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Posted by on May 30, 2014 in Blog, Finance & Money | 0 comments

The Cheapest Vehicles To Insure

While you would never choose to purchase a car based only on its insurance cost, that particular factor might be more important than others when you are narrowing down your choices. Certain categories of cars are cheaper to insure than others, and certain brands are more reasonable than others within the category. So it makes sense to understand these differences if you’re in the new-car market.

Cheapest Category to Insure

Small SUVs and minivans are the least expensive category of vehicles when it comes to insurance rates. This is because the category offers the best blend of repair costs (which affects the collision part of your premium), lower probability of being stolen (which affects the comprehensive part), driver and passenger safety (which affects the medical coverage part) and damage to other vehicles (which affects the liability part.)

Small SUVs and minivans are also likely to be driven by parents who are transporting children, and thus statistically less likely to speed, crash or file an insurance claim. In this way you benefit from the driving records of other people – when those owners file fewer claims, it carries over to lower the insurance rates of everyone who owns that vehicle.

Within the small SUV and minivan categories, Jeep is the number one manufacturer, with vehicles in 7 of the top 20 positions. These include the Wrangler, the Patriot, the Compass and the Grand Cherokee. Despite the commercials showing Jeeps in dramatic adventure shots, Jeep owners tend to be women under age 45 who are careful drivers.

Other vehicles on the list include the Honda Odyssey and CR-V, the Chrysler Town & Country, and the Subaru Outback.

Not as Cheap as You Might Imagine

Surprisingly, sedans are not as inexpensive to insure as you would expect. There are several reasons for this.

  • Cars tend to fare poorly in a collision with a non-car. Many vehicles on the road these days are SUVs or light trucks, which all ride higher than a car. In a crash, the higher vehicle will “ride up” on the car and cause immense damage to the car, while perhaps suffering very little damage itself.

  • Small inexpensive cars, in particular, are not cheap to insure. They tend to be owned by young people (less driving experience, higher chance of accidents) and they do not have as many safety features as more expensive cars (higher probability of driver and passenger injury.)

If you are making the decision for a family vehicle that has been narrowed down to a 4-door sedan or an SUV, you should examine in the annual insurance costs in addition to the other factors you are considering. Consult your insurance agent at a place like May-McConville Insurance Brokers Ltd for an idea of how much you would pay annually each vehicle, and let that help you decide which to buy.

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Posted by on May 29, 2014 in Blog, Finance & Money | 0 comments

Ways To Manage Your Company’s Financial Records

Owning a business comes with different types of financial decisions. You need to make sure that you keep your records organized and properly monitored to make them efficient. Learning different ways to simplify these records can help you identify key areas that need immediate attention.

Hire a Certified Bookkeeper

Unless you have a degree in bookkeeping or accounting, you need someone to monitor your financial records. A bookkeeper is one option, because they are goal orientated and they can handle the daily tasks of inputting and monitoring your accounts.

When you have to keep track of several accounts, you need someone who understands payroll forms, tax forms and banking information. One service they offer is to label each file and input all of your daily transactions, so you can always find the information you need.

Computerize Your Records

Even with the help of a bookkeeper, you still want a reliable and safe way to organize and categorize your records. Several computer programs use different techniques to categorizing banking records, payroll accounts, inventory and even receipts. These programs can also grow with your company, so you do not have to keep purchasing new programs each year.

It is best to have the bookkeeper input the information into the program, because they will know where to list each item. Some programs also have software that accepts internet receipts or scanned copies, which it then places into the file of your choice.

Additionally, many of these programs have daily reports, so you can verify the information that the bookkeeper puts into the system. You should also purchase a backup hard drive in case you have an issue with your main computer and you lose any of the data on that computer.

Reduce the Number of Financial Accounts

When you operate a company, it is tempting to have a large number of financial accounts. However, the more banking and investment accounts you have, the more time you spend monitoring and organizing.

If you have separate bank accounts for payroll, income and profits, you run the risk of placing money in the wrong account. By consolidating your company’s money into one account, you will have an easier time catching mistakes before they can cause you problems.

Some companies have multiple credit lines or credit cards, but this can also lead to financial mistakes. You can consolidate these accounts into one line of credit. This gives you one account that needs to be paid instead of three to four each month.

Maintaining your company’s financial records takes time and experience. Hiring a bookkeeper will help you avoid record keeping errors, while computer programs can help you stay organized. Using one or more of these options can be a good method for managing your company’s finances and records. Contact a professional consultant such as Ustac Tax And Accounting for more information. 

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Posted by on May 27, 2014 in Blog, Finance & Money | 0 comments

Should You File For Bankruptcy Or Submit A Consumer Proposal?

If you’re struggling financially and finding it difficult to meet your obligations, you might be wondering if you should file for bankruptcy. In Canada, you should immediately consult a bankruptcy trustee, who is licensed by the federal government to provide advice and service to people who need it. The trustee can help you figure out which path you should take.

Filing a Consumer Proposal

A consumer proposal is a formal document that the trustee and the debtor write together, which allows you to eliminate your debts and keep most of your assets. It provides a plan which repays creditors part of the money that you owe, making sure the payments are affordable for you.

With a consumer proposal, a creditor will get more than if you file for bankruptcy. So even if you offer only 50% (or less) of what you owe, with the trustee’s help, the creditor would likely take the offer because he will probably get nothing at all if you file bankruptcy.

When you have some cash-flow that will permit you to make regular payments to your creditors, then the consumer proposal route should definitely be a consideration.

