Mosquito season is in full force at the lake this year

Welcome to the this issue of The Bookkeeper's Notes newsletter focusing on good bookkeeping practices.

If you are a regular site visitor, you know that is committed to educating and providing support to ... work from home business owners. I sincerely hope you find this newsletter useful and practical.

Kayaking is a family affair

It was a long winter but with summer just around the corner, it's time to pull out the kayaks and take to the water. Each year the number of residents who kayak on our lake increases. In 2004 I saw two residents who regularly kayaked on the lake. Now I can't even count the number. Oh yeah ... and don't leave without the bug spray because the high water levels this year have made the mosquito population unbearable without it!

In this issue, I'll give you a few presentation tips for your income statement ... to make it easier for you to read, look at minimum wages in Canada and the U.S., along with news from the CRA and IRS. I'm also introducing you to a new product I found, The Paperless Organization Guide.

Thank you to my subscribers who participated in a Product Development Survey. I am now in the planning stages of what product or products to offer site visitors. If you would still like to participate in the survey, please click here. Also feel free to drop me a note to let me know what kind of product you would like to see offered on the site.

Of course, this newsletter gives you access to the links of a handful of web pages that are password protected … my newsletter subscribers have exclusive access to these bookkeeping lists and procedures. You will need The Insider's Pass (a password) to access them, which you will find in the last section of the newsletter.

For work from home business owners doing their own books, I have introduced a new service … a general review of your ledger. This service will be for those who want assurance they are on the right track. I'll perform a high level review of your general ledger to see if there are any obvious problems. You may choose to have me walk you through the problems and how to correct them. If you are interested, send me a message on my contact form.

Bookkeepers interested in advertising on the Bookkeeping-Essentials's website, can place their ad by contacting me through my website.

It is my sincere hope that the information I provide on, and in this newsletter, will help you learn good bookkeeping practices to manage your business finances easily and more efficiently. It can be tough coming up with ideas on what to write about. If there is something you'd like me to cover, please drop me a line.

To your success! ... and, of course, thank you for subscribing to this e-zine.

Until next time,

Laura (aka Lake) :0)
Lakeshore Bookkeeping Services

P.S. I would like to remind you there is a difference between information and advice. The general information provided in this e-zine or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using my site content for any reason whatsoever.

image of woman performing bookkeeping tasks on a computer courtesy of

In This Issue ...

  • The Paperless Organization Guide - 3 Choices
  • Focus on Bookkeeping - Income Statement Presentation Tips
  • Focus on Payroll - Minimum Wage
  • Recent Canada Revenue Agency (CRA) News
  • Recent Internal Revenue Service (IRS) News
  • In the Forum - Share Your Expertise
  • The Insider's Pass - The Current Password is Here

Organize Your Documents With The
Paperless Organization Guide

I want to introduce my newsletter subscribers to a new product I've found by Vancouver based consultant Brooks Duncan. This guide may change your life forever.

Brooks has a diverse background that touches upon accounting, computer programming and client services. He has taken all of that expertise to produce a top notch product.

The basic guide is called “Paper Practitioner”. It includes audio interviews (and transcripts) with clients who have already gone paperless.

Want to purchase it? Skip the reading and purchase it here.

This basic guide is 82 information-packed pages that covers:

* folders vs software

* naming conventions

* searchable text

* remote access

* finding your documents

* backing up and workflows ... so you have the ability to successfully go paperless.

If you've been wanting to go paperless but don't know where to start, this basic guide at just $47 USD will get you started. It caters to both the Windows and Mac platforms.

But what if you want more than just a pdf guide? "The Paper Specialist" throws in audio interviews (and transcripts) with professional organizers and video Screencasts which are perfect for the visual learner.

If you are someone that likes to receive coaching, then the "Paperless Master" is the version for you. It comes with all of the above PLUS 2 one hour group coaching calls that are recorded so you can play them back later.

I urge you to visit to find out more about this Guide.

I recommend Brooks Duncan, and I know you will learn a lot from him. This product has 3 price points so you can tailor it to your needs. You should know that I am an affiliate of Brook's, which means I believe in what he is doing. If you purchase the guide from him, he will forward me a commission.

Here is that link again:

Focus On Bookkeeping - Income Statement Presentation Tips

This issue, I thought I'd spend some time on your income statement. Not how to read it ... but how to present it for internal use.

I'm going to show you how a few simple presentation changes to your income statement will make it easier for you to use it as tool in your business decisions.

