How to Get Money to Start Your Practice with Cassandra Tyagi

If you're just starting out. If any newly incorporated company qualifies for the government, it's the CSBFL loan. It's available through any bank that you work with. And it's an almost guaranteed government funding where you only have to put 10% down. The rest is funded. You just go through any bank. I saw someone get 100,000 the other day. I'm working with another client for 300,000 right now. So you can get a pretty hefty sum just depending on what size of a clinic you're looking to buy.

How to get smarter in business and in life. This is the question, and I'm on a journey get you that answer. I'm going to interview the world's top entrepreneurs and deconstruct their winning secrets. Going to talk about everything from marketing, money and living a bucket list life. I'm Rick Lau, healthcare entrepreneur. I grew and exited my 127 locations in my 30s. Welcome to the Clinic Boss Show. So, everyone, welcome to the Clinic Boss Show. It's Rick Lau here. I'm super excited. We got Cassandra here. And Cassandra is a CEO of Tag. Tag Group. Right. You know, did I say that right?

Tagi Group.

Very good.

And she actually works with a lot.

Of healthcare practitioners on everything relating to accounting, finance, like bookkeeping and all the numbers. Right. And so, yeah, so. So Cassandra is a bean counter. Is that the. Is. Is.

Is.

Is that the right term?

Cassandra? Rick, maybe other people on my team are being counters, not myself. I don't identify as that. But, you know, we do handle the numbers and we've got some people who are really good at, you know, making sure everything is really, really set up. I myself am more on like the strategy side. Business strategy, meeting up with clients, talking tax strategy, of course, as well. But thankfully there's other people to actually count those beans for me.

And, and what are other names that like, you know, people call like, you know, accountants in your profession, like outside of being counters.

Right. You know what, I think we're pretty lucky in working with like exclusively with health professionals that a lot of people just sort of come to us and they're like, oh, thank goodness that you exist. And I don't have to look at this. So the terms tend to be pretty nice to us.

Okay, that's super cool. Yeah. And this is our first time meeting, so I'm super excited. And I'll just tell you earlier, before the, before the show kind of started, that I see you everywhere on Instagram, you know, and, and man, you are a solopreneur coach, you know, actually talks about you all the time and why we should, like, meet up and chat, you know, just before we get started. Like, maybe, like, I'm curious, what's a typical size of practice owners? Like, do you work with, like, what type of, like, revenue are they billing in their practice? Like, 250, half a million? Like, what's do you see? Yeah, I'm just super curious about your. The type of clients you kind of work with.

Yeah, I think on the clinic side, we're probably looking at clinics about half a million and bigger. You know, we work with a few larger clinics. We've helped a few clinics to open up their second or third locations as well. But we actually still predominantly work with solopreneurs, like those individual practitioners who are maybe working out of a clinic or who are working on their own. Maybe they're completely virtual practice or doing rent. So we do work with a lot of individuals, even individuals who are, you know, massage therapists who might be billing a little bit less and thinking that they can't work with an accountant. Like, we're still there working with them. Because every single individual in the health space and everyone listening to this podcast definitely is a business owner. Whether you want to be or not, you still are a business owner if you're a sole proprietor.

Yeah. So a sole preneur in this case could be, you can have your own practice or you could be an independent contractor. Right. You know, working for a clinic. Is that kind of your definition, Cassandra?

Yeah, absolutely. So all of those sort of fall under the sole proprietor bracket for taxes, unless you've decided to incorporate. But we work with people, you know, who are working out of clinics, who work on their own, kind of everything in between. And especially, you know, if you're thinking about opening up something later in your career, maybe you're working at a clinic right now and learning your first few years, and in five years you want to open up a clinic. There's no better time to find the right accountant to be able to start working with and tax optimizing even before you get to that clinic opening stage.

Yeah, interesting, interesting. And what would you say is your typical, like, billable, like the typical revenue do you see in a solopreneur? Like, you know, it looks like you've seen a lot of books. I'm fascinated with what type of revenue you're seeing for solopreneurs right now.

