This week, Trevor had the unique opportunity to co-present with Meagan Buttle, entrepreneur, Clinical Director of Buttle Speech Pathology and his daughter! Together they combined insights on key accounting topics along with the real world experience of two entrepreneurs.
Their audience was Private Practice Together, a community for Canadian allied health professionals in private practice. As busy practitioners, they, like many entrepreneurs, try to strike the right balance between working “in the business” and “on the business”. To help them get back to basics on the financial fundamentals, Trevor and Meagan talked about a variety of topics:
A bookkeeper’s primary role is to manage and maintain your day-to-day financial transactions. This includes recording income and expenses, processing invoices and payments, and reconciling bank accounts. Bookkeepers ensure that all financial transactions are accurately recorded, providing a clear picture of your business’s financial health.
On the other hand, an accountant’s responsibilities are more strategic and analytical. They help you understand the financial implications of business decisions, provide tax planning and preparation services, and generate financial statements like balance sheets, income statements, and cash flow statements. Accountants are also well-versed in tax laws and regulations, which allows them to provide valuable advice on tax-saving strategies.
Generally, it’s a good idea to engage a bookkeeper from the very beginning of your private practice, as consistent and accurate record-keeping is essential for tax compliance and informed decision-making.
As your practice grows and your financial management needs become more complex, you may want to consider hiring an accountant to help with strategic financial planning, tax preparation, and to ensure that your business is taking advantage of all relevant tax benefits and remaining compliant with laws and regulations.
Full-service CPA firms like GBA LLP also offer in-house bookkeeping services. This means you can access a wide range of financial services under one roof, which can save you time and effort in coordinating between multiple professionals and ensures that your bookkeeping and accounting records are seamlessly integrated.
Even with good support from a bookkeeper and accountant, it’s important to build an understanding of your business and its’ financial health. Typically this means tracking revenue, expenses, cash flow and specific key performance indicators that are specific to your practice. Regularly monitoring these numbers helps you identify trends, understand impact of your business decisions (i.e. marketing or cost-savings efforts) and assess whether you’re on track to achieve your financial goals.
As your private practice grows and evolves, you may consider transitioning from a sole proprietorship to a corporation. Incorporation offers several advantages, including limited liability protection and potential for tax savings, but also comes with additional responsibilities and costs.
There’s no one-size-fits-all answer, as the decision depends on factors such as your income level, risk tolerance, and long-term business goals. Before making a decision, it’s crucial to consult with a legal and financial professional. They can help you evaluate the pros and cons of incorporation for your specific situation and guide you through the process if you decide to move forward.
Effective financial management for any business involves monitoring your income and expenses, setting and tracking financial goals, and making informed decisions based on your business’s financial performance.
For practitioners like SLP’s, typical growth milestones involve growing from a one-person operation to a practice with additional employees or contractors and office space. For these types of decisions, determining a budget is key. Consider your current business size and projected growth and evaluate your requirements for physical space or skills on your team. Research your options and be aware of legal and tax considerations, particularly when hiring a contractor or employee.
As Trevor and Meagan discussed with these practitioners, by applying these strategies and tips, it creates a strong foundation for your private practice, minimize risks, and foster long-term success.
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This blog is not meant to provide specific advice or opinions regarding the topic(s) discussed above. Should you have a question about your specific situation, please discuss it with your GBA advisor.
GBA LLP is a full-service accounting firm in the Greater Toronto Area, but we primarily service all of Ontario as well as the rest of Canada virtually, except Quebec. Our team of over 30, provides Audits and Reviews of financial statements, and Compilations of financial information, as well as corporate tax returns. We provide specialized corporate tax and succession planning for small and medium businesses, in addition to general advisory services.
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