Ten Advantages to a Business Partnership

Many people are hesitant to enter into a business partnership and there are certainly some disadvantages to business partnerships that need to be considered.  But that is a topic for another blog.  The following are ten advantages to a business partnership:

1. Makes the business stronger by having the strengths of all the partners available to the business
2. Increases the amount of investment in the business, thus making lending to a partnership more attractive (in some cases) that it would be for a sole proprietorship. 
3. Gives the flexibility to the partners to have different "hands on" hours in the business.  One partner may only be able to work 25 hours a week on weekends in the evenings but the other partner can work 40 hours a week.  This will give good coverage to the business and the profits can be divided to reflect the actual time each partner works
4. Paperwork and tax filing for a partnership is similar to a sole proprietorship and therefore less costly than the tax requirements for a corporation.
5. Year ends are calendar year with the final income tax returns (the owners' personal returns) due in June. 
6. A partnership can hire employees. 
7. Family members of the partners can be paid employees of the business as long as fair value is exchanged. The family members provides the work and is paid the market rate. 
8. Succession planning may be easier as a potential buyer may be one of the partners. There is still legal requirements to transfer the ownership from two or more partners to one of them. 
9. Decisions can be made within the management/ownership of the business.  The partners can seek professional opinions if necessary and they can also arrange for an independent opinion in the case of disagreements amoung the partners.
10. The set up and dissolution of a partnership is easier than it is for a corporation. 

This is a brief overview. Before entering into a partnership it is suggested that you seek the advice of your lawyer and your accountant.

When Choosing Accounting Software

Business owners have so much to do and plan and manage that the administration and accounting tasks associated with a business sometimes do not receive much attention. The task of finding and installing, setting up and using an accounting software package can be daunting and intimidating. The following are a few things that may make the process easier.

1. Make a list of the features that you would like to see in your software package.  While there are accounting principles that require things to be done in a certain way there are several different packages available to choose from.  Will you be using the software from more than one computer, do you have a network and consequently need a software package that can be accessed from several machines. Do you want to have the ability to preschedule certain tasks, such as writing recurring monthly payments? 
2. Is there training and support available locally for the software package? If you are going to be relying on this package to track all your financial records then you may want to have classes available in your area where your staff, and you, can receive training on the use of the package. 
3. What software package are other businesses using? Are they satisfied with the performance and with the support from the developer? 
4. If you are using the services of a public accounting firm to have your tax returns and other reports generated, do they have a recommendation for a specific software package?  If they are using one package, it might be to your advantage, financially and otherwise to use the same package. This will reduce time in completing your year ends and other regular reports. 
5. Will you require the ability to track expenses and revenues by project or job? Do you have an inventory that you would like to have recorded and tracked through your software package? How many employees do you have and will you be using this software package to calculate wages and any subcontractor payments? 
6. Can you make changes in tax rates for federal or provincial sales taxes?  If the GST rate drops or if that tax is eliminated you will want to be able to make that change without having to purchase a software update. 

The above are a few of the things to consider when you are starting the process of choosing an accounting software package.