Category Archives for "Business"

Find the Right Balance for your Remote Workers

By Randall Orser | Business , Cloud-computing , Covid-19 , Employees , Technology

Is your business planning to keep all or some of your employees working from home once the pandemic is over?  Though many giant companies are planning to keep employees working remotely, whether your company should do the same will depend on varying factors such the type of industry the size of your company and your available resources. Here are four things you should consider if you are planning to keep your workers working remotely.

1.  The resilience of your company and your employees - it can be difficult to create a workable balance between how things were done prior to the pandemic and how they will be done under the new conditions, and adjustments will need to be made. Companies can create a plan where some employees work from home and some work in the office, but remote employees should still have some on-site presence.  Distributing a workforce has to take into account business functions, workplace characteristics and office culture and weigh it against the preferences of the employer and employees.  As these changes will have quite an impact on your employees it is important that they are resilient and able to adapt to the changes so that their mental health, productivity and health and safety do not suffer.  

2.  Setting up a distributed workforce will require some logistics - work premises will need to adhere to new health and safety measures including ventilation, proper distancing and limited use of common spaces, but outside factors also have to be considered such as the use of public transit and access to the building.  Outside factors particularly can make it very difficult for a company to isolate itself even though they have the proper rules in place within the workplace they cannot control what is happening outside the office and the building.  Logistics for remote staff will include the home office set up, providing the equipment and technology and security measures to protect the business and it's information.  Clear remote working policies will need to be set including confidentiality agreements and compensation terms, vacation allowances and expense eligibility. 

3. Aligning employer and staff - some workers will want to return to the office but there will be those who prefer to remain at home.  The company needs to take into account each employees risk tolerance and remote working environment.  Not all employee situations are the same and can change, so employers and employees should be willing to be flexible as needs change. 

4.  One of the upsides of having remote workers is the ability to choose new employees from a wider pool of candidates anywhere in the world.  However these workers also come with additional responsibilities for the employer including adhering to different labour laws, tax laws and employment benefit obligations so it is important that the employer is familiar with the rules in each country where employees are working.  It is the new reality that many employees have made the change to work remotely and are looking for work that allows them to do that.  Employers need to pivot to accommodate these workers if they want to hold on to their talent and acquire new staff.  At the same time companies need to create an inclusive culture so that everyone feels part of the work team and this can include attending meetings in the office from time to time to keep in touch as face to face contact is invaluable.

From an article by Sophie Nicholls Jones

New Practices you Should Adopt Before Re-opening your Business

By Randall Orser | Business , Covid-19 , Employees

As businesses are slowly reopening employees who have been working remotely may slowly be phased back into the office.  To do this safely employers have to consider changes that make sense to protect their employees while still operating effectively.  A risk assessment should be done to look at all potential risks such as those that are hygiene related, safety related or involve staff scheduling and deciding what measures need to be put in place to reduce them.

Here are five best practices that employers should think about putting in place to create a safe as possible workplace.

Create a Task Force and a Contingency Plan - Establish a team to monitor the workplace.  They can create a response plan should workers test positive for workplace disruption and enabling the business to continue.  All contingency plans should be continually revised to reflect the current situation and should document all response lessons learned over time.

Communicate Effectively - Employers should communicate their return to work and safety plans effectively either through the task force or the health and safety representative.  Most employees will be anxious about the return to work and these anxieties need to be addressed by employers strongly communicating the safety plans to their staff.  Staff need to be kept up to date either weekly or even daily by email or conference call so that they know what practices are being put in place or revised to protect employees from potential risks or exposure and how these practices will affect their jobs.  It is a good idea to involve employees in conversations and safety plans.

Plan to have a slow return to work - Some companies are finding that having staff working from home is working successfully while for others it is a short term solution which is not sustainable. Phased returns, staggered shifts and different start and end times are a good way of reducing risk so that only a portion of the workforce is present at a given time.  Many companies are now used to working with a remote workforce so employers can decide who must return to work as soon as possible and who can be gradually called back.  Employers should be more flexible when considering the individual circumstances of employees such as those who are at a higher risk of serious illness or those who need to have child care in place.  

Maintaining Distance in the Workplace - Whatever the plans for the return to work employees should be returning to a set of guidelines to help them to continue physical distancing.  Working closely together is difficult to avoid in change rooms or manufacturing lines and even in offices there are challenges that arise in elevators, kitchens, washrooms and boardrooms.  It might be necessary to do some office re-design or create pods of workers to optimize physical distancing.  