Right. No, that's a really hard question. Mostly just because I don't have as much visibility on the solopreneurs anymore. We have a team of nine. So we've got five CPAs that are doing consulting right now and take on different people based off of, you know, getting the right fit and the right person in. But you know, typically probably around the 100 to 120k mark, it's where a lot of people will fit in. And then of course some people maybe don't want to work that much or if you're newer in your career, you know, don't set that expectation. If you're a new grad, please don't listen to that number. That's a number for five years from now. But you know, kind of everything in between.

Most solo partners, you're the person of truth because everyone like, you know, everyone, you see what people's take home is, right? So, so you're saying that 120k is what you see for someone that's a little more experienced three to five years in their kind of their clinical career. Like what do you see for a new grad typically?

Right, New grad. It depends on the time of the year that you're graduating, right. If you graduate in November and you get your license in December, I mean you're gonna first full calendar year. I mean depending on what type of practice you're doing, right. Like Cairo or NDS or physio, you're probably looking at 80k of take home in your first year, which is really not bad all things considered. And then of course you have your tuition carry forward so you're not paying any tax on that. So enjoy it for those first couple of years because then by the time you are making 100 or 120, your tax bill is going to bring that number down anyway. So you're probably making the same amount in those first couple years as you are later in your career.

This is so fascinating. I love this chat with you. Right. You know, because I don't have a lot of experience within the sole preneur world or independent contractors. So if you look at all the solopreneurs that you work with, right? What is like what professions are billing the most? Right. Like what would you start at? Is it the PTS and the Cairos and then like, you know, the psychotherapists like the nds, like do you, do you see a trend or they're all kind of between that 80 and 120k mark.

You know what the psychotherapists like made bank during the pandemic. Everyone was doing really, really well. But now there's such a desire for in Person therapy and just the dynamic has shifted and people are trying to decrease their screen time. So we've seen therapists who are able to do like 150 in 20, who are in 2023, doing like almost half that depending on if they've pivoted their business model. So there's a lot of shift that's going on in the therapy world all across Canada as well. We work with counselors out in BC and then psychotherapists and social workers here in Ontario, where we're reporting this from. I would say the Cairos usually make the most bank. I gotta give them that.

They're usually what profession makes the most bank. So the Cairo is number one, right?

You know, yeah, Cairo. In my opinion and my view of what I've seen, we actually don't work with as many physiotherapists as I was like, would like to. So our sample set there is actually quite small, but they do pretty well and Andy's do quite well as well.

So your chiro is that 120, that 120. 150 is that we try and say. Or 80 to 120, right. After like a few years out, right?

Yeah, definitely. Cairo is that 120. I mean, depending on the clinic you work that, depending on the split that you're getting, depending on so many other factors, but that's kind of what we're seeing.

What about for an.

And these are. Depends on what they're doing. Right? Because MDs, if they're selling supplements themselves, then their number can be really high. But then you have to pay for all the supplements. So your profit margin isn't as much. Right.

So lots of goods. Right, Exactly.

I've seen an ND make 200, but if they're spending 80k on their supplements and they're not actually keeping all 200. Right.

So, yeah. What's the typical cost of goods on the supplements? Right. Is it 50% or 80%?

I think a lot of NDs try to get it at 50%. Right. Typically, I'll be honest, NDs are such nice people that want other people to have supplements. So their margins typically closer to like 20% than 50%.

Right. Like they just add that 10 or 20% like, you know, versus like running it like a, like a, like a retail store, you know, where like they need to mark it up because they got to administrative expenses because then it's that inventory sits right in your like little like cabinet. Right. So.

Well, which is why I love Fullscript so much. You don't have to buy the product, you just get your commission. I mean, I have Fullscript auto reorder that my ND set me up on, I don't know, 18 months ago. And I just get my supplements to my door and I never forget to order anything. And I don't buy questionable supplements from Costco anymore because I already have enough. Right. So Fullscript, you can make a lot from Fullscript as well, if you've got that set up and that's your mainstream. I mean, it's just money that comes into you. Right. You don't have to worry about buying anything. Or should I have this vitamin D or this other vitamin D or should I carry iron in the summer or only in the winter? Right. All of those questions that you had. You don't have to worry about all that inventory.

This is a fascinating conversation. Like, I love talking with, like, you know, accountants or people in finance actually understand your industry. And we're totally speaking the same language. The only difference is that you, you're looking at the real numbers now. You're looking at the truth of what people actually file to taxes and how much they actually, you know, have in their bank accounts. Right. So it's.