One of the first things I like do when formatting the Income Statement is to rename it to "The Statement of Operations". I think this more accurately reflects how the small business owner, who may not know all the ins and outs of GAAP, uses it.

Then I like to go in and remove the pennies. Think about it for a minute. Would knowing a number is $3,657.23 lead you to a different business decision than $3,657? The pennies can distract you ... so take them out of the equation.

If you glance at your income statement, you will probably notice that the report lists all your income and expenses alphabetically. I think this makes it tough for you to really focus on what's important.

It is so easy to concentrate on the small dollar accounts as you read down the list ... instead of focusing on the big money makers and larger expenses that you must control to stay in business.

To solve this problem, I sort the income and expenses not alphabetically, but by dollar value. This means your biggest sources of income and largest expenses are the ones you see first.

It lets you easily see which expenses must be monitored if you don't want cash flow problems ... or suggests product or services to play around with (your low income earners) to see if you can increase sales ... or consider dropping all together.

This simple rearranging of the income and expenses on your report lets you hone in on what drives your business easily and simply.

To make the picture even clearer for you, consider adding a column called "% of Income". This calculation presents your expenses as a percentage of your income. How is this helpful?

Hmm let me think about this. If one expense item is 25% of your income, it jumps out at and grabs your attention … or it should. It gives you a very good indication that it needs to be monitored so the costs don't escalate out of control … eating up all your profits.

You will also be able to see that probably about 20-25% of your expense accounts account for 75-80% of your total expenses. This a bonus for the small business owner who doesn't have enough hours in the day. Now you can clearly see what's important and if the costs are going up or down in relation to your income. This could be a useful tool for you, don't you think?

These are just a few of the changes I like to make to the income statement to make it easier to read … in my opinion.

You can find a presentation sample by clicking here.

You can learn more about how to read the income statement itself by clicking here.

Would you like to test your bookkeeping skills ... or prescreen a bookkeeper before you hire them? You can purchase this 300 question test including the answer key for $15 USD here ...

Focus on Payroll - Minimum Wage Rates

BC introduced their first minimum wage increase in 10 years effective May 1, 2011 ... so I thought that I would look at minimum wages across Canada and throughout the U.S.


In Canada, I found two nice sites where you can find the minimum wages for all the provinces and territories. The first one is a website called Canada Minimum Wage ( The website is a public serve of Marathon Studios Enterprises. The second site is

The problem is they don't keep the sites up to date ... but they are great starting places for looking for updated information.

When you visit the Canada Minimum Wage website, clicking on the name of each province provides a webpage with labor laws for the province. is directed more to employees than employers.

Because it was hard to find minimum wage rate information in one place that is up-to-date, I have created a table in the Compliance area.

Click here for a minimum wage rate by province table that I have added to Bookkeeping-Essentials. You will also find references/links to employment standards for each province.

When you look at the table, you will see that B.C. is still the province with the lowest minimum wage at $8.75. When B.C.'s next increase occurs in November, the Yukon will have the lowest rate at $9.00.

United States

The best place I found for a one stop location for minimum wages in the United States was recommended by The Bean Counter ... The Department of Labour.

Click here to find out information I have gathered on both federal and state minimum wages in the U.S.

Humour by Advice ... with Dr. Julia Chicken

Recent CRA News ... and Other Government News

A reminder that your sole proprietor return is due today, June 15th ... however, you should have paid your taxes by May 2nd to avoid interest charges.

There has not been a lot happening on the CRA News front over the past two months, so this section will not be lengthy.

CRA's 2011 Payroll Tax Tables for Canada have now been updated to reflect tax changes to Manitoba, New Brunswick and Saskatchewan effective July 1, 2011.

Prescribed interest rates for the third quarter of 2011 have been released and have held steady. The last rate change was July of last year when corporate rates for overpayment of taxes was introduced. Find the interest rate tables here ...

With the Conservatives elected with a majority, their budget was reintroduced and the next phase of Canada's Economic Action Plan was announced. It includes a temporary hiring credit for small businesses and extending the accelerated capital cost allowance rate for investment in manufacturing or processing machinery and equipment for two years.

I'll end this section with a note about the BC Referendum on the HST. While it is not totally CRA News, the outcome will affect GST/HST. BC residents will be receiving a voting package between June 13 and June 24. It contains the mail-ballot that must be returned by July 22, 2011. The voting results are expected sometime in August.