Additional Guidelines;

  • How to deal with non-essential visitors 
  • Should employers be taking non-essential travel?
  • Guidance around self-isolation
  • Plans for workers who start to feel ill at work including who they should notify.
  • Implementing cleaning and hygiene measures including cleaning and sanitizing all common areas and providing hand washing and hand sanitizer facilities.

In BC employers can find help through the following resources:  

From an article by Ethan Rotberg

Tips for Pivoting your Business During Covid-19

By Randall Orser | Budget , Business , Covid-19 , Employees

In the past few months we have seen companies take amazing leaps to change the way they do business and manufacturing businesses retool to make new products to meet changed market demands.  From distilleries and hair product manufacturers making hand sanitizer, to clothing manufacturers making surgical gowns, other industries making ventilators and fine dining restaurants turning to take-out and delivery.

It used to take companies a long time to develop strategies to change manufacturing plans but during the pandemic it has been necessary for businesses to make new plans at lightening speed in order to stay in business and keep their workers employed.

However many companies are struggling to meet this new reality and need help to reinvent themselves.  Lior Zehtser from Connect CPA says that "To pivot, you really need to think outside the box and be comfortable with taking a risk and experimenting with a different or unique business model.  Your idea obviously has to take the friction away from close contact, so that anything delivery based or "contactless" would be a great start.

Here are some ideas that might help you to make some decisions:

1. Solving Delivery Dilemmas - the need for delivery especially in the food services sector is insatiable. An outside of the box way of shopping and delivering unique goods to customers is a good idea for a new business. It can be expanded from food to all kinds of products that people would like to have but are not shopping for if they are only going out for necessities.   

2. Going Back to Basics - instead of producing your whole range of products concentrate on the ones that are most popular to make best use of your resources.  Companies are listening to what consumers want the most and are limiting their production to those high demand products instead of producing their whole range of products.

3.  Provide Entertainment -  as families are spending more time together at home offering them a diversion to relieve the boredom is a great idea.  Specialty bookstores and game stores are offering delivery services which are successfully increasing their bottom line.

4. Add to your Product Mix - for example if you are a company that usually delivers drinks or snacks to offices pivot to making home deliveries and add other basics such as milk, eggs and bread and fruit and vegetables.  Many restaurants are doing this by adding many of their sauces and desserts etc to their menus so that people can cook at home with gourmet foods as well as having meals delivered.

5. Make a Product to Help to Fill Health Needs - many distilleries are making hand sanitizers and hand wipes and offering them for free or at a discount to essential service providers.  This is a way to give back to the community and builds brand loyalty.   Many clothing manufacturers have pivoted to making face masks and surgical gowns as well as fashion face masks for sale direct to customers.  

6. Take your Business Online - live streaming and video conferencing are the new ways to stay connected and do business.  By doing this you can keep in touch with your customers and suppliers but at the same time have the chance to acquire a completely new audience.  

7.  Join a Group of Other Companies Seeking Solutions - to build contacts and nurture ideas to help to create opportunities for your business and others.

8.  Get Inspired Globally - look online and find inspiration from what others are doing.  Learn how other businesses around the world are adapting and discover new inventions from companies and individuals that are helping in the pandemic.

9.  Support your Community - connect with charities in your area to see how you can help your neighbours.  Offer discounts on the purchase and delivery of your products, everyone loves a deal and it brings in customers which will help your bottom line.

10. Keep yourself up to date with the latest trends - no matter when the crisis ends the way that businesses operate has changed forever.  It is important to stay on top of changing consumer demands and have a flexible plan to allow your business to keep adapting to meet those demands.

From an article by Margaret Craig-Bourdin

Four Things Not to Do While Working at Home During the Pandemic

By Randall Orser | Business , Cloud-computing , Employees , Freelancing

Many people and businesses were already considering working from home prior to the pandemic, but once social distancing became a reality it accelerated the movement from office to home working.  This has been a massive and sudden transition for everyone involved and it has brought about a new way of working for many of us.

While many thought that they would easily embrace working from home, many also found that it has a set of challenges to overcome.  So whether you are enjoying this new way of working or you are struggling here are a few things that you could do to make your working at home experience more positive and productive.

