Tax time!!!

This is a note out there for my photography friends as well as any other small businesses who are collecting GST.  As a rule of thumb, we all like to pay as little in taxes as possible.  GST, unlike income tax, is a simple in-out equation.  While some people feel like when they owe GST at the end of the quarter or year they are losing "income" the truth is that it was never your money to begin with, and if you owe GST it simply means that you collected more GST than you spent.  Translation?  You a) made a profit or b) need to buy more things in Canada so you can claim input tax credits (ITCs).

Unfortunately, lots of small business owners and sole proprietorships deposit their GST in the bank and spend it, resulting in a huge IOU to the feds and no cash to cover it.  Here are a three easy tips that will help you avoid getting caught grabbing your ankles with your pants down.

1) Deposit GST in a separate account as it is collected.  Rather than depositing your GST in the same account as your income and expenses where it can deceive you into thinking you have cash to burn, you might want to consider stashing it away in a separate account.  The easiest way to do this is to go directly in to the bank to make your deposits or develop a habit of logging in to your online banking after depositing funds and manually transfer the GST the same day.   Keeping your GST completely separate will make it 100 times easier for you to not accidentally spend the GST you've collected, especially if you aren't keeping your books regularly.

2) Opt in to file quarterly instead of annual GST returns.  Lots of small businesses do what bookkeepers refer to as "shoebox accounting" meaning, you throw all your receipts into a figurative (or maybe literal) shoebox and hand it over to your accountant or tax prep guy when it's time to file your annual return.  By signing up for quarterly remittances you will get into the habit of setting aside a few hours once every 3 months to track your income and spending.  The bonus side effects of filing quarterly are smaller GST payouts and pretty good idea of your company's success!

3) Learn how to keep your own books.  I assure you that in tax prep world, every person who gets handed that "shoebox" dies a little on the inside.  You don't need to be a certified accountant to do your own bookkeeping, and with so many options ranging from free to still totally affordable software out there, you're sure to find one you love.  Wave and Google Drive spreadsheets are my personal favourites, but you may want to check out QuickbooksKashooStudiocloudFreshbooks... While it might take a bit of trial and error figuring out which one works with your business model and budget, the awesome part is when it's time to file your GST instead of having to manually wrangle a huge stack of receipts and contracts into some kind of order so you can do manual calculations, you simply hit "Print GST audit report" and it's all done for you.  Ba da bing.

I teach basic bookkeeping using Waveapps.  If you're interested in joining us for a day of guided tax prep on Saturday, February 15, 2014, please feel free to sign up here or contact me via the form on this blog.  Cost is $150/person with a maximum of 8 participants.



dirty little secret: what to do when a client leaves you

You've had a great relationship with your client for years then one day out of the blue WHAMMO - their new Facebook profile picture (that you didn't take) is accompanied by the caption, "~photographer that is not you~ is the Best.  Photographer.  Ever!"  Or maybe you bent over backwards to accommodate someone and earn their loyalty by giving them a break on pricing but see that a few months later they have new photographs posted by a different photographer who is easily twice as expensive as you.  Or maybe a family member or close friend hired someone other than you for their wedding.  You're hurt, angry, and feeling betrayed.  What is the appropriate response?

First, and most importantly, make no assumptions.  You have NO idea why they chose to use a different photographer, and no right to know.  Maybe they got a Christmas bonus.  Maybe the other photographer had a sale.  Maybe they got bored with you.  Maybe you offended them.  Doesn't matter.  As another photographer put it, "You don't buy all your clothes at one store to protect the other store's feelings..."  Rather than project onto your client, use the opportunity to review your business model.  Were you price shopped on a special?  Did they not like the pictures?  Did you take too long delivering your products?  If you have an ongoing problem with client retention then you probably need to make some changes.  But if it's an anomaly, chances are very very good that they went elsewhere for reason(s) beyond your control.  If they love you, they will be back, and if they don't, then you didn't want them anyway. by Malia Moss
Next, unless you know you did something wrong, do not take it personally.  If you think you *might* have offended or disappointed them I suggest you only ask if you won't act defensively should the answer be yes.  If all you're going to do after hearing an answer you don't like is defend yourself or accuse them of being too sensitive/backwards/narrow-minded then it's probably best to leave well enough alone.  If you do ask and they say yes, you do NOT have to apologize for offending or disappointing them (none of us can control what offends or disappoints other people) but it would be proper etiquette to apologize that they feel offended or disappointed, and let them know it was not intentional.  If you feel so inclined, you can even ask if there is anything (within reason) that you can do to make it up to them.  This shows that you value their thoughts and feelings.

(fill your own apology like this one in online by visiting here!)

Lastly, be gracious.  The same way you have no control over what offends or disappoints anyone else, your bruised ego is not your client's fault.  Unfriending, deleting their sessions from your blog, a mutual friend (or you) leaving a passive-aggressive statement like "These are almost as nice as the pictures ~insert link to your website here~ took last year!" or sending a private message explaining just how awful their new photographer is and why...  totally not cool.

Now, if you find it difficult to keep from feeling hurt, you are welcome to unfollow or unsubscribe from the person's tweets or status updates or whatever, but if you hope to be on the list of contenders the next time they need photos I suggest you suck it up and leave a polite, honest comment on the new photo.

Even if the pictures are not what you consider to be great photography a simple note saying, "You guys look great!" or "My, the kids have grown!" not only puts your former client at ease about your openness to them coming back after "cheating" on you, but has the pleasant side effect of making you feel like a bigger person.  And if the photographer did a really great job, slip in a compliment - we all love getting a nod from a colleague, especially when it's someone we admire and respect!  So go on - be nice!  You'll like it, I promise!