meets the Canadian standards for electronic signatures.

Canadian law regarding electronic signatures is under the guidance of the Personal Information Protection and Electronic Documents Act (PIPEDA). It states:

  • “An electronic signature means a signature that consists of one or more letters, characters, numbers or other symbols in digital form incorporated in, attached to or associated with an electronic document”
  • “A secure electronic signature is as an electronic signature that
    • is unique to the person making the signature;
    • the technology or process used to make the signature is under the sole control of the person making the signature;
    • the technology or process can be used to identify the person using the technology or process; and
    • the electronic signature can be linked with an electronic document in such a way that it can be used to determine whether the electronic document has been changed since the electronic signature was incorporated in, attached to or associated with the electronic document.”

ANDROID OR APPLE?

Most businesses will require electronic signatures with hardware and software that will allow someone to sign off on a document from anywhere. Whether you have Android- or Apple-based hardware and software, you can buy a tablet or iPad that’s Microsoft Word or Excel-compatible and allows PDF signing in an application such as Adobe Acrobat. In theory, they let you start e-signing right “out of the box.”

HARDWARE COST

The hardware cost for signature pads varies from $150 to $650. The less expensive models provide a basic touchpad and stylus, while the more expensive approach legal-sized electronic units that will provide an electronic copy of the document and a hardcopy if needed. Regardless of the unit, you’re considering, ensure your choice includes high-quality biometric and forensic capture techniques to guarantee confidentiality and reliability.

WHAT TO LOOK FOR

Most companies that offer electronic signature capabilities should provide the following:

  • You should be able to provide your signature via all of the business’s formats (smartphone, laptop, etc.). Using your finger, stylus, mouse or keyboard makes it valid.
  • It should enable a complete audit trail with date and time stamps and in-document checkboxes that ensure signees follow the expected procedure in a reasonable timeframe.
  • Your documents should be secure, encrypted and legally binding in every country.
    It should create unique signatures that can only be used by the signatory. (Only individuals authorized by an organization have document access, and all files are encrypted during transit and storage.)
  • Signatures should be able to be stored securely in the Cloud and at your premises.
  • User authentication methods should be equal to the transaction’s security need.
  • There should be multi-party signing capability for items needing more than one signature.
  • You should be able to track the progress of the document.
  • The solution should be able to integrate with the application your company is already using, such as Google Drive, DropBox or SalesForce.

AND THE COST …?

The cost of obtaining and maintaining your electronic signature template is tricky to find and understand. Most websites will not provide a specific quote. Some will start with a basic per-year cost, but will still require that you contact them to see if your business is able to take advantage of bulk discounts or discuss whether your specific application requires additional features that add to the cost.

Companies such as Adobe may offer their service as part of an integrated package. Packages are usually sold for a flat monthly or an annual fee or are based on the number of senders (similar to cost structures of most software, where more users mean higher cost). Or you may pay on a per signature basis.

As you can see, good business practice suggests that determining what the business requirements are before making a final decision will avoid disappointment and expensive upgrading. You will need to contact the supplier for help determining your specific needs, then work with them to agree on the costs to the organization for such a solution, based on how you will integrate existing systems and your needs for hardware, software, communication and reporting.

If your business has become comfortable with the paperless approach and you’re already using it for banking, invoicing, payroll, purchasing and sales, maybe it’s time to “complete the circle” and adopt electronic signatures, too.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Avisar Charter Professionals - Window to the World

Your Window To The World

If Your Company Doesn’t Have A Website, Now Is The Time

Having a website is essential because so many potential customers are connected to the Internet. Statistics confirm this: by the end of 2017, an estimated 95% of the North American population was connected to the Internet.

The volume of print advertising has declined and digital advertising has grown. Your potential customers are looking to the Internet for information.

Developing a website for your company requires careful thought about the words and images that carry your message. There is a temptation to do the design and write the copy yourself, but if this is not your area of expertise, it is better to go to an experienced website designer. If the website looks amateurish, you will too.

WEB ADDRESS

Get a memorable domain name for your website. A complete URL (Uniform Resource Locator) incorporates your domain name (i.e., the unique identifier of your company’s website) along with other detailed information to create a “web address” that directs a browser to a specific page online called a web page.

