New technology has made a big difference in how many of us run our businesses.
However, there are a lot of benefits a few technological upgrades can make.
Changes as simple as updating bookkeeping software or as big as computerizing an entire production cycle can improve the bottom line.
Here are a few ways technology can help small businesses.
Save time, money on bookkeeping
Many of us have realized the benefits of online banking by being able to access account information instantly, any time of the day.
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However, a lot of us don’t know online banking can also save time when doing bookkeeping.
Account information can be imported directly from an online bank or credit card account to bookkeeping software or a spreadsheet.
The risk of errors and the cost of bookkeeping are greatly reduced because transactions are recorded directly and not retyped.
As well, automating the entry process saves bookkeeping time.
Online banking also provides a to-the-day update on accounts funds, which allows you to track up-to-the-moment cash flow and make more timely and informed business decisions.
Run your business from anywhere
Computer equipment and software are better, cheaper, faster and more accessible than ever before.
New mobile computing technologies, such as smart phones, tablets and ultra-thin laptops, allow a business to be managed from almost anywhere. Bills can be paid, e-mails sent, documents reviewed, supplies ordered and sales approved, all while you are on the plane to your holiday destination or out in the fields.
Technology costs can work for you
Cost is a worry when upgrading. Investments in technological equipment and software are treated differently from an accounting and tax perspective, depending on the item.
The government has started allowing the majority, if not all, of hardware and software costs to be deducted in the year the funds are spent.
This means that if your operation is having a good year, it may be time to invest in new gadgets to keep the business up to date.
But what if you are on the forefront of technology? What if you are not only using technology, but adapting it to fit your farming needs?
The government offers a special input tax credit for businesses that invest in developing and creating new equipment and technology.
Now, many of us would not consider ourselves to be high profile inventors like Thomas Edison, but you would be surprised what the government considers to be sufficient product development to qualify for the tax credit.
Ask yourself the following to determine if there is a chance an equipment modification or invention that you made for the farm would qualify:
• is the technological advancement not available to the public?
• does it drastically or incrementally improve your production process?
• did you create the item to solve a
problem you had with your operations?
• did the development of the product require you to invest significant capital?
You could be eligible if the answer to any of the questions is yes. However, the rules surrounding this input tax credit are detailed.
Specific forms need to be filed with the government that requires you to include detailed descriptions and explanations.
You should seed the assistance of an experienced adviser in scientific research and development before proceeding with a claim.
Colin Miller is a chartered accountant and senior manager in KPMG’s tax practice in Lethbridge. Contact:
