How Do I Change Accountants?

Whether for your personal finances or a business, employing an accountant is first and foremost a relationship. Just like in our private lives, professional relationships have their ups and downs– they also evolve over time. You may find that you employ several accountants over time, which is normal for both you and the financial professionals. Keep reading for Liu & Associates’ guide to when, why and how to handle this kind of change.

When or why would I change accountants?

People change accountants for many reasons. You may be simply dissatisfied with the level of service you received– but more likely, your needs have evolved beyond your accountant’s specialization. Just so, your accountant’s scope may have changed to a point that your needs are difficult to prioritize. Either way, this decision is usually not personal! If you are dissatisfied, it can be valuable to discuss this with your current accountant before severing the relationship.

How do I cut ties with my current accountant?

So the time has come: your first step is to inform your current accountant that their services are no longer needed. If at all possible you should stay on good terms, but your new accountant can communicate on your behalf if necessary. Your current accountant should then forward a disengagement letter— the professional document that outlines important information and dates related to your finances.

How do I transfer to a new accountant?

Firstly, your new accountant should provide you with a letter of engagement– the outline that establishes the parameters of the professional relationship. Once they acquire professional clearance, your new accountant can proceed with registering your info, assessing your file and setting out their financial plans moving forward. Always negotiate fees and finalize other major decisions before you authorize any financial professional.

The above three entries only summarize the process of transitioning your accountancy services. Be sure to use due diligence any time you make a choice about your finances, it can have serious consequences. Questions? Concerns? Contact or visit the pros at Liu & Associates today!

3 Misconceptions About Accounting & Accountants

We see it all the time from corny comic strips, bad movies, and hacky stand-up comedians– if you need a boring job to make fun of, go after the accountants! Most people perceive accounting as a dull ocean of cubicles, filled with bespectacled pencil pushers that love nothing more than using an abacus. In truth, accountants are as diverse and multifaceted as professionals across all industries. Keep reading for three of the most common stereotypes about accounting and accountants, then educate yourself with the truth from the pros here at Liu & Associates.

I know math– I can do it all myself!

First of all, accounting is more than just math! While arithmetic skills are essential to a good accountant, the real strength of financial professionals is organizational skills, analysis, and logic. In fact, complicated maths like calculus are rarely, if ever, used in the industry. Additionally, beware the promises of do-it-yourself accounting services and software– they can give you a false sense of security that might lead to costly errors or omissions.

Accounting is expensive, only big businesses can afford it

The fact that big businesses all have accountants means one thing: they understand the importance and value of proper finances. Anyone can benefit from accounting– no matter the size, scope or scale of your needs. While it is true that not every accountant is right for you, that is why there is such a wide range of services available. From affordably basic to fully custom-tailored, there is a financial professional that suits you!

Accountants only fill-in spreadsheets and file taxes

As with most of these misconceptions, there is a grain of truth to the myth. Yes, spreadsheets are critical to accounting and any good accountant knows their way around a tax return. Ultimately though, spreadsheets are just a tool– only the talent and skill of a financial professional makes them sing. Likewise, filing taxes is merely a cherry on the top of the long list of intricate finance and business decisions influenced by accountants’ advice.

You may have believed some of the misconceptions and myths above, but hopefully, this article has helped clear the air. Questions? Concerns? Contact us at Liu & Associates today!

Why Do Home Builders Need An Accountant?

From large corporations to small boutique brands, one universal factor for home builders is that their finances can be quite complex. Most employ accountants or accounting firms but some may not understand how crucial these are in the construction industry. If you are curious why home builders need accountancy services, read on for Liu & Associates guide to this complicated issue.

Real Estate & Construction Accounting

Selling real property and constructing or renovating a property are viewed as distinct industries when it comes to finance. Though they share many fundamentals with general accounting, each makes use of different types of reports and strategies.

Contractors & Temporary Employees

The widespread use of contractors and temporary employees in construction makes its accountancy contrast with other fields. When building or renovating a property, a variety of skilled labourers will likely add to the final project– though very few, if any, will be on-site for the entirety. Construction accounting must accommodate and keep track of each worker and their contribution.

Mobile Industry

Construction involves vehicles, equipment, materials, temporary staff and many other dynamic variables. This can be difficult to manage financially without a reliable construction-focused accountant or accounting firm. With this many moving parts, traditional bookkeeping tends to fall short of the comprehensive understanding provided by construction accounting.

Percentage of Completion

As stated above, construction projects require input and effort from many different employees or contractors. The value each contributes must be determined against the final estimate– also known as “percentage of completion.” A good construction accountant can avoid expensive missteps and costly errors when determining this essential element.

