payroll

Batch accounting and Real-time accounting the Spire Way

For a long time now, real-time accounting versus batch-based accounting has been a subject of debate. In this blog, we explore the benefits of each. We will also explain how Spire offers batches in some places and real-time accounting in others.

Batches

Batch-based processing has several advantages. In classifying entries to ensure accuracy, having better internal controls allowing a review before posting, and  in preserving the audit trail’s integrity. Batch-based accounting also makes sense for organizations processing large numbers of transactions. In some ways, batches are more efficient and easier to perform. Batches make sense when accumulating employee time and processing payroll altogether. This process allows for time saved in payroll. In the AR, depositing one cheque (or payment) at a time can be rather cumbersome. Unless it’s one big cheque, we are not likely to see bookkeepers making one deposit at a time, but rather a batch of many deposits at once. For organizations with no immediate need for information, it is reasonable to delay data processing by using batch-based accounting.

Realtime

While in some cases, batch-based may allow for a more efficient and audit-tight way of processing accounting data, it also presents some disadvantages.  More and more businesses need the ability to take immediate action on items that are crucial to their business. For example, purchasing managers at the mercy of a batch-based system would find it counter-productive to wait until batches post to provide inventory reports. Knowing that the need for real-time data isn’t just for the finance people, these businesses end up spending more of their budget for add-ons to increase access to their data in real-time. In this scenario, real-time accounting is better suited.

Keeping track of every transaction as they happen gives department heads an instant view of their overall financial status. Thus enabling decision makers to make more accurate projections. Being able to filter and compare using real-time data means companies can keep a close eye on margins and identify areas that need improvement. We see this in adjusting product prices like landed costs (duties, shipping, etc.). This fucntionality ensures accuracy of margins and profits per item, empowering an organization and keeping them one step ahead of the competition.

Which process is right for your business?

Accessing and understanding the data that makes up your debits and credits is critical to growing a business. Data isn’t just a way to analyze numbers; it’s a helpful way to react to growth potential when the opportunity arises. It also potentially prevent risks that have yet to happen.  Mining meaningful data contributes to the company’s success, however when data isn’t processed the best way, it can be destructive. Especially when attempting to achieve your reporting requirements.

To summarize, with batch-based processes we analyze data over time:  weeks, months, quarters, or years; for some, that process works just fine and is preferred.  Real-time data is crucial for those needing to make fast decisions in fiannce and that extend beyond the accounting department.

The Spire Way

Spire offers batches in some places where it makes sense. In Sales Orders, you can choose to batch or live post when invoicing.  With batching, the invoices are held in a closed state until a supervisor reviews, makes any needed changes and then creates a batch.  Next, they would close the batch to post to AR and the GL.  With live posting, the invoices are posted to AR and the GL right away.  If changes are needed then a credit and rebill has to be done. Batch and Live processing in Spire are also available in Accounts Payables and Accounts Receivables and Payroll Timecards.

You can easily manage batch-based vs. live posting in Spire’s company settings. Learn more about Spire’s company and user settings by watching this webinar, where we also many other cool features.

Bottom line: Spire allows you to run your business the way you want – whether that be live posting or batch accounting, we can accommodate your process.

For more information on how Spire offers your choice of batch-based accounting or real-time accounting along with business intelligence reporting, click here. We’ll be happy to provide you with a free demo and help you further discover the power of Spire.

Canadian Government COVID-19 Assistance Programs

In 2020, the Canadian Government offered several assistance programs. This blog post outlines some of what was available and how to apply for them and we will take a look a look at how you can manage payroll subsidies in Spire. 

Note: This information needs to be confirmed by the company that applies to these programs. It would be best if you determine your eligibility for each program offered. We are only showing you where you can apply. 

The link below is from the Canadian Government and has several program offerings for your business to consider during the COVID-19 pandemic. It includes information for individuals as well. We don’t cover personal information in this blog post and always recommend you get in touch directly with the Canadian Government for clarification. 

https://www.canada.ca/en/department-finance/economic-response-plan.html

Canadian Government 10% Wage Subsidy

Click this link to determine eligibility for the Wage Subsidy being offered by the Government of Canada,

Organizations who manage payroll can qualify for 10% back on gross payroll and up to $1,375 per employee and a maximum of $25,000 per employer.
It is available for payroll dates of March 18, 2020, to June 19, 2020, at the time of this writing (April 27, 2020).
To claim it, the employer can reduce the amount of their payroll remittance for the period. Spire 3.4 has a built-in calculator that uses all the rules that CRA put in place to ensure you get the maximum due. See instructions below on how it works.

Spire’s Payroll Subsidy Calculator

Suppose you are claiming the Temporary Wage Subsidy for Employers. In that case, the source remittance will automatically reduce the payment to CRA for the eligible amount and post it to the GL account setup in company settings -> Payroll -> employer -> Temporary Wage Subsidy Revenue Account.

First, create a GL account for the subsidy income. Second, you will then want to add that GL account as indicated below.

 

When you submit the payroll deductions, Spire will calculate the subsidy and post it to this GL account.

 

Spire will post the subsidy amount to the Subsidy income account.