  1. Don't be Overwhelmed by Small Details  -  Don't be stressed by the sounds around you such as traffic, children and pets which can make your working conditions less than ideal. Other people are also dealing with these distractions, so when you make video or phone calls make light of your less than ideal working conditions to relieve your own anxiety.
  2.  Don't wear pyjamas all day and don't take video or phone calls while still in bed or in the washroom. As much as possible remain professional in your interactions with clients and peers. Get into the work mindset, dress appropriately and allow yourself the usual breaks that you would take if you were in the office.  Try and keep your work routine as normal as possible.
  3. Don't go silent, make sure you keep lines of communication open with other work colleagues and team members.  Set up regular check in times and video meetings this will provide you with regular updates and keep you feeling like you are still an important part of the team.
  4. Don't work in uncomfortable conditions.  It is easy to set yourself up with your laptop in bed or on uncomfortable chairs at the dining table but this will result in aches and pains which will distract you from the tasks that you are trying to complete.  Even if it is only a desk and chair in the corner of your bedroom, set yourself up with a comfortable and ergonomic workspace.

From Dr Laura Hambly on Global News

Planning for the Future of Your Business

By Randall Orser | Business , Retirement , Small Business

In 2011 the Canadian Federation of Independent Businesses conducted a poll that revealed that only 10% of small business owners had a succession plan.  As a small business owner you need to plan for your company's future change of ownership.  A careful exit strategy will help you to maintain the value of your company and your legacy and will ensure a smooth transition to a new owner.

A good succession plan will maintain positive relationships with employees and business partners that will help to bring a good sale price.  It will provide financial security for your heirs and other stakeholders as a plan is in place to deal with unexpected events such as death or illness.

Changes in ownership can be stressful for employees, suppliers and customers so your succession strategy needs to include communication plans to make sure that everyone is kept informed during the changeover thereby ensuring that the business continues to run smoothly.

If you expect to be leaving your business within the next five years you need to start planning right away.  Even if your business is fairly new you need to have a plan in place should the unexpected happen.  

Susan Ward a Canadian business writer says that 70% of businesses do not survive the transition from the founder to the second generation due to poor or no planning, and she offers the following tips for succession planning:

  1. Start business succession planning early, five years in advance is good, ten years is better. Think about including a business exit strategy right into your initial business plan.
  2. Make sure that you involve your family in all business succession planning discussions.  This will help to ensure that everyone is aware of your plans.  It is important to pay attention to the personal feelings, ambitions and goals of all members of the family who might be directly involved with the succession.
  3. Plan realistically, if your children do not have the skills or have no interest in taking over the company from you then consider a different family member who might be more capable.  If there is no one in the family to take over the business then you should consider selling it.  Whatever you decide it should be in the best interests of the business that you have worked hard to make successful.  
  4. Don't plan for everyone to have an equal share in the business.  It is fairer for those who have an active part in running the business to have a larger share of the ownership of the business than non active family members.  You could also transfer complete ownership to your chosen successor and make other financial arrangements for other members of the family.
  5. Make sure that you work with and train your successor for a few years so that they are ready and able to take over the reins should the need arise.  It can be difficult to teach someone your business skills and share decision making but it will be in the best interests of the business. 
  6. Make sure that you get outside help with your succession planning from your lawyer, accountant and financial planner.  They will help you to put together a good plan as well as plan asset transfer tax strategies to minimize taxes due upon your death. 

​From an article by Susan Ward and Freedom 55 Financial

What are the Penalties for Filing a Late GST/HST Return?

By Randall Orser | Business , Retail , Sales Taxes

Businesses that have registered to charge and collect GST must file a return to the CRA at intervals determined by the CRA. Depending upon your business income you may have to file monthly, quarterly or annually. If a business misses it's filing deadline it may be subject to penalties.

The CRA says that if a business has a zero balance GST account or it is owed a refund from the CRA then it will not get any late penalties.  If a business does owe a balance and files a late return then late penalties will be applied.  GST penalties are 1% of the balance owed, plus the result of the calculation of 25% of the 1% x the number of months the return is overdue to a maximum of 12 months.

For example:   1% of $20,000  = $200

                        (25% of $200) x  6 (months)    = $300

                        $300 + $200 = $500 total penalties

In addition the CRA will charge interest on any overdue amount equal to the 90 day Treasury bill rate plus 4%.  This also applies if you have been instructed to make instalment payments and you do not pay by the due date.

