The Economic Action Plan for 2014 works for small businesses and their accountants
September 23, 2014

Some good accounting news for small businesses in Canada was recently announced when the Harper administration declared the Small Business Job Credit to help modest entrepreneurs save money in the coming two years.

Some of the goals of the Economic Action Plan for 2014 include supporting small businesses, which make up a significant chunk of the economy, while also creating jobs, boosting growth, keeping taxes low and balancing the overall budget for the next year. An ambitious mission for any country, but the Harper government is following through on its promises with new measures to ease the burden on small business owners that can be capitalized on with the help of accounting associations.

Credit that helps the little guy
A large majority of the fledgling companies in Canada stand to benefit from this new credit. It's predicted to save an estimated $550 million for small businesses in the next two years for those who pay employee insurance premiums. The previous rate for these EI premiums was $1.88 for every $100 of insurable income, but the new changes lower that to $1.60.

Around 90 percent of small businesses that pay this premium will see a reduction in their payroll taxes of about 15 percent. This decreased tax rate combined with an ease in the restrictions for modest companies' incomes are predicted to provide approximately $2.2 billion in relief for the small business market throughout the year.

"Small businesses are crucial to Canada's long-term prosperity. Canadian families depend on the jobs they create and the services they provide. That is why the Harper Government will continue to foster an environment for small businesses to grow and prosper," Minister of State Kevin Sorenson said in a news release by Insurance News Net.

Taking the credit into account
For organizations that don't always have the time to properly manage their books and financial records, owners can harness accounting software to fully understand the long-term value the Small Business Job Credit will have on them. With the help of skilled accountants, businesses can allocate these extra funds to the areas that need them most and help company owners transition to bookkeeping software.

According to Insurance News Net, Canadians are already ahead of their American counterparts when it comes to filing and paying their taxes. Small businesses based in Canada complete these tasks 25 percent quicker than those in the United States, according to a 2014 study by PricewaterhouseCoopers which examined the process in 189 different countries.

Financial management software can help emerging entrepreneurs allocate their savings to proper investment in the areas that need funds. Every dollar counts for small businesses and savings this large can make a difference when it comes to the success of a new company. Small businesses would do well to proactively reach out to their accountants and bookkeepers to learn more.

Nexus: G-WEBCD1