$40,000 Interest-Free Loan

The Canadian Government is lending businesses $40,000 for ongoing expenses, including payroll. See this link for more details.   https://ceba-cuec.ca/

You can apply for this loan through your bank.

This example shows how to apply through Royal Bank (RBC)

What is and How to Apply for the Canada Emergency Business Account?

For a business to be eligible for the Canada Emergency Business Account (CEBA), per the Government of Canada’s requirements, the organization must meet specific criteria, including (but not limited to) the following:

  • RBC is your primary bank for business banking.
  • The RBC business deposit account you opened was before March 1, 2020, is active and in good standing.
  • Your organization was registered and operational on or before March 1, 2020.
  • Your organization is not a holding company.
  • Has total employment income paid in the 2019 calendar year between $20,000 and $1,500,000?

To enroll for CEBA, log into your RBC Online Banking for Business:

  • Those eligible will already have an email or link to apply on your My Accounts page.
  • If you do not have online banking, click here to enroll in RBC Online Banking for Business.
  • If you are an RBC Express client, don’t hesitate to contact your RBC Account Manager for separate instructions to register for CEBA.
  • Please note that the CEBA enrollment cannot be fulfilled in our branches or through our advisors and RBC Advice Centre.

Click on the ‘Learn More’ box that looks like this.

Follow the instructions for the bank, and if you are approved, a new line of credit or credit card will appear in your account with a $40,000 limit..

75% Wage Subsidy

As of April 27, you can log into your MyBusiness site to apply for a 75% wage subsidy. Use this link to log on  https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/business-account.html

This subsidy pays out to businesses that have seen a drop in revenues, as defined in the link below.
https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html

The link includes a handy spreadsheet to assist with the calculation. Be sure to check back for the latest version as these are constantly updating.

https://www.canada.ca/content/dam/cra-arc/serv-info/tax/business/topics/cews/cews-calculation.xlsx

Once you have calculated the amounts go into your MyBusiness account and select payroll -> Canada Emergency Wage Subsidy (CEWS)

 

You then will want to make sure you select the correct reporting period because this is a required step. See our image below:

 

Fill in the amount that you have calculated manually or with the included spreadsheet.

 

Add your contact information and click on “Submit.”

NOTE: Make sure you have a direct deposit set up with the CRA. A mailed cheque adds a considerable delay.

 

For more information about how Spire manages payroll and sign up for a free demo click here.

Need More than Basic Accounting Software?

Having basic accounting software is fine for a new business startup, but you’ll need a complete solution as your business grows. Expanding businesses require software that can handle a flood of invoicing, and a large payroll. As taxes become increasingly complicated, management needs more detailed reports in order to create a budget for the upcoming year. A complete accounting software package is needed to ensure the successful running of your company.

Generally, accounting software will include modules that smaller businesses need, such as general ledger, accounts payable, accounts receivable, and payroll tools. The software should also be able to produce standard reports and income statements. There may be options to filter and track custom data fields as well. While this software is great for the new business start-up, something more advanced may be required for an established business.

The best accounting software should have more advanced features. Reporting and analytics are important for a larger firm. Some programs include preconfigured reports. These can easily be altered with custom data fields. Customized reports can be produced as required. With good accounting software, detailed analytics can be made so that your business can be taken to the next level. Management will be able to assess which ventures to focus on. Accounting software should be able to quickly generate reports and statements, sorting through data to find pertinent information.

Most accounting systems will manage the payroll, whether an employee is hourly, salary, or commission-based. An accounting system will accurately calculate the taxes due and keep track of them for each employee. More advanced systems can handle either cheques or direct deposits, as well as providing yearly tax forms. The more employees you have, the more likely you will need a complete accounting software solution, rather than trying to work around your basic accounting program, which can lead to frustration on the part of your accountant.

If you have a large online store, or brick and mortar shop, chances are that at some point, you’ll need advanced business accounting software tools. Every aspect of your inventory can be electronically managed. It can manage purchase orders, including receiving POs, track all shipping, and recommend reordering stock. Intricate details can be managed such as history, bill of materials, serial numbers, and even bar coding.

Good accounting software will be adaptable to your business’s needs. Basic accounting software will only be able to handle the payroll for a limited number of employees. Good software should not be obsolete when you have 200 more employees. It should scale up to your requirements. Software may be available for your specific industry, organization, school or government branch.

It’s also important that accounting software allow for multiple users. More than one employee should be able to use the accounting software. Nothing is more frustrating than having one employee enter data, while someone waits over their shoulder for them to finish. Productivity and time can be lost while one employee waits for another one to complete a task. Search for software that allows several users to access it at any given time.

Look for accounting software that provides a variety of add-on modules, as well as working with other third-party software systems. Document managers, time-clock software, expense tracking and other solutions may be warranted. Credit card processing, as well as data backup management of accounting data may be required. When you have all your software working together in one package it’ll increase productivity. If you’re currently using multiple software packages you may you’re wasting a lot of time importing data from one software to another. A good accounting software package will streamline your data all into one accessible location.

A comprehensive accounting system should handle more than the basic tasks. You need a complete accounting program solution that includes reporting, payroll, and inventory control. Also look for packages that are adaptable as your business grows, whether through additional modules, or unlimited usage. A good accounting software package will grow with your business, helping you to maximize business profits.

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