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In November 2002, I incorporated my business. My company sells professional writing and editing services. I am the only full-time employee on the payroll; however, my company also uses subcontractors. As a self-confessed form-a-phobic, initially, I found the paperwork more than just a little daunting. My accountant advised me to keep a binder. Here’s what it now contains.
The binder itself is a one-inch three ring binder. It’s blue. I also invested in a three-hole punch.
Tab 1 has a clear plastic envelope. It contains forms mailed to me from Canada Customs and Revenue Agency (CCRA) that I haven't filled out yet, and the return envelopes with clear plastic windows. Typically it holds one Good and Services Tax / Harmonized Sales Tax (GST/HST) Return for Registrants (the pink form) and one Statement of Account for Current Source Deductions (the green form).
Tab 2 contains signed contracts, subcontracts, and non-disclosure agreements. My contracts contain a detailed statement of work, and key dates for each project. Sometimes clients and I come to a mutual agreement to change dates at their request after the contract has been signed. As I note changes in the binder, I check the other contracts for conflicts and take action to pre-empt or otherwise resolve them.
Tab 3 contains unpaid invoices. I typically invoice clients monthly on the last business day of the month, typically with terms net 30 days. Regular invoicing helps regulate cash flow. Each invoice contains a return address, the client's address, the date of invoice, the terms net 30 days, a brief statement of the work, the person who received the work, the hours, the rate per hour, the GST, the total amount payable, the payee, and the GST number that was issued to me by CCRA.
Tab 4 contains paid invoices, and the date that they were paid. Tab 4 is my favourite tab.
Tab 5 contains copies of pink forms (GST) that have been sent to CCRA, as well as the letter from CCRA that contains my business number and the phone number for CCRA questions.
Tab 6 contains printouts of every payroll deduction. There is one page per employee per payroll. The title at the top of the printout is Tables on Diskette. Payroll and deductions are calculated on a monthly basis using software provided by CCRA. These are the Payroll Deductions Tables (T4032), and they are also available from the CCRA web site at www.ccra.gc.ca/payroll.
I write myself a paycheque on a monthly basis. It was not immediately obvious that I would need to write expense cheques first before writing paycheques. I track expenses in an Excel spreadsheet. Longer term, that spreadsheet will include how the actual expenses compared to budgeted expenses. Supporting receipts still go into a shoebox for the accountant. Since I have incorporated my business, I keep a separate bank account and credit card for it. I still incur expenses directly, and issue myself an expense cheque monthly.
Tab 7 contains all the forms related to the incorporation of my business, the certificate of incorporation, and my share certificate. My company is privately owned and operated. I issued myself 100 shares on the date of incorporation.
I took the binder with me and my business plan to secure a line of credit to expand the business after its first year of operation. It was approved.
Tina Walsh is the President and Founder of Read Pen Inc. Read Pen draws on a dynamic talent pool to offer just-in-time technical writing and editing services and measures quality by customer satisfaction.
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