Image by: The Musicians Blog
Featured Speaker: Colleen Pikula,bookkeeper
Accounting tells a story, it tracks progress, and can answer questions.
- Can you afford to do something?
Is music a business or a hobby?
- A business requires a reasonable expectation of profit.
Bookkeeping/ Tracking money
It can be as simple as listing things on a sheet of paper and keeping all receipts in a folder, but the important thing is to find a system that works and do it consistently to stay organized. Don’t just throw crumpled receipts in a bag.
Accountant Tip: Have a year end folder to keep everything in one place
- Two most important things to track:
- Writing down all revenues coming in: track total at year end
- Expenses: anything that helps you earn an income are claimable
Those two things will be asked for by any accountant or Revenue Canada
Accountant Tip: Have a separate bank account
Expenses that fall in between work and personal, i.e phone, transit
- Itemize things when keeping track of expenses
- Give accountant totals- you can write off a portion (i.e using your cell phone 20% of the time for business)
- Have a travel log: keep metro passes, gas receipts, repair receipts
- Driving: keep track of number of kilometers- how many total and how many were specifically for business purposes
- Don’t depend on solely VISA receipts
Writing off food
- You can write off taking people out for food and drinks if it is for business purposes
- Don’t only keep receipts- make sure they’re detailed
- State the purpose of the event on the back of receipts I.e taking John out for drinks to convince him to join the band as a drummer
- If you earn 30,000 in GROSS income not net, you are obligated by the government to register for HST, if you do not they will register you automatically
- The moment you register for HST you are required to charge HST- put HST # on bottom of invoices
- Remember that HST isn’t set up to benefit you, it is to benefit the government. Follow the process required by Revenue Canada or they will make your life difficult.
- You keep your HST number for at least a year, during that time, it does not matter how much you make in profits, you are still required to charge HST and remit
- If you take the initiative to contact Revenue Canada and let them know during what month you will go over 30k in revenues, they will only charge you HST as of that point
- If you do not let them know and they do it automatically, you will be charged for the whole year
- Keep track so you can call and register
Know when to ask for help: invest into spending time with a certified accountant to ask questions, don’t chance anything. When it comes to HST, get proper advice from the start.
Other: determine whether or not you are a partnership or a sole proprietorship, if you are a partnership, you will be taxed on your percentage of ownership in the group
Always keep notice of assessment that you receive form government