GST & Home Construction

Most Canadians know that Goods and Services Tax (GST) is applied to all transactions and construction is no exception! There are intricate rules that determine whether or not you are responsible for the GST. Building, renovating, buying, selling– the definitions and GST responsibility vary between each of these situations. Construction accountants can help decode these complexities and avoid harsh fines or penalties.

As you can see, there are many areas where an accountant specialized in construction can help a home builder navigate the financial waters. Ignoring or forgetting these factors can be extremely expensive, so contact or visit Liu & Associates today! Our firm has years of professional expertise that can aid you, no matter your goals or industry.

BOOKKEEPING vs ACCOUNTING: What’s the Difference?

When it comes to tracking your business’ income, spending and other financial realities, it can become overwhelming if you are not prepared. To accomplish this daunting task, many business owners and operators begin looking into bookkeepers and accountants. Whether independent, part of a firm or hired on to the business itself– bookkeeping and accounting can be completed in many different ways. The question remains: what’s the difference? Read on for Liu & Associates guide to these two different types of financial services.

What does a bookkeeper do?

Also known as record keeping, bookkeeping includes but is not limited to tracking daily transactions, creating invoices, maintaining payroll and ultimately building a foundation of clear, concise financial records. The scope of bookkeeping depends on the size of your business and you may or may not require dedicated staff to complete these tasks.

What does an accountant do?

Accounting consists of everything a bookkeeper would do, but widens to include more high-level financial advice and analysis. An accountant may complete any of the following objectives: financial impact statement; future projection of performance; tax filing and strategy; operational cost prediction or adjustment; and many others. Essentially, an accountant takes the specific data collected by bookkeeping and produces a more general, bigger picture.

What service is right for me?

This could be a challenging question if your business is in transition, but often you can make a decision based on the size and scope of your endeavours. Often, sole proprietorships and partnerships start out with the individual(s) handling their own bookkeeping services. As small businesses grow, a third party or part-time bookkeeper can be employed– but some may even skip this step and bring on an accountant, especially if the business is growing quicker than expected.

As you can see, the line between accounting and bookkeeping is quite distinct. Often a business owner will know what level of assistance they require on an instinctual level, even before interviewing potential services or employees. If you have any questions or concerns about this issue, contact or visit Liu & Associates today!

Why You Should Consider Hiring an Accounting for Your Startup

Many startup owners will choose to manage their own accounting in order to save money wherever possible. However, if you aren’t experienced with business accounting, you could be making mistakes that could potentially affect the success of your business. Read on to learn how outsourcing your business accounting can save you time and stress.

What Can an Accountant Help With?

Accountants can offer their expertise at all business stages, from starting up to expanding.

Business Formation

During your startup’s early days, an accountant can help you with steps like:

Selecting the proper business structure from a tax and legal perspective
Setting up your expense tracking procedures
Helping you establish a startup budget
Advise on financial planning
Setting up invoicing systems

Day to Day Administration

There are a lot of financial responsibilities when it comes to running a business. Having an accountant can help you with things like:

Payroll
Tax preparation
Reconciling bank statements
Managing audits
Accounts payable & accounts receivable

Expansion & Growth

When it comes time to grow and expand your business, your accountant can help with:

Financial forecasting
Budget creation

When Should I Hire An Accountant?

Exactly when a company decides to bring on an accountant varies greatly. While there isn’t one correct answer, here are a couple of instances where it’s highly recommended you hire an accountant:

You have raised an initial round of funding. If you have raised a Series A, a larger SEED round, or a larger convertible debt round, it’s definitely time to reach out to an accountant.
You’re starting to see a significant increase in your expenses. Once you start having increased expenses to keep track of, or start hiring employees, it’s nice to have an accountant to help you keep track of your finances.

Other Reasons You Should Consider Hiring an Accountant for Your Startup

You’re Busy

If you’re currently operating your startup as a one-person show, you have a lot of different roles to play! Outsourcing some of your work to an accountant will make your life easier, and ensure that your finances are being taken care of properly.

Investors like Accountants

Investors are looking for more than a good pitch, they want to see the numbers to back it up. Having an accountant on your team will be an invaluable resource when it comes to creating a solid financial report.

Even if you have the best business idea, your company is going to have a hard time succeeding if you aren’t properly managing your finances. Gain some peace of mind knowing that your business’ financials are in the safe hands of an experienced accountant. If you’re looking for some help with your corporate accounting, contact the team at Liu & Associates today!