James D. Peros C.A. C.P.A

Pooled Registered Pension Plans (PRPPs) Small-business owners and the self-employed now have a new pension plan alternative. How the PRPP Works Federal Pooled Registered Pension Plan legislation came into force in 2012. It is designed to provide a retirement savings option for the self-employed and businesses that do not have an employee pension plan. It is attractive for those companies that cannot afford the cost of administering an employer-sponsored plan or a company RRSP, and do not want the fiduciary liability that may accompany such a plan. The contributed funds will be placed with a financial institution such as a bank or insurance company that will pool the small contribution amounts to be invested more efficiently and cheaper and obtain a better return on investment. This federal plan covers only employees in federally regulated industries, federal government employees and employees in the territories of Nunavut, Northwest Territories or the Yukon. Each provin...

Banking for Your Future When starting your own business, set up the right financing arrangements at the beginning. Starting your own business can be the beginning of one of life’s great adventures. You have the core idea and the confidence, but what about the money? Certainly, it would be great to have sufficient personal funds for the initial investment, but for many people starting out in business, that may not be a reality. It is also understandable that you are reticent to ask friends or family for a loan or an equity investment in the event that the business goes south. Find the Best Source for Your Financing “A bank is a place that will lend you money if you can prove you don’t need it.” So said Bob Hope, a last-generation stand-up comedian. An astute cash flow manager needs to consider the range of loan services offered by financial institutions to assist a start-up business and ensure a continued flow of working capital as the business grows. Experie...

The High Cost of Distracted Driving Employees who drive while distracted create substantial financial and other risks for their employers.  Distracted driving laws are now the norm in all provinces within Canada. Of the three territories, Nunavut is the only holdout. In addition to levying fines, the majority of the provinces and territories have imposed demerit points. Even with fines and demerit points, many drivers are not convinced that distracted driving affects their ability behind the wheel. A March 3, 2014, news release from the Ontario Provincial Police stated:  In 2013, distracted driving fatalities surpassed both impaired and speed related fatalities in fatal motor vehicle collisions investigated by the OPP. A total of 78 people died from distracted driving-related crashes compared to 57 deaths in impaired driving related crashes and 44 people who died in speed related crashes last year.  Both owner-managers and employees should be concerned about these f...

What If You Can’t Be There? Choosing someone capable of running your business in an emergency should be part of your business plan. We all like to think we are invincible masters of the universe. Unfortunately, since the reality is that our fate can hinge on something as trivial as a slip on the ice, have you considered all the urgent issues that would come up if you were suddenly incapacitated? Someone to Take Over Every business should have a second in command. You, as an owner-manager, should ask yourself: “Who has the capacity to run the business if I am absent for a prolonged period?” If no one comes instantly to mind, you should think of either training or hiring someone with this ability. If you think there is someone who could do the job with a little training, start mentoring them and have them shadow your everyday activities. Your staff, as well as your clients and suppliers, should be familiar with this person and know of the trust you place in them by ensu...

Small-Business Fraud Be vigilant: undetected fraud can destroy your business. According to the 2012 Report to the Nations on Occupational Fraud and Abuse of the U.S.-based Association of Certified Fraud Examiners, privately owned businesses with fewer than 100 employees are the most common victims of fraud; the most common type of fraud is the fraudulent billing scheme. According to the Association, between 40% and 50% of all victim organizations, no matter what their size, do not recover any of their losses. Fraudulent Billing Schemes False invoices are printed and presented using the name of a legitimate supplier but with a different address to direct the payment to a place where the fraudster can access the funds. Unfortunately, electronic payment systems make it possible to set up such accounts easily. Owner-managers may not pick up on the change because they only approve the invoice for payment and leave the actual electronic payment to the accounts payable clerk.   Pay...