NAVIGATE and MANEUVER through the world of TAX and ACCOUNTING

By: Tim Kwan, Chartered Accountant – Kwan & Company

I AM ENCOURAGED

by how entrepreneurs have reacted, pivoted and supported each other to get through these difficult times.

Iwant to congratulate all of the entrepreneurs who have pushed through and persevered through these unprecedented times. Covid-19 is indeed something that the world has never seen. I am encouraged by how entrepreneurs have reacted, pivoted and supported each other to get through these difficult times. I would also like to applaud all levels of government for their support and aid to business owners.

The following are some basic tips and habits that we would like to share with everyone with regards to financial health.

HEALTH IS WEALTH

BUDGETING

Take the time to sit down and review the inflow and outflow of your hard-earned cash. During the lockdown, you may have saved funds as a result of working from home (ie. not regularly dining out, cancelling gym memberships, etc.) If so, you can put this money aside into an emergency fund to provide yourself with a bigger cushion for the future. Make sure to clearly set out your needs from your wants. It is recommended to have three to six months of expenses in your emergency fund, but you can challenge yourself to have six to twelve months worth of expenses saved up.

MANAGE YOUR DEBT

You’ve heard the saying “Health is Wealth”. All the money in the world cannot buy you good health. It is important to remember to take care of yourself by eating healthy, sleeping well, and exercising. You will be surprised how these three basic things will help you manage and handle stress and increase your overall productivity.

PROGRAMS AVAILABLE TO BUSINESS OWNERS

We wanted to summarize popular and most commonly used funding/programs available to business owners. Please consult with your accountant or tax advisor to see if these apply to you:

Debt or leverage is an important tool to fund the growth and expansion in our businesses and our lives. However, it can be a double-edged sword and when improperly managed, can be extremely harmful to your financial health. Try to refrain from incurring additional debt unless you truly need to.

Do not lease or finance a new car. Avoid making purchases on your credit card that you won’t be able to clear up the following month. Utilize Covid-19 programs offered by your bank to lower your interest temporarily if possible. Take advantage of credit cards that offer introductory 0% rates and transfer your high-interest debt over with the intent of paying it off soon. Consider selling personal assets that you no longer use anymore to pay down your debt. 1. Canadian Emergency Wage Subsidy 2. 10% Wage Subsidy 3. Work-Sharing Program 4. Canada Emergency Business Account interest-free loan 5. Business Credit Availability Program through Export Development Canada or Business Development Canada 6. Regional Relief and Recovery Fund 7. Canada Emergency Commercial Rent Assistance 8. Canada Recovery Benefit *New 9. Canada Recovery Sickness Benefit *New 10. Canada Recovery Caregiving Benefit *New