CONTENT

An experienced website designer will tell you what information is necessary to present your business. Addresses, contact numbers, hours of operation, etc. are essential, but it is important to keep text to a minimum. Present information in a simple, short, quickly readable style that can be easily scanned and absorbed.

Your Type Of Business Determines The Content Of Your Webpages

Your type of business determines what you should put on your web pages. For example, if your business is home renovation, include pictures of the insides and outsides of completed homes.

Contact information should be prominently displayed. Include a link from your address to maps that can easily be downloaded to smartphones.

Make it easy for your website visitors to get prices, place an order, visit the nearest store, or do whatever is necessary to move them toward a sale. The greater the expectations for the website, the more is required in the structure of the design. For instance, placing an order requires a payment method and the additional security necessary to protect the client and your business from hackers.

You need to secure your site with an SSL certificate to encrypt the two-way communication between your business and the customer. If you want to be able to accept orders and payments online, be sure the way your site handles or stores customer payment information complies with PCI DSS (Payment Card Industry Data Security Standard) requirements.

SOCIAL MEDIA

Determine whether you want to integrate your website into other social media platforms such as Twitter, Facebook or LinkedIn. Such connections will increase your exposure to various social and age demographics.

Make sure the content of your website is always fresh and relevant to your business; without regular updating, the site and the extended platforms will not be able to maintain interest.

More and more smartphones and tablets are using the web. Computer-based access is not mainstream anymore. Statistics demonstrate that individuals who access a website by tablet or smartphone are intent on shopping — now. Thus, your website design must adapt to the screen size used by the visitor; this is called “responsive web design.”

FINAL REVIEW

Once the website is designed, have it tested by a third party unfamiliar with your company and products or services to critique the website’s ease of use. A few areas to consider include:

  • grammar and spelling
  • cultural or gender sensitivity
  • ease of navigation through the links
  • interactivity with the user
  • correctness of contact numbers, email addresses, business location
  • ease of access from various devices

HOSTING

A WebHost is a service company that gets your newly designed website onto the Internet and makes it findable. The hosting company will also maintain the website. Good hosting is essential to ensure fast access to your homepage. Slow response time will not only turn potential clients away but will also affect your ranking with search engines. (Many search engines use algorithms to detect loading speed.) If your site access time is slow, the system simply relegates your site to a less desirable ranking. Search engines also use other information in your web pages, including embedded data that is not visible to the end-user, such as meta tags, to help visitors find the content they are looking for. Some of the major search engine providers, such as Google, offer Search Engine Optimization (SEO) tools to help website owners identify potential issues that may result in a lower ranking.

UPDATING

Website design is not a one-time process. You will need to maintain the website and update it regularly to keep customers interested and to promote new products or services. Your website designer should become familiar with not only your products and services but how much time they need to maintain your site.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Being In Control Comes With Its Own Responsibilities

Henri Fayol, a French mining engineer, published one of the first principles of management guidelines in 1914. This was one of the more memorable principles:

“Control of an undertaking consists of seeing that everything is being carried out in accordance with the plan which has been adopted, the orders which have been given, and the principles which have been laid down. Its object is to point out mistakes in order that they may be rectified and prevented from recurring.”

Henri Fayol

By necessity, owner-managers are required to be in control of every aspect of their business, since they’re ultimately responsible — and potentially liable — for matters including:

  • sales and receivables
  • purchases and payables
  • banking and borrowing
  • ensuring workplace and employee safety
  • withholding and paying taxes
  • collecting and remitting HST
  • protecting data security and confidentiality
  • addressing labour disputes
  • co-ordinating a union

But what are the possible consequences should management be unable to fulfill all of these responsibilities?

SALES AND RECEIVABLES

Not monitoring sales or collecting accounts receivable may mean going to small claims court to seek payment for receivables up to $25,000 (in Ontario). The cost of gathering data and time presenting yourself in court or hiring a paralegal may cost more than the amount that you’ll ultimately be writing off.

PURCHASES AND PAYABLES

Decide that you don’t want to pay an outstanding invoice with a supplier and you may be denied further service or product, which could bring your business to a standstill. At the very least, expect annoying collection calls — at the extreme end, you could face legal action that will swallow up your time and money while you defend yourself.

Continuously bounce cheques, and suppliers may demand cash-on-delivery or reduce your credit status, thus also hampering your ability to produce products or deliver services.

