I attended Quickbooks Connect 2017 in Toronto last week. It was the first year that I attended. I got to speak at one of their events, and I was completely blown away from the value I got out of it.
First and foremost, thanks to my accounting coach, Jeff Borchswa, I got to share my marketing journey with about 100 accountants and bookkeepers.
I was the least experienced person compared to the other three panelists. Very humbling indeed.
I had fun sharing the tips and tricks I used to build up my audience and how having a niche makes it so much more efficient and effective for my work.
And of course, I was completely blown away by the Artificial Intelligence that is implemented in the Quickbooks Online and where the future is taking us.
If you are an iPhone user, you would be familiar with Siri on your phone. You essentially press a button on your phone, ask Siri a question and she will research it and report back.
There’s something similar happening in the accounting world as well!
Soon, likely sometime in 2018, we could click a button and ask Quickbooks where I spent my money last month. The breakdown would be automatically show you’re expenses.
You can ask the Quickbooks app, how much in taxes you owe and it will tell you the exact amount.
You can ask Quickbooks if it loves you, it will respond too! ?
You can pull out the phone, get your information right at your finger tip without calling your own accounting department or your bookkeeper to get all the information. Smaller businesses that have just got themselves up and running may want to work with a bookkeeping company for the first couple of months so they can understand how the accounting process works. Working with an outside company will also ensure that all of their finances are in check before deciding to make any updates.
This is just as exciting for accounting firms as it is businesses. Companies are now seeing the benefit of using an accounting firm to help with their bookkeeping and other financial needs. However, like those using Quickbooks to track their financial data, accounting firms themselves are also beginning to use online tools to make their career easier and data more manageable. You can find out more at websites like https://jetpackworkflow.com/accounting-software-for-cpa-firms-bookkeepers-accountants/ as to what tools accounting firms are making use of; it seems artificial intelligence is leading the way!
Whilst many companies are making use of accounting firms still, others are finding that Quickbooks could help improve the running of their business.
That *IS* BIG!
I am not a spokesperson for Quickbooks, for the record.
It was so bad that a couple years ago, when my client, Scott Zandbergen, some big shot working for QBO, told me that he’s using QBO for his online bookkeeping, I had a disgusted look on my face. Haha!
I *reluctantly* worked with his QB Online file for the past couple of years.
It is truly what the future can hold for us that really blows my mind away.
QBO on its own isn’t the greatest software to work with. But it is the hub that links a lot of the apps that I use together.
I am going to setup my tenants on an automatic collection in the future. It is $1 per transaction.
I am also going to setup payment system. With a click of a button, I can make payments to different vendors.
I am also going to use another payroll solution for my company’s payroll. It’s free from 0 to 20 employees! I think I may sometime soon be employing more than 20 people so I’ll be looking around for other small business payroll solutions that may offer better features and rates.
And they are all synced with my bookkeeping software.
Talking about systemized your rental operations and small business to simplify your life!
Hopefully, with the right team of people, I can host some webinars to go through these apps with all of you in the future (after I test out the product first)!
Now, onto this week’s topic.
Many real estate investors and small business owners borrow money to invest in their business to build their rental portfolio.
More often than not, they use their existing home equity line of credit to make an interest-free loan to the corporation for running the business and buying properties, rather than a small business line of credit.
The taxpayer is NOT earning any interest income from this loan.
To qualify for interest deduction, the money borrowed must be used for the purpose of investment (direct use test).
Can you deduct the interest on the line of credit personally when the shareholder loan is not interest bearing?
CRA didn’t think so. The taxpayer disagreed claiming that the interest free shareholder loan was to earn dividend income from the corporation. A judge agreed with the taxpayer and allowed the deduction.
If you are making an interest free loan to your fully owned corporation without charging anything back in return, chances are, you can still claim the interest in your personal return!
Until next time, Happy Canadian Real Estate Investing.
Cherry Chan, CPA, CA
Your Real Estate Accountant