There are other penalties that you can incur by not filing a GST return on time.  If you receive a demand to file a GST return and do not do so then a penalty of $250 will be charged.  If you fail to file electronically when required to do so you will be charged a penalty of $100 for the first offence and $250 for each instance afterwards.

What happens if you file an incorrect return?

  • If you make a genuine mistake for example forgetting to include an Input Tax Credit you can include it on a subsequent return.  You have up to four years to claim a missing ITC
  • For other errors such as incorrectly reporting the amounts of GST collected or collectible you will have to request an adjustment of the reporting period affected and this can usually be done through your My Business Account
  • If you have deliberately incorrectly reported and wish to correct this at a future date you use the CRA voluntary disclosure program and pay amounts owed and hopefully avoid penalties and prosecution, although filing through this program does not automatically mean that your request will be granted.
  • If you file an inaccurate return you can be subject to a penalty of 5% of the amount plus 1% per month of the difference between the amount you initially reported and the actual amount up to a maximum of 10%.

It is worth also noting that you cannot claim any income tax deduction for penalties or interest that you may have to pay if you file your GST report late. 

From an article by Susan Ward

Which Goods and Services are GST Exempt or Zero Rated?

By Randall Orser | Business , Retail , Sales Taxes

If think that your new business may have to charge GST/HST you need to know the difference between zero rated and exempt goods and services because not all businesses need to charge this tax.

For the customer there is no difference between GST exempt and zero rated goods as in both cases they are not charged the tax.  For businesses there is a difference in how the two classes of goods and services have to be entered onto the GST return.  Normally when completing the return a business can claim input tax credits to recover the GST paid or owed on business purchases and expenses.  

  • For zero rated goods a business does not charge or collect GST but can still claim ITC's on it's GST return.
  • For exempt goods and services the tax is not charged or collected and Input Tax Credits cannot be claimed.

Which goods and services are zero rated?

  • Basic groceries but this does not include items not necessary for dietary needs such as snack foods, liquor, soda and candy.
  • Most fishery products except those used for bait.
  • Farm livestock sold for human consumption, GST is charged on livestock sales not used for human consumption such as horses, dogs, and cats.  Animals such as rabbits and goats will be zero rated if sold for consumption or GST will be charged if they are sold as pets.
  • Farm equipment such as tractors, seeders, planters and processing equipment.
  • Prescription drugs and dispensing fees are zero rated however drugs sold over the counter are subject to GST.  
  • Medical devices such as artificial teeth, walkers, wheelchairs, canes, eyeglasses, contact lenses and orthotics and others are zero rated.
  • Freight transportation services involving the movement of goods from Canada to other countries and vice versa.

Which good and services are exempt?

  • Used residential housing, GST is only charged on new or substantially renovated housing.
  • Residential rental accommodation if equal to or greater than one month duration.
  • Music Lessons
  • Medical and dental services except for procedures deemed to be non healthcare-related such medical reports, disability certificates and cosmetic surgery to enhance someone's appearance.
  • Issuing insurance policies 
  • Educational services leading to a certificate or diploma, upgrade certification or tutoring services for a designated school curriculum.
  • Most goods and services provided by a charity.
  • Financial services such as fees for bank accounts.
  • Legal aid services
  • Day care services for children aged 14 or younger
  • Food and beverages in an educational institution

Some goods and services that are exempt from the federal GST are not exempt at the provincial level in provinces that charge a provincial sales tax so they are subject to the tax.  As each province is different businesses should refer to the exemption list for the province in which they are doing business.  For British Columbia check  PST Exemptions.

From an article by Susan Ward

How to Pay the GST/HST that Your Small Business Owes

By Randall Orser | Business , Sales Taxes

If you are a small business whose total taxable revenue before expenses is $30,000 or less in the last four consecutive calendar quarters or a public service such as a non-profit organization with total tax revenues of less than $50,000 in the last four consecutive calendar quarters you are classified as a GST/HST small supplier and you do not have to charge GST/HST.  That applies unless you are a taxi or limousine operator or a non-resident performer who sell admissions to seminars or other events, who must register for GST no matter how small their income is.

If you do not qualify as a small business then you will need to charge, collect and remit GST.  To start the process you will need to register for a GST account with the CRA.  You will then keep track of all the GST that you charge or pay and complete a GST tax return each quarter or assigned reporting period which can also be monthly or annually depending upon your total taxable supplies of goods and services in the previous fiscal year when you register.