Yeah. Well, and there's also a huge difference between, I mean, Rick, you've been asking me, like, what's the number? What can you bring in? But honestly, as an accountant, more that I care about is your taxable income. How much are you actually spending on your business? Right. So, yeah, you have to spend on your annual membership dues. Maybe you have to buy for your own Jane account or something like that. You need your insurance, but. And a little bit of marketing is good. But if you're getting your $120,000 down to only $60,000 of taxable income, some people are excited because they pay less taxes. But in my mind, you just spent $60,000 on expenses and you don't get to keep any of that money anymore.

Yeah. Yeah. Wow. And what are you seeing as a top taxable? Like, what are the expenses that you're seeing that people are put in for a typical solopreneur. Right.

You know what, solopreneurs, if you're working out of a clinic, they're not doing much. Mostly just because you have the benefit of being on a clinic and your percentage split gives you. Right. You don't have to spend on your own marketing if your clinic is already marketing for you. So, you know, you've got your membership dues, you've got your insurance. You know, if you're a Therapist. And you're new, You've got your supervision, which is always a really expensive one in the beginning. I do see more and more people investing in business coaching, though, on, like, the clinic side as well as the solopreneur side.

Is that what you're talking about?

Insert plug for clinic accelerator here. You know what? I do see a lot of people investing in you guys as well. Or just, you know, there's a lot of other people, right? Like, there's Nicole McCants, Alicia McPherson, Megan Walker. People are investing in those programs to help to learn about different ways to do their practice. Because I think a lot of people are burnt out as well. Right. And you just want to be able to grow, but sustainably and especially as health professionals right there. This is a group of kind, empathetic people who value their own boundaries as well. Right. So it's hard to balance the finances and being that knife. And.

And I want you to be completely honest. People who spend money on business coaching, right? Do you actually see their taxable income go up, like, in, like, two, three years down the road, or is it exactly the same?

You know what? I have one client whose goal was to double her sales by investing in this program, and she did double it. So, I mean, that. That worked out well for her in that case.

But is that the 20% or is that the 80% of what you see?

That's the one exception. So it is possible. I'll say that. I think it depends on the program that you're getting, right? Like, I don't know, there's so much opportunity and so many specific things to invest in as well. It's finding the right thing that actually feels good for you. I think there's a lot of noise, right? Like, I just threw out what, three, four or five names of different people that you can work with, and a lot of people will be like, oh, this person. Like, maybe, I don't know, I'm gonna pick on myself. Maybe. Working with Tag really worked really great for this person. I should invest in working with them because it's going to work great for me. It's going to change everything. Well, sometimes it does and sometimes it doesn't. And you actually have to sit and think of, like, who's the best fit for you and not just go with whatever's worked for other people. Right. Because it's probably not going to work for you the same way that it did work for other people.

Yeah, yeah. I, you know, and I know a lot of the coaches that you bring up, and I Think. And what I see within the coaching community or like the people who run these businesses that like it's usually the 80, 20 rule, right. 20 of these people who sign up for these programs typically are very motivated and like they're go getters and they spent that money, they're committed, you know, and like, they usually like, want to return and they go get it.

Right.

You know, but then the 80% I also see is that like they get overwhelmed or like life gets in the way and then like, maybe something happens and then like, and they don't commit to do the work, you know. Right. And then they question is it the program but, or is it their commitment of actually doing it, you know, and it's just. Yeah, it's, it's something that I, I see a lot within, like. Yeah, within the kind of the, the, the, the, the. I would say like within the community for sure. Right.

So, yeah, I have also seen a lot of people spending lots of money on professional development, I think in the hopes that, you know, for example, getting an EMDR certification, okay, well, now I'm going to be able to expand into this and so I'm going to make more money and sometimes it works. But also if you're offering a new service, you have to completely change and almost change your client base as well. Right? You can't just rely on your old tactics. So to your point, right, you can do a lot of work and do a lot of things, but if you're not implementing it properly, then you know, it's not going to give you that return that you need.