The question being asked on the ballot is, "Are you in favour of extinguishing the HST and reinstating the PST in conjunction with the GST? (Yes/No)"

Recent IRS News and Related News

FUTA surtax of 0.2% is set to expire on June 30, 2011. Employers need to track the pre and post June 30 FUTA taxable wages if legislation is not enacted to continue the surtax. Read more here ...

If you have been wondering how to amend prior period payments using EFTPS, read more here ...

At the American Payroll Association's 29th Annual Congress, Steve Hodgson, CPP spoke about determining the status of a worker ... independent contractors vs. employees. As a result, I've updated my employee payroll tax article on this topic to include his information about the IRS 1099 Matching Program ... and how the IRS are using it to audit a worker's status. Read the revised article here ... psst look for the bean!

At this same conference, Larry White CPP gave a workshop entitled "Regular Rate of Pay - Are You Paying Your Nonexempt Employees Correctly?" I did not personally attend the conference but have read NACPB's notes on it. I ran out of time prior to the release of this issue to post the highlights, so watch the Employee Payroll Taxes page ... I hope to get the notes added by the first week of July.

IRS interest rates have been released and are remaining steady for the third quarter of 2011. Find the interest rate tables here ...

Ask a Private Bookkeeping Question

Purchase your private bookkeeping question here ...

In the Forum - Now It's Your Turn

When I first started this site, I was just going to put up my notes so that small business owners who couldn't afford a bookkeeper would have a fighting chance of starting their business off on the right foot. Before the first year was up, the site took on a life of its own.

I get inquiries on where is the best place to start. My first year visitors grew with me and were introduced to material as I published it. My site is now over 300 web pages (not regular 8 1/2 x 11 pages) ... and the information can be overwhelming for new visitors. Click here for a site map.

I would like to take this site to the next level and be able to guide my new visitors through the site. To do this, I need time to write a series to meet this need.

It has been a tough decision for me, but there are only twenty four hours in a day ... so something has to go in the short term.

To allow me time to develop the series, I will be unable to respond to questions asked at "Ask A Free Bookkeeping Question" that require research on my part or lengthy responses.

Questions asked will still be posted even if I don't have time to respond ... however, it will now be up to you, my site visitors, to help out and reply when YOU have the knowledge to do so.

I will still moderate the responses to keep the quality of the information on the site high.

Now it's up to you, my loyal subscribers and site visitors. Here is a selection of unanswered questions:

Gilly would like some confirmation that he has handled the bookkeeping entries for the cost of painting a new vehicle correctly.

A rental property owner needs some information on how to self-assess GST/HST.

Mary wonders why the accountant gave her a copy of their working trial balance.

I'm hoping someone can help Katherine with the bookkeeping entry for Ontario's capital tax.

The May 17, 2011 comment posted on GST Mileage has quite a few questions regarding GST/HST, mileage, and personal use of their vehicle.

If you would like me to personally answer a bookkeeping question for you, my Ask A Private Bookkeeping Question service is still available.

The Insider's Pass

The Insider's Pass gives you access to the pages in Bookkeeping Essentials that are available only to newsletter subscribers ... my way of saying thank you.

Here's how it works. The pages listed below will only be partially viewed by all visitors. To view the entire article, you will need your Insider's Pass for access. The password will change with each newsletter … every two months. So if you ever forget, you will always find the most current password in your current issue of The Bookkeeper's Notes.

The current password is Lemonade ... it's one of my favorite drinks in the summer. It is case sensitive. ;0)

Here is a list of the pages which are password protected so that only my very important subscribers ... that would be YOU :0) ... have access.

Internal Controls
No password page
Password protected page

Bookkeeping Checklists
No password page
Password protected page

Common Journal Entries - Journal Entry Examples
No password page
Password protected page

Month End Procedures
No password page
Password protected page

Adjusting Entries
No password page
Password protected page

Monthly Financial Review or How to Supervise Your Bookkeeper
No password page
Password protected page

There is still time to participate in my Product Development Survey. Click here to have your input towards the products I develop for this site.

This wraps up this issue of The Bookkeeper's Notes newsletter. Have a great summer everyone and see you in August.

Comments? Ideas? Feedback? I'd love to hear from you. Just reply to this e-zine and tell me what you think!

If you like this e-zine, feel free to forward it to a friend. You'd be doing me a huge, huge favour. If a friend did forward this to you and you like what you have read, please subscribe by visiting my site.