Even if you do not qualify as a small supplier it may be to your advantage to register for the GST.  Though you will be paying GST on the goods and services that you use in the course of your business you will also be able to recover some of the GST that you paid out on business purchases through  Input Tax Credits.

You must submit your GST returns on time according to your reporting period schedule even if you have not conducted any business or collected any GST during that period.  On each report you will show the amount of GST that you charged your customers and the amount of GST that you paid or owe your suppliers.  The difference between these two amounts is the amount of tax you will pay.  Of course it is not as simple as it sounds as you may have GST charged but not paid to you and bad debts adjustments so you may need to refer to   RC4022 - General Information for GST/HST Registrants for help.  

When your form is completed you have a number of ways that you can pay the amount you owe.

  • Pre-authorization - authorize the CRA to take a take a payment from your bank account
  • Make your payment on line or phone it in through your bank's telephone and online banking services, or pay it in person at your bank.
  • E-transfer, credit card or PayPal
  • By cheque through snail mail using the personalized GST return form sent to you by the CRA.
  • Electronically - the CRA encourages all registrants to use electronic GST filing methods through Netfile,  Telefile, Electronic Data Exchange, or GST Internet File Transfer. 
  • CRA My Business Account which also allows you to manage other tax related payments such as payroll, corporate income tax, excise tax.

If you do not File a GST return on time, unless you have a $0 balance you will be subject to penalties. 

From an article by Susan Ward

What are Input Tax Credits?

By Randall Orser | Business , Sales Taxes , Small Business

Input Tax Credits or (ITC's) are the sum of the GST/HST you paid on legitimate business expenses or the allowable portion of the GST/HST paid.  The CRA refers to these as Input Tax Credits and they used by businesses to recover the GST/HST paid on purchases and expenses related to operating their business.

To use ITC's you must be registered for the GST/HST and then each time you incur an expense or make a purchase related to your business you need to keep your receipt and keep track of these payments in your bookkeeping system.  It is very important that you keep your receipts so that you can prove your claim in case of a CRA audit.

Some of the expenses that you can claim ITC's per the CRA website include: rent, equipment rentals, advertising related expenses such as business cards, flyers and ads, accounting and other professional fees, home office and motor vehicle expenses, office expenses such as stationery, postage, computer and a certain amount of travel including airfare, car rental and hotel rooms.  You can also claim ITC's on Capital expenses including: capital property, machinery and vehicles, furniture and appliances, and improvements to capital property.  See the CRA website for a full list.

According to the CRA you can only claim Input Tax Credits for anything related to your business and the the purchase or expense must be reasonable in quality, nature and cost.  Some of the things that you can't claim for include: some capital property, membership fees or dues to a club which include dining, recreation or sporting facilities (including golf clubs, and fitness clubs) unless you acquire the membership to resell in the course of your business, and taxable goods and services bought or imported to provide exempt (zero rated) goods and services.

From an article by Susan Ward

Working from Home – Why it can be Advantageous for Employers

By Randall Orser | Business , Cloud-computing , Employees , Small Business

If your boss is on the fence about allowing you to work from home a compelling study from Stanford economics professor Nicholas Bloom was featured in an article by Ari Surdoval in Ideas.Ted.Com showed that it can be very advantageous especially for employers. 

When most people imagine working from home they see someone in their pajamas watching Netflix on their laptop.   They believe that working from home can be shirking from home.  Professor Bloom had previously worked from home himself and knew that it was becoming more and more common around the world, so he believed that there had to be more to it than just watching Netflix.  

In the US the number of people working from home has tripled over the past 30 years and was 2.4% of the workforce in 2017.  In countries where mobile technology and improving digital connections have coincided with traffic congestion and sky high commercial rents between 10 and 20% of employees work from home for at least part of their work week.  This was true of the company Bloom used for his controlled trial to put remote work to the test.  The company was one of China's largest travel agencies with a workforce of 16,000.  The company CEO recognized that the company was losing many employees in part due to workers being priced out of the city of Shanghai and having to endure long commutes.

More than 500 employees in the call centre volunteered, about half met the study qualifications which included having a private room at home in which to work and a decent broadband connection as well has having been an employee for six months.  Those with even numbered birthdays would telecommute four days a week while the others would remain in the office as a control group.  Company managers were concerned that as the call centre workers were among the youngest in the company they might be easily distracted without supervision.  

The study lasted for nine months and the results stunned Bloom and the CEO.  The company saved $1900 per employee on office space during the study