So you're saying that like these professional development fees, whether it's in business coaching or these clinical courses, like, they all have the same outcome. It doesn't really do much, you know, majority of the time it doesn't really have like a big lift in some of these revenues, you know?

Right.

Is that what you're saying?

I think it's about how you approach it. You can't just do a court, right? Like, you can't just watch a webinar about bookkeeping and be like, great, I know everything about bookkeeping. I'm never gonna need to think about this again and leave it for seven months because you don't have to file your taxes, right? You have to actually implement it, you have to learn it, you have to practice it. You have to put in the effort. To your point, those 20 people that are putting in the effort get lots of returns.

Right.

And if you're not in the stage yet that you're ready to put in that effort, then it's probably not going to return.

You have to be willing to the.

Return that you want.

Right. You know, and if you want to do the work, you should just outsource it. You should hire someone else to do it. Like let's be straight, like if that's a way better return on investment, you know, like you said, like you talked about full script like earlier. Right. You know, so why stock inventory that sits there and charge 20 when full script does it all for you? And like you're just an affiliate and you can make that money, right? You know, so.

Yeah, absolutely.

Yeah. Super cool. So let's talk about the, the juiciest topic I guess, within Canada in our profession right now, which is the capital gains tax, you know. Right. That is starting in four days. Right. And so maybe, maybe you could summarize to people like what that is and what impact is going to have on private practice like owners, you know, whether. Yeah. Whether you're a half a million dollar business or a million or even that sole preneur that makes $150,000. Right?

Yeah, absolutely. So anyone who owns property, you know, sell it in the next four days. That's the tax advice that we're getting on this call today so that you can avoid this new rule. The new rule, actually. So there's two impacts on it. So the first I'm going to talk about on the personal side. So this is for people who own any property personally as well. So right now, capital gains, regardless of how much money you make, maybe you've got like a cottage that you have as your secondary residence, regardless of how much you make when you sell that property, regardless of how much profit you get, you were only taxed on half of the profit. So now it's going to be taxed on half of the profit for 250,000. And then anything over 250,000, you'll be taxed on 2/3 of the profit. So it's just being included more as taxable income for you. And then on the corporate side, any gains that you have are now always going to be included at 2/3 of the entire. Right, yeah, exactly. Now I will say, you know, unless you're owning the building that you're operating out of, this probably isn't really going to impact clinic owners. Right. Like your adjustment table, you use it for five years and it's probably not really worth anything. You're not really going to have any gains when you go to sell that adjustment table. If you ever do. Right. A Lot of people are leasing stuff these days. So unless you're owning physical space, like you're building, and that's going to appreciate in value, but most of the stuff that you're buying that are capital assets, even your leasehold improvements, right. That's not going to increase in value. So it's not going to impact a clinic. And of course, the government's argument is that if you're sophisticated enough to have a corporation that owns these capital assets, then you probably should be paying a little bit more tax because you kind of can pay that part in because you're sophisticated enough and knowledgeable enough to be able to have that sort of tax shelter set up. So that's sort of how it works.

Yeah. And the argument I'm going to say is that like, for the, for the, for the people who are incorporated and they have like. Or. Yeah, and they have like, they have a lot of taxable income and they got like, leftover, like, money where they want to redeploy and reinvest, whether they're buying, like, you know, like property in this case or like, even like stocks. Right. You know, and I see a lot of doctors, like, if you see it online, you see a lot of physicians, like, getting upset about this because, like, they don't have a retirement plan, no different than most practice owners. So a lot of, instead of like, you know, so they use the corporation to, to call it delay, you know, the taxes and use the ass. Use the money to reinvest within the corporation that now that like, all of a sudden, like, the taxes have gone up. Right.

Only the capital gains portion, I will say. So I was actually working with another client earlier this week, and they're invested in the hedge fund, but most of their income that they get is from dividend income. So dividend income, that income has not changed how it's being taxed. It's only the capital gains, which is the value of, like, the stock that they own. So if you get a dividend that's being treated the exact same as always. So it's really important in that Scenari scenario, especially to work with your investment advisor to understand, okay, how do I minimize capital gains and maximize all of these other options and which one is actually the best for me? Because, you know, maybe dividends you actually don't want based off of your, your portfolio and what you're looking for. Right. The trade off for paying more tax could be worthwhile by investing in more aggressive stocks that don't necessarily give dividends.

