We recently had a new client come in, his wife has done his books for years and she has found it was at the point where she said,
“I really don’t know what I’m doing and I really don’t want to do this anymore. Go find a bookkeeper.”
He was a very successful individual in construction, he had only 1 employee.
When we looked at this books we knew within about 30 seconds we knew something wasn’t right.
We noticed, for example he had bought a vehicle he didn’t know it was a write off. He had purchased this vehicle, didn’t get his GST back and was not writing off anything but the fuel. We put his vehicle into his company and maintained that write off for him. We do see this often, and we are not sure why it happens. Sometimes the accountant will write off all the fuel and maintenance, but they do not actually write off the vehicle.
He also he had not written off any home expenses. He was working out of his home, but he did not give any home expenses to the
He had bought a trailer, also through his personal bank wasn’t writing off any of the interest on his payments.
Generally speaking, he was missing standard write offs that we like to see. There were many things that were disconnected and didn’t make sense.
He was fully entitled to the write offs, but due to lack of knowledge, he wasn’t taking advantage of them.
We straightened out his books, reclaimed expenses that he should have had. We had a conversation with the accountant, and pulled the books into an organized fashion.
By the time we’re done with his books he saved about $12,000 in taxes in comparison to the previous year.
Summary of changes that made the difference:
Added vehicle into the books
Reclaimed missing GST
Added equipment and payments that had been missing
Reorganized his chart of accounts for clarity
Added missing cell phone bills
Found missing insurance payments
Educated the client what receipts to save
Put client on a monthly bookkeeping plan
So, did you not get back as much as you were expecting this year?