HEATHER PETERS: ACCOUNTING IN CANADA FOR PRIVATE PRACTICE | EP 57
Why should you invest in a business accountant? Have you used online accounting services in the past that have ultimately cost you more money and time?
Numbers can be tricky, even for someone experienced, and especially for someone new. If you are running a Canadian private practice, consider hiring someone professional to take care of your numbers so that you can focus on what you do best: your clinical work!
In this podcast episode, I discuss everything accounting with Heather Peters for a quick 101 lesson on the staples, and how you can set up your accounting system so that your sleep-at-night factor is secure and comfortable.
Jane is an all-in-one health and wellness practice management platform designed to be helpful to you, no matter how or where you practice. Available online and on any device, Jane offers branded online booking, beautiful scheduling, insurance management, customizable charting, online intake forms, patient reminders, integrated payment processing, online appointments (telehealth) and more! Use the code FEARLESS at signup to receive your first month completely free!
MEET HEATHER PETERS
Heather Peters worked as a Controller/Accounting Manager and post-secondary educator for almost 20 years before founding her business – Brightside Accounting Services. Her experiences include leading high-performing accounting teams; budgeting and forecasting; process improvement and teaching and training. Heather works with start-ups, small and medium-sized businesses who need part-time accounting services, controller-for-hire experience, and/or training in accounting to help their workflow better. Heather has an MBA from Saint Mary’s University and holds a CPA designation.
In This Episode
- Why you should consider a business accountant
- What you need to know about income tax and sales tax
- Sole proprietor or incorporate?
- Some good tax habits Canadian private practitioners can develop
Why you should consider a business accountant
Having an accountant is like having a doctor for your business. When you go to the doctor, you will most likely see a specialist if you have particular questions or concerns. The same goes for your Canadian private practice!
A business accountant is a specialist that can help you in more subtle and fundamental ways than any general business financial consultant.
‘It’s [about] having people in your corner that you can talk to whether it’s a bookkeeper or an accountant, some certified or not certified, as long as they’re competent and you can communicate with them and that everybody understands what’s going on.’ – Heather Peters
What you need to know about income tax and sales tax
‘A lot of people get in trouble with that because they’ll take the money that they have coming in, they’ll pay their bills, and they’ll kind of forget about the personal taxes … or corporate taxes, and the sales tax.’ – Heather Peters
If you don’t actively keep track of your sales tax, you may get a fright at the end of the tax year. Avoid this by actively sorting it when you receive your monthly income.
You have to be disciplined and proactive. Take the initiative and put your taxable income (including sales tax) into an account whenever you are paid so that you have the right funds for when it’s time.
‘With income tax and sales tax, it’s really important to talk to your accountant about it. Get a game plan in place [by] either keeping it all in one account and making sure that your accountant is aware of how much you’re spending … or get free mini accounts.’ – Julia Smith
Sole proprietor or incorporate?
The main reason why people incorporate is due to liability. If you are incorporated, the responsibility falls on the business, and not on you personally.
Additionally, when you start hiring clinicians and admin staff, consider incorporating because it’s a lot of work and the incorporation pays taxes based on income.
‘If you want to grow and maybe you’re thinking of owning a building and selling your business at the end of your career, it’s really important to incorporate, and potentially do that sooner.’ – Julia Smith
Some good tax habits Canadian private practitioners can develop
- Keep your receipts for 7 years (the current year plus six). Take photographs and store those to make sure all the information is legible and easy to decipher.
- Have the private practice business HST number
- Keep your sales income tax numbers up to date – Jane App helps you to keep a yearly sales report for your accountant!
- Keep track of your bank statements
- If you have a car, keep track of your mileage too!
- Write the name of the person you had a business dinner with on the receipt
‘[Upping to 35%] definitely sucked that year in the sense that my income didn’t increase because I started to put more [of my] income into that [tax] savings, but the sleep-at-night factor is so sweet! And just to not have to worry now if I will be able to afford to pay my taxes each year is just awesome.’ – Julia Smith
Connect With Me
Resources mentioned and useful links:
Learn more about the tools and deals that I love and use for my Canadian private practice
Sign up for my free e-course on How to Start an Online Canadian Private Practice
Jane App (use code FEARLESS for one month free)
Listen to my podcast CCPA episode!
Julia Smith, MEd, RCT, CCC, is the owner of Fearless Practice. She specializes in consulting with Canadian counsellors and therapists who want to start a private practice. She also owns a private practice in Halifax, Nova Scotia where she helps teenagers and adults who want to be confident and happy but are feeling weighed down by anxiety, stress, and depression. She also blogs for the Canadian Counselling and Psychotherapy Association. You can read more articles about Canadian counselling and psychotherapy at www.ccpa-accp.ca/blog/.