BANKING

If you do not control your bank balance and are routinely going into overdraft, you may have to manage with a poor credit rating, interest and overdraft charges, and holds put on your deposits.

BORROWING

Borrowing for any business asset puts the business and owner-manager at risk if the loan’s terms and conditions are not met.

Caveats in lending contracts that are broken may result in the loan being called, creating a cash crisis in the business.
Failure to repay a loan on a secured asset will result in the asset being seized — try running an operation without one of your key pieces of equipment.


If you have signed a personal guarantee on a business loan, your personal assets may be subject to seizure as well.

SAFETY

The consequences of neglecting safety within the workplace are multifaceted:

Your business will be subjected to fines and penalties from WSIB (Workplace Safety and Insurance Board).
Insurance and borrowing rates will increase in light of an accident.
In severe situations, your worksite may be shut down for failure to comply with safety rules.
If there is catastrophic injury or death, your business and you may be held personally liable as an officer or director of the company.

WITHHOLDING TAXES

Income tax, Canada Pension Plan (CPP) contributions and employment insurance (EI) premiums are considered “funds collected and held in trust by an employer.” Because this money belongs to your employee, the Canada Revenue Agency takes a hard line for businesses who are not remitting:

“If you do not fulfill your obligations or comply with our payroll requirements, you may be assessed a penalty, interest, or incur other consequences.
If you do not comply with the deducting, remitting, and reporting requirements, you may be prosecuted. You could be fined from $1,000 to $25,000, or you could be fined and imprisoned for a term of up to 12 months.”

CRA: Employer’s Guide—Payroll Deductions and Remittances

GST/HST

Not filing GST or HST (Goods and Services Tax or Harmonized Sales Tax) will not only mean penalties and interest levied to your business, it will no doubt result in a visit from the CRA to review your business operations to determine if there are deficiencies within your accounting system contributing to your failure to file. Since you are really collecting GST/HST funds from your clients on behalf of the government, the CRA takes strong exception to the fact that they have not received those funds.

INCOME TAX

Not filing corporate income tax can mean fines and penalties if corporate taxes are owing, and potentially worse consequences. Although rare, jail time can result if demand for filing is made and the business does not comply.

If taxes have not been filed for several years, the CRA may arbitrarily file a tax return and send the business a Notice of Assessment that says funds are owing. This usually encourages corporations to file their returns on their terms.

When tax returns have been filed, but income tax owing has not been paid, the CRA will freeze your corporate bank account. This effectively limits your ability to use that account to operate your business. Payroll, automatic deposits, automatic payments — in effect, all bank transactions — will come to an abrupt halt.

DATA SECURITY/CONFIDENTIALITY

Organizations that are required to collect personal information as part of their normal operating procedures must also, “protect information against loss or theft as well as safeguarding the information from unauthorized access, disclosure, copying, use or modification.” These requirements apply regardless of the format in which the information is stored.

Once this information is obtained, many private-sector businesses within Canada are required to follow the guidelines laid out in the Personal Information Protection and Electronic Documents Act (PIPEDA — note that different provincial privacy legislation may apply in Alberta, British Columbia, and Quebec).

One section of this Act gives people a right to access their personal information held by your company. Employers are required to provide this information on request, so it is incumbent upon them to be able to access and provide it. There are some exceptions, so check with your legal counsel if you are not sure.

LABOUR DISPUTES

Becoming involved in unresolved labour disputes is an employer’s worst nightmare, and it results in the provincial Ministry of Labour or its equivalent getting involved in the dispute process. Management must be aware of employment standards, as well as those that apply to workplace health and safety.

UNION NEGOTIATIONS

Employers make a serious error if they fail to treat unionized employees fairly, or do not submit deductions for union dues and other employee deductions required under a collective bargaining agreement. Not only will such an approach give rise to legal action for collection; it could also mean a union refusing to provide employees for projects that require unionized workers. The bottom line? Your business income suffers.

A successful owner-manager understands that, while they have the appearance of being in charge and in quasi-control of their company, that control is only valid if their operation complies with the multiplicity of third-party plans that have been adopted, external orders they have been given and third-party principles laid down in laws or regulations.