Bookkeeping Tests
Prescreening Tool or Study Aid
300 Questions

includes answer key,
access to 8 visual tutorials
and more

Bookkeeping Test

$49 USD

Click on exam booklet to order
Click here for more information

How to Use This Exam:

(1) As part of your interview process when hiring a bookkeeper.

(2) To self assess your bookkeeping skills.

(3) As a practise test before writing your bookkeeping certification exam.

(4) To prepare for a job interview.

Learn How to Turn
Your Piles of Paper
Into an Organized
Electronic System

Paperless Document Organization Guide

Click on the picture above
for easy to understand tips and strategies on how to go paperless.

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From the Mail Bag
Visitor Comments

I Love, love, LOVE this site! Did I mention I love it?! I do my own bookkeeping with QuickBooks and whenever I am stuck on something, I refer to your website and find exactly what I'm looking for to help. Everything is explained so well, in plain English and easy to follow. This site has been helpful many times, but most recently, with GST filing. I filed for the first time this year and when I went to file the next quarter, the numbers hadn't cleared from the previous quarter and everything seemed to be a mess. I found out on your website that I had filed with the CRA but did not complete it in QuickBooks. By following your steps, I sorted it out and it was a very easy fix. Phew! Thanks!

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Leona, Sicamous, BC Canada

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PK Lethbridge, Alberta

My biggest problem in doing my books is keeping debits & credits straight in liability and equity accounts. I really liked the cheat sheet. (I think that will help me keep the debits and credits straight.)

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Lake you're awesome in every way. I have had some insight about how to properly classify some accounts.

Karim, Calgary, Alberta

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CPB Bookkeeping, Inc.
"The Organizer"
Lake Worth, FL

I posted a question on Accumulated Surplus and you asked me to comment on your comments. I really appreciated reading what you posted and it did help. Especially the part of talking to the accountant. That really makes sense. I find more and more that I interact with the accountants to keep on learning. Love Love Love your website. Just discovered it about 3 weeks ago and have been on it lots since then.

Red Deer, Alberta

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Cindy, Calgary, Canada

It (your site) is very helpful and thank you for your tips and advice. I am so glad I found your site.

Lee, Calgary, Alberta

Thank you so much for your hard work on your site ... I find I learn quicker and easier with you than I did with courses. Your site has helped my knowledge, learning new things and with the explanation of terms/items. Keep up the good "BookWORK"!

Naomi, Balance Your Books, Squamish, B.C.

This website has been very helpful. It's been too many years since school and I'm a bit rusty.

Sue, Medicine Hat, Alberta

I just found this site tonight. It's going to help me a lot as I learn how to use my Quickbooks more fully (I've only used it for payroll). Don't ask me how I've managed to keep the books this long -5 years- without knowing much more than how to balance a checkbook. I'm getting some help from a professional now, but your site will keep my pro costs down. Thank you. I will definitely donate once I begin to use it with my QuickBooks. It's [your site] easier to understand than Help in QuickBooks. QuickBooks assumes I know bookkeeping concepts. It [your site] appears to be very thorough, though I've only scratched the surface of what I can learn. I took an online bookkeeping class a couple of years ago, but this site has direct application to quickbooks and it's a searchable site!

Ruth, Dos Palos, CA USA

Thank you for providing valuable information regarding home business taxes on this website.

U.C., Toronto, Canada

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Taking the worry away
Belledune, New Brunswick

BTW, did you say Bookkeeping? Cuz I fell asleep... just kidding!

Dr. Julia

(I love her humour!)

Absolutely a great site! I have often dreamed of having a similar site but figured I might have to wait until I retire to get the time. I have bookmarked this site and will return again.

Alwyn Enterprises
Scarborough , Ontario

You have a wonderful website. Thank you so much for letting me know you have one now. [It] is really well done and very, very informative. Also really charming.

Reliable Recordkeeping
Toronto, Ontario

I'm enjoying reading your blog! Thought I'd drop you a quick note of encouragement.

QuickBooks "one
on one" coaching
Edmonton, Alberta

This is a marvelous site and one that I would like to use as the basis for training bookkeepers. I am a CPA here in the states and am in the process of building a what will hopefully become a substantial bookkeeping business (not a dark wood & gold lettered CPA firm). I want to serve the small business owner with the day to day service they need. You have obviously put in an enormous amount of time and effort here (there is no doubt there) and provide a wealth of fantastic information.

R. Keith Pierce, CPA, P.A.
I'll Sweat The Small Stuff For You -
Jacksonville, Florida