Or even, like, I Know, a lot of people, they just put, they, you know, they just, they just buy those ETFs, you know, like the SPY or, or Triple Q or NASDAQ or SPY, and like, you know, like, I'll make my 5 to 8%, you know, like, based on what the s and P500 does. And. But that's that those are all taxable, the new rates now, right?

Yeah, yeah, they are. The increases in value.

Yeah. And so.

And they're taxable at the new rates in the year that you earn the income as well. Even if you like, let's say that you buy a hundred thousand dollars, it turns into 200,000, but you've never taken that money out from the stock. It's still sitting in the stock. You still have to pay tax on it because it's increased in value during that year.

Oh, is it? Can you repeat that again?

Say that one more time. So if you purchase a stock today and it increases in value and in, in a year from now, it's worth double what it was, you still have to pay tax on it. Even if you've never cashed out that stock, it's not based off of selling the stock. It's based off of the value of the stock increasing at year end.

Yeah, at the end of year, the tax year. Right.

Yeah, exactly. So you might have a stock that doubles. It's super complicated. That's why we look at way too many investment statements.

Like, like, they're relying the banks to like, like track that because there's no way that like, you know, you guys could do that. Like, it'll be just, it would just be so much work. Right?

Yeah. For the most part, it's the banks or like investment advisors providing specific tax forms. Right. Like the bank. A really easy one is the bank will usually issue you a T5 every year for your investments. And so that always has to be included. But it's this, what they call mark to mark.

Right. Like, so it's marked at that price on. Was it April 30th, like the, the last December 31st.

If you're an individual or depending on your tax year end, corporations can have different tax year ends too.

Oh, that sucks. Right? That's horrible.

Right. So you could have like this huge gain and double your money, but you have to pay tax. So then typically you have to sell that original item even though it's still going up. Right. So you're a little bit penalized there too.

Yeah.

So.

And once again, I just want to let everyone know, everyone should actually what we're talking about today is not financial advice. Everyone should have their talk to their accountants and their legal because everyone's in different situation. Right. You know? Right, right. And so but Cassandra, for this specific scenario where like let's just say you're sitting on 100,000 or maybe 500,000 like of investments, like, let's just say like it's some like you're, you're buying like these ETFs, right. You know what have you seen like a lot of like practice owners do like you know, to, to, to.

To.

Counter this, you know. Right.

You know, a lot of people are starting to invest more in real estate.

Okay.

Right. So buying a physical space because then you know the value of the property goes up, but it's different than investing in a stock. Right. Because then you're not having to deal with that until it's actually valued and actually sold. So I actually again talking to a client this morning who's buying a piece of real estate instead of investing in a gic, she's cashing all of her money out today to buy this new house so that it's going to be taxed a little bit differently or at least you're delaying the tax burden. You're not going to completely get rid of it, but at least you don't have to pay it every single year. You only pay it when you sell the house and you actually get the cash for it.

Right. Because they're not going to do the mark to mark on the real estate, but they're going to do on your stocks. Right? You know.

Right. Yeah. Just so because the stocks you can actually get a value. Right? The real estate. How do you possibly know the value unless you list it and actually have.

That's not fair if it's different assets. Right.

You know, hey, I wish I made some of these tax rules but you know, we're just living, I'm the implementer the counting of the tax rules as you mentioned earlier. Right.

Brutal. You know, and so. Yeah, so. So one thing that you're seeing a lot of people do, once again it's not financial advice is that like, you know, like if like from a taxation standpoint it makes more sense to park your excess cash in real estate. You're seeing a lot of people park their cash in real estate versus like stocks so that you don't have to pay tax at year end, you know, because it's not mark to mark.

Right. Real estate or dividend paying stocks where you're actually getting the cash out instead of Reinvesting it. Because then again you're getting the cash and then, okay, you got a, you know, $500 in dividends. Well, at least then you've got $500 to be able to pay the tax burden related to those dividends.

Yeah, but that dividends in stock, you still have to like pay the capital appreciation on that stock, right? You know.