How can an owner-manager rectify and prevent the continuous invasiveness of third parties and thereby maintain control over their operations? It is only by fostering a culture of process and procedures within an organization that follow external rules and regulations.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

We Owe How Much

OUCH—We Owe How Much?

Manage Cash Flow Better By Projecting Future Tax LIabilities

Unforeseen circumstances often leave owner-managers short of the cash needed to pay federal and provincial taxes. Unfortunately, many owner-managers consider unpaid tax bills to be the same as unpaid trade credit.

They are not.

Unpaid taxes can cause a lot of problems. Ensuring funds are available to pay obligations to the Canada Revenue Agency (CRA) should be a top priority for any business, whether incorporated or a sole proprietorship.

WITHHOLDING TAXES

Every self-employed business owner or owner-manager is obligated to collect GST/HST and PST as well as deductions for employment insurance, Canada Pension Plan, and income taxes. These amounts are collected “in trust” from the employee or client on the understanding that the funds will be remitted to the CRA on their behalf.

In theory, the business should just collect the money and set it aside in a separate account until the required filing date. However, it is often all too tempting to use the “in trust” funds as working capital and assume sufficient cash flow will be generated when accounts receivable are collected or additional cash sales occur.

This may be fine in theory, but in practice, the necessary funds are rarely available. For a corporation, it is particularly important to note that directors could be held personally liable for the unpaid “in trust” taxes.

INCOME TAX PAYABLE

Income tax payable at the end of the year, whether for corporate tax or income tax owing on self-employed earnings, is another area that is problematic for many. The major issue for most businesses is that they are unable to project the amount of taxable income that will be earned by year-end and thus cannot anticipate the amount of income tax owed.

As a result, when taxes are due, there may be insufficient funds available to make the payment.

To make matters worse, many corporations are required to pay the taxes owing within two or three months of the corporate year-end. Owner-managed businesses may have difficulty finalizing their year ends and providing such information to their CPA on time. Thus, year-end taxes and the instalment could be owing at practically the same time. This creates incredible cash flow issues for corporations that have a large corporate tax liability at the end of the fiscal year and then have to make a large instalment payment.

The reverse can also occur. A taxpayer remits large amounts in instalment payments throughout the year based on the prior year’s tax liability only to discover at the end of the current fiscal year that the corporation made little profit or suffered a loss and therefore owed much less than the sum of the instalment payments already made. In such instances, the CRA may owe the business thousands of dollars that could have been used within the business but are not refunded until the actual filing of the tax returns.

THE CRA HOLDS ALL THE CARDS

The CRA determines when taxes should be paid. If instalment payments are not paid, the business must endure non-deductible interest for late payment. On the other hand, if the instalment payments are made and the business does not have a tax liability, the CRA has held onto funds that could have alleviated cash flow.

The CRA pays interest on overpayments, but only on the amount of tax owing at the time of filing, not on the entire amount of the overpayments. Also, the CRA charges the taxpayer’s arrears interest at 6% while the interest rate on taxpayer’s overpayments is only calculated at 2%.

Business Owners Need Money On Hand To Pay Tax Instalments

TAKE CHARGE

Business owners need to have sufficient funds on hand to make payments when due. To minimize the risk of insufficient funds, management must take into account not only the withholding tax requirement but also the need to minimize instalment payments and/or interest charges on the funds needed to make the corporate tax instalments.

The following procedures provide a way to anticipate future obligations. The process of deriving this information will be of value to your business by:

  • Ensuring a better understanding of your business cycle
  • Providing insight into periodic profits and losses and thus any potential income tax liability
  • Projecting the estimated GST/HST/ITCs and withholding taxes that will be due
  • Providing indicators of when cash flow may be tight
  • Reducing the uncertainly as to the amount of income tax instalments and thereby providing a reasonable payment schedule for corporate income tax
  • Lessening the impact of non-deductible interest and/or penalties on amounts due but unpayable because of inadequate cash flow
  • Reducing the probability of scrutiny by the CRA because of late payments

THE PRESENT GUIDES THE FUTURE

If management makes reviewing financial statements an integral part of their work cycle, not only will they benefit the future by understanding the present, they will also be better able to sleep at night knowing their cash flow needs are under control.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or any consequences arising from its use.

