HST = HARMONIZED SALES TAX, it's the tax you see on most receipts you receive as it is an end consumer tax.
As soon as you bill over $30,000 then you are not a "small supplier" anymore and must register for an HST number and start charging HST on your invoices.
It's 2022 and you billed $29,000 so far for your agency's services, since you are almost at threshold for HST number and notifying client that you will begin to charge HST (13% tax here in ON). You can elect to voluntarily charge HST whenever you want below threshold before it becomes mandatory.
Your digital marketing services you bill one client
= $1,356 TOTAL INVOICE AMOUNT
The $156 you collected, you need to remit to the CRA quarterly/ yearly/ or monthly.
Do no spend this as it's not your money and it is due to the gov't.
This HST has nothing to do with your personal taxes/ sole proprietor taxes.
From that $1,200 you collected (less expenses), you will be taxed a % depending on your tax rate.
Let's say the entire year was this one $1,200 invoice and you had no expenses. Your tax rate assume 12.75%
You would owe the government / CRA
($1,200*Taxrate) + $156 in HST
= 153 + 156
would be your total tax liability all else equal.
An HST return is basically HST collected - HST spent (on your expenses)
Since you already gave HST to another business (as an expense) you don't need to pay it to the government.
This HST you charge, you must remit to the CRA at the end of the year so do not spend this money. However, the HST you spend on purchases, you can reduce the HST owing by the HST you have spent out.
You must put this HST number on your invoice as well so the receiving company can use this for THEIR HST tax credit.
Put in your business number (hst number) followed by RT0001
Put in your access code number
Reporting period, most other fields probably do not apply.
Next page allows you to enter the HST collected
Net this amount from the HST on the receipts you have spent
Gives you the total you need to file and pay.
If you have any questions re: your HST situation, please let us know we'd love to help.
The type of business dictates what expenses would be included in the cost of goods sold/ cost of service category/ grouping of expense accounts. If the expense can be directly linked to the specific product, project, or activity, it's a direct expense and should be included in the COS group on the P&L.
If the expense is less correlated to the company's sales, it would be included in the operating expenses or other expense below the GROSS PROFIT calculation.
What is included in cost of sale or cost of goods group > direct expense?
An example, you own a company that produces widgets.
All the direct manufacturing, supplies, and selling expenses to get the product in hands of consumer is a direct expense.
All functions of a business can use AI
accounting, marketing, operations, HR, legal, admin, etc...
AI using team > team alone
Apps like ChatGPT are allowing for people to learn and work faster and faster.
You can start using CHAT GPT today.
WHO is the gross profit & who cares?
WHAT can you do with GP?
WHERE do you use GP numbers?
WHEN is it calcuated and used?
WHY people care about gross profit?
Not everyone, depends on factors such as size, goals, risk tolerance, and tax situation.
Tax advantage(s) and legal advantage(s).
Canada Revenue Agency: https://www.canada.ca/en/services/business/start.html
Silicone Valley Bank & Signature
Could not pay all withdrawals
Mostly US operating bank
Friday March 10th
Too many people trying to take out $$ at once.
The T1 is for all Canadian residents.
A Canadian tax form for individuals to fill out. Looks like this, trust me, it's not that complicated, and most fields probably don't even apply to your situation.
Tax filing & payment due to CRA, file online @ wealthsimple.com
Every year before end of April.
Because CRA collects money needed fund rest of the gov't.
The T1 General Income Tax and Benefit Return is a tax return form that individuals use to determine their annual tax liability and claim federal or provincial benefits, such as the GST/HST Credit.
The form summarizes the taxpayer's income, deductions, and tax payable, as computed on supporting forms and schedules, and calculates any refund or balance due.
The T1 form consists of five parts:
2) Total Income
3) Net Income
4) Taxable Income
5) Refund/ Balance owing
Online, In-person, mail, Tax professional
To ensure timely submission, the completed T1 form and any outstanding balances are due by April 30th of the following year (by June 15th for self-employed individuals or common-law partners). If these deadlines fall on a weekend or public holiday, the deadline is extended to the next business day.
Business owners need to build a company track & stay on it.
Key Performance Indicators are common statistics & ratios a company would keep track of.
Pulled from business & financial reports
Always be keeping track of KPIs and perform variance calculations.
Ensure mone is being made.
WHO needs to know?
ROI important metric for business decision makers.
WHAT is ROI?
Rerturn on marketing spend is how much profit is made from a given number of marketing cost.
WHERE can you collect this data?
Marketing ROI = SALES CHANGE/ MARKETING SPEND
WHEN should you look at Marketing ROI?
WHY pay attention to marketing ROI?
Determine what is most profitable for business.