Filing Bankruptcy

If your situation is more dire, and you don’t have any extra cash (beyond what you require for your basic survival), then bankruptcy might be your only option.

With bankruptcy you will permitted to keep a minimal amount of assets, but you may be forced to sell your cars or your home, if you have a substantial amount of equity in them. There are certain personal exemption limits that are established by state, which your trustee can help you understand. With a bankruptcy, you will have your debts erased, but you will be truly starting almost from zero with your new financial life.

The Trustee’s Job

The trustee is regulated by the government and is charged with certain tasks, of which protecting you is number one. They are highly trained as debt consultants and financial advisers, and they have no inherent bias to cause a conflict of interest. They are also held to a strict code of conduct by the government.

It’s the trustee’s job to give you financial advice. The trustee will evaluate all of your income, debts and assets, and help you determine what you can actually afford to do. Since everyone’s situation is different, it’s hard to make generalizations, but in most cases the trustee will try to help you keep your assets and avoid bankruptcy.

With a consumer offer, the creditors get some money and the debtor is left with some assets, and everyone benefits. So be sure to consult a trustee as soon as you can, and work out a plan that will leave you with less debt and a great deal of less stress and worry.

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Posted by on May 24, 2014 in Blog, Finance & Money | 0 comments

Issues To Consider When Establishing Payroll Costs And Employee Compensation

As a small-business owner, you have to work hard to pay your employees the right salary. If you pay too little, you will struggle to attract good employees, but if you pay too much, you won’t have enough money to run your company. When trying to set your payroll, here are some points you should consider:

Percentage of Revenue

If you devote a consistent percentage of your revenue to payroll, you can rest assured that your payroll won’t overtake your operating costs. The most successful businesses have payrolls that cost roughly 15 to 30 percent of their gross revenue, but you need to consult your small-business accountant to see if that model is right for your company. Keep in mind that benefits need to be factored into this equation as well as salaries.

Raises or Bonuses

If you base your payroll on your revenue, you need a way to give your employees extra money when your revenue is higher. If you experience an unexpected windfall, give that to your employees in the form of a bonus. However, if you believe that your revenues are permanently up, give all of your employees a raise.

Alternative Payroll Models

Instead of indexing your payroll to your company’s overall revenue, divide your employees into departments and make each department responsible for covering its own payroll. For instance, if you own a restaurant, the wait staff needs to cover their wages in drink sales and the kitchen staff needs to cover their payroll in food sales. If you own a shop, the employees in the shoe department need to sell enough shoes to cover their wages and so on through the other departments.

Alternatively, if you have direct salespeople working for you, consider giving them a nominal wage and commission. As they earn commission on each sale, their income automatically indexes itself to your revenues.

Getting It Wrong

Unfortunately, if you pay out too much in payroll, you won’t have enough operating capital on hand to run your company, and if you are stuck in a contract with your overpaid employees, your business could go under. On the other hand, if you underpay your employees, you won’t be able to retain them or attract new ones.

Whether you have just opened your doors or been in business for years, you should consider the above points carefully when setting your payroll. Work with your small-business accountant to determine that you are paying appropriate wages for your industry and your bottom line. For more information on small business accounting, visit Padgett Business Services


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Posted by on May 23, 2014 in Blog, Finance & Money | 0 comments

7 Things You Are Allowed To Keep When Declaring Bankruptcy

Not all assets are dissolved during a bankruptcy. In fact, there are quite a few items that you’re allowed to keep, as long as they don’t add up to a significant amount of equity; if the items that you want to keep add up to less than a few thousand dollars, you’ll usually be able to keep them.

1. Your Home or Home Equity

It may be surprising to learn that you can often keep the equity you’ve built in your home during a bankruptcy. Under certain situations, which can be discussed with a bankruptcy attorney, you may be able to keep your entire home. However, this would only be true if you own your home outright.

2. Work Tools

Equipment and tools that you need to work, such as machinery or even computer technology, can be kept during a bankruptcy. The limit is usually up to a few thousand dollars.

3. Government Benefits

Any government benefits that you receive, such as welfare, are still protected when you go through bankruptcy. You may want to inquire regarding which benefits are protected before you complete your bankruptcy, as private benefits usually aren’t protected. Private benefits would include benefits gained through charitable organizations. 

4. Retirement Plans

Your retirement plan, as long as it is specifically a retirement plan and not an unofficial retirement savings account, is usually protected during a bankruptcy. However, there may be exceptions for actual retirement income. If you’re already receiving disbursements from your retirement plan, you may want to check with your financial adviser.

5. Personal Items

There are many personal items that you’ll be allowed to keep following a bankruptcy claim. This includes most items that wouldn’t be easy to liquidate, such as furniture, clothing, appliances, books, and memorabilia. You’ll usually be able to keep jewelry items as long as they are not worth more than $1,000. 

6. Your Car

Under certain situations, you’ll be allowed to keep your vehicle. This is usually decided on a case-by-case basis; for example, if you need your vehicle for work and your vehicle is inexpensive, it’s likely that you’ll be allowed to keep it. If you have a luxury vehicle and only use it for recreational purposes, you may be required to sell it. 

7. Your Insurance 

Insurance plans will not be dissolved during a bankruptcy. This is especially relieving if you have a permanent or whole life insurance policy that has significant value. 

If you have any further questions about bankruptcy, a financial adviser, such as Paddon & Yorke Bankruptcy Trustees, may be able to help you. Bankruptcy does have some significant consequences, but the consequences may not be as dire as you believe. Many items in a bankruptcy are negotiable and you can appeal some decisions.

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