Moneysaver-scams

The Little Black Book Of Scams

Common-Sense Strategies Can Protect Your Business From External Fraud

Scams and frauds are probably as old as humanity, but recently they have taken a new turn with the arrival of the Internet and the development of sophisticated telecommunications technology. The Government of Canada has reacted by setting up the Canadian Anti-Fraud Centre, and the Competition Bureau has published a valuable handbook called The Little Black Book of Scams (full text available at www.competitionbureau.gc.ca), which describes 12 important classes of scam and how to protect yourself against them.

Included below are five scams of special concern to small-business owners.

1. BUSINESS SCAMS

In the directory scam, your company receives a proposal for a listing or advertisement in a magazine or business directory. Someone then calls to confirm the address and billing information. Accounts payable soon receives an official-looking invoice and unwittingly pays.

The office supply scammer bills your company for paper, toner, etc. you did not order.

In the health-and-safety products scam, someone pretending to be a government inspector will tell you that you need to replace outdated first-aid kits or safety equipment.

How to Protect Yourself

Create a list of regular suppliers; any new names should be questioned by the accounts payable staff. Because scammers can create company names and logos that look genuine, staff should look closely at all incoming invoices to verify dates, account numbers and other identifying information. The number of persons authorized to pay bills should be limited since scams are sometimes committed by an employee conspiring with an external fraudster.

Senior executives can be the target of special scams.

2. CEO SCAMS

Persons who have signing authority for large sums of money or report directly to the CEO are particularly common targets for this scam. The scam occurs when the CEO or other senior executive is known to be away from the office on a business trip. After hacking your email server, the scammer sends an email or other communication allegedly from the absent executive saying extra funds are needed immediately to close a deal, secure a contract, or take advantage of an unexpected opportunity. The email will ask that the money be sent to a third-party account.

How to Protect Yourself

Secure your computer systems with strong passwords and up-to-date antivirus software from a reputable supplier. Validate the request. Check the email for spelling and grammar mistakes and use of the language uncharacteristic of a native speaker or your executive. Have a standard, multi-level process for signing off on wire transfers.

Remember, a wire transfer is cash; recovery is virtually impossible. Limit the amount of information available to the public about your key employees.

3. SALE OF MERCHANDISE SCAMS

If you market online, you need to be aware of scammers posing as buyers of your product. A scammer will agree to buy your product and pay through PayPal or an email money notification claiming the payment is pending and will be released after you provide a tracking number.

Since a tracking number is usually only created when the purchase is being shipped, the product is on the way to the buyer before you find out the payment-pending notification was fake.

The scammer might also tell you the payment cannot go through because of some problem with your PayPal or bank account and you will have to pay a fee to get another account to complete the transaction. The generous scammer offers to pay the fee now if you will transfer or wire the fee amount to a false bank account. Now you will not only lose the product and the payment, but you will also lose the fee. The scammer may also simply use a stolen credit card number, issue a fraudulent cheque or make a fake money transfer.

How to Protect Yourself

Beware of buyers who are geographically distant with unverifiable email addresses. Never send money to get money.

4. DOOR-TO-DOOR SCAMS

These scams are committed by fraudsters seeking charitable donations or claiming to be selling maintenance or other services. These scammers are often very aggressive, very articulate, and know every trick of persuasion in the book.

How to Protect Yourself

Do not make a quick decision no matter how great the pressure. Do some research on the charity or maintenance company. Get their address. Get the name of the person making the sales call and call the charity or company to make sure the person you talked to actually represents them.

Do not let strangers see any company documents such as receipt forms that could give them information about your company. Do not sign anything. Make sure your employees know you have a procedure in place to review any proposals that come through the door.

5. IDENTITY THEFT

Identity theft is the theft of a person’s unique identifiers such as a Social Insurance Number (SIN), passport or driver’s licence, as well as personal information such as bank account or credit card numbers, birth date, signature, address, mother’s maiden name, user names and passwords. Possession of this information enables the scammer to assume the victim’s identity and transact as if they were that person.

How to Protect Yourself

Shred and destroy documents with sensitive information. Destroy redundant IT equipment, especially hard drives and other storage media. Never use SIN numbers as a filing system. Never send personal identifiers or sensitive personal information by email, text message or give it to unknown callers over the phone. And (it cannot be said too often) always use strong passwords for all online accounts.

You Cannot Be Too Careful

Fraud, whether committed by an employee or by an outside scammer, can destroy a business. As technology changes and scammers become more sophisticated, owner-managers must protect their businesses even more. Constant vigilance is a low price to pay for keeping your business safe.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Technology - Avisar - Eyes

The Eyes Have It

Reduce Eye Strain And Increase Productivity By Changing The Way You View Your Screens

Regardless of occupation, we all spend an inordinate amount of time staring at computers, laptops or smartphone screens. The result is often eye strain known clinically as computer vision syndrome (CVS). Researchers suggest that between 50% and 90% of individuals who work with monitors for more than two hours a day suffer some form of symptom.

SHIFTING FOCUS

Working in front of a computer monitor stresses the eye muscles because our eyes move across the screen in the same way over and over again. Regardless of whether your eyes are jumping between screens or moving between the screen and a document on your desk, your eye muscles become fatigued. The need for the eyes to constantly shift focus and direction plus the monitor’s flickering, contrast, and glare just add to the stress on the eye that creates eye strain.

THE AGE FACTOR

Eye stress is also affected by age. As individuals move past 40, there is a noticeable degradation in the ability to focus on close objects. This change (called presbyopia) is a normal ageing process that can usually be compensated for with eyeglasses, contact lenses, or surgery. If you do not correct presbyopia, you will be bothered by headaches and eye strain. Constant use of monitors without appropriate compensations increases problems with colour perception, blurred vision, double vision, dryness, red eyes, eye irritation, headaches, neck or back pain.

Correctly Position The Monitor

RELIEVING THE SYMPTOMS

Experts indicate the following processes help reduce CVS:

  • Correctly position the monitor: The best position is straight ahead and tilted slightly down. This reduces the need to force the eye muscles to pull the eye up. The top of the computer monitor should not be higher than the level of your eyes.
  • Blink more: Those working with monitors blink five times per minute versus a normal blink rate of
    12 times per minute. Thus, the eye does not produce the tears that help prevent inflammation by keeping open the oil-secreting glands in the eyelids.
  • Placement of Monitor: Place the monitor (including your smartphone) from 45 to 76 centimetres (18-30 inches) away from your eyes and tilt your screen to avoid glare from overhead lights. Glare creates eye strain.
  • Close the blinds: reduce back and sidelight and consider a matte screen filter.
  • Consider using computer eyewear: There are numerous and conflicting articles as to whether “computer glasses” designed to better read the monitor and to reduce the blue light emanating from the screen are beneficial. Check with your optometrist as to whether there would be any benefit in having prescription “computer glasses” before buying those online bargains.
  • Give your eyes a rest: The Mayo Clinic suggests observing the 20/20 rule. Every 20 minutes look at an object that is at least 20 feet (six metres) away for 20 seconds to relieve the stress on the eye muscles and thereby reduce the progression of nearsightedness (i.e., the inability to see far-away objects clearly)
  • Change the monitor’s display settings: Increasing the font size will reduce eye strain as will changing the contrast level on the monitor. Believe it or not, the best setting for using a monitor is the tried-and-true black text on a white background. Reducing the monitor’s brightness level to replicate a standard piece of office paper is a preferred standard. For those using more than one monitor, ensure that both are matched to the same settings.
  • Size counts: Buy a monitor that is at least 19 inches with anti-reflective surfaces. If within the budget, upgrade monitors to UHD.
  • Reduce “visual noise”: Blue light is what makes the screen look better, but it is also harder on the eyes. The Canadian Association of Optometrists states:

Computer screens and other digital devices emit significant amounts of blue light and people are spending more and more hours looking at them. The high-energy blue-light waves scatter more in the eye and [the eye] is not as easily focused. This scatter creates “visual noise” that reduces contrast and can contribute to digital eye strain.
The solution is to reduce the blue light emitting from the screen by reducing the brightness.

EYE MANAGEMENT

At the moment, there is no scientific evidence to suggest that constantly staring at monitors has any long-term impact on vision. However, from a productivity standpoint, eye strain and its accompanying maladies affect daily performance. To improve performance, owner-managers should review their computer location, office lighting and the other factors noted above to create a more comfortable and effective work environment. In addition, staff should be encouraged to have annual eye examinations and create work schedules that include breaks to reduce time staring at the computer.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.