Right, you do. But typically dividend paying stocks don't appreciate in value as much as like equity stocks. Right. Like you dividend paying stocks are typically like, you know, Toronto Hydro and stuff. Right. They're pretty stable. Maybe they'll go up a couple bucks. And so yeah, of course you do have to pay that, but it's a stable in the like the utility sector where they're paying out dividends. Because once a company starts paying out dividends, it's kind of your signal that they're not trying for trajectory growth anymore. Right. They're trying to give back to their investors.

So what happens if you park half a million dollars in bitcoin and it doubled like, you know, like at the end of the year? So then you would have to pay, it's. You have to pay that tax even if you haven't sold it at the end of the year, which means you have to have to liquidate X amount of like dollars to cover the taxes. Right, you know?

Right, exactly. You'd have to sell some of that fantastically appreciated bitcoin to be able to pay for the tax bill on the bitcoin.

Oh geez, this is gonna be interesting. So yeah, so that's a good. And what about the strategy? Because I see some people doing this, like, people are like, okay, you know what, if that's the case, then it makes more sense to do most of your, you know, like I see more people say, well, like, you know, like do more of your asset location with stocks like in your personal account, you know. Right, yeah, like in your TSFA or RRSP or just your personal account. So then at least you have the 250 in the very beginning, right?

So yeah, definitely. With these new rules in place, it can like depending on your income level, it could be more tax optimal to take out an extra dividend from your company and then invest it personally. Right. Either in RSPs or TFSAs to get those super tax shelters or even just, you know, investing in bitcoin personally is probably going to be better than investing in bitcoin in your corporation now, even with the tax burden of that dividend because you're paying a really low personal Tax percentage on that dividend. Again, depending on your personal situation.

Right, well, and also like, you know, like at the end of the year you don't have to like you're not doing that mark to mark where it says like your value has increased. So you have to. Because you know that's not changing on the personal side, it's just on the business side. Right.

Oh, mark to market has always been there on business and corporate. It's just the inclusion of that mark to market is changing from 50 to, to 66%.

No, no, I mean about the valuation of like the, of the stocks.

Right, yeah, the valuation at the end of the year still happens on the personal side. On the personal side, yep. Oh, yes, it should be included.

Yes.

It's always in the year that you have earned that income and whether you cash.

But you would have to sell it and then it gets triggered, is it not?

Nope. It should be based off of the value that you're doing. And that's why like the bank should be issuing these. So if you're investing through a bank or if you're investing through like while simple or cross trade or something, they'll issue you the slips. But there's like more complicated slips than just a T5 where they actually say like the opening value, the closing value, how much did you buy? How much did you sell? And go through like this big calculation of what's the value that you have earned throughout the year.

Okay, the mark to mark. Yes. Yeah, you're right. You know, I'll be honest. Like I just flim through, I just pay for it. Right. You know, so I'm like. And, but I think I'm like, you're.

Like, my accountant said this, I will pay this amount. Right? Yeah, that's what a lot of people do too. They're like, sure, I trust that you just told me that I owe this much in taxes. Like it's fine. Right.

Wow, that's crazy. Right?

So also tax is one of those things that, I mean you can plan for it as much as you possibly can, but especially given how this was just announced a few months ago. Right. And so now you've got a really short window time period for people who have corporations where this is literally, like you mentioned, this is their long term retirement plan is to hold these stocks into their corporation and not sell it until you know, they're in their 70s or their 80s or hopefully their 90s and finally they'll use that money. Right. So they had such a short time period where now everyone's Having to change what they're wanting to do and think about how much to take out. But it's such a short time period. You can't tax optimize. You're basically forced to leave it within the corporation. Corporation and just have these new rules be applied to you. But I think the next generation of people coming up are going to be thinking a lot more about, okay, how much do I leave in the corp, how much do I take out? You know, maybe take out a little bit, maybe an extra 50k every year to invest personally to save some taxes. So I'm not hit with too much of a personal tax burden, but also I'm getting some benefits because otherwise I know that it's going to be taxed way more in the corp side anyway.

Yeah. Now you got to be a little more deliberate because, like, you know, because you, if you, if possible, you want to do most of your. You're investing on, like, stocks, like in your personal account. Right.

So, yeah. And definitely, like, if you own multiple rental properties, you don't want to sell them in the same year, even if you own them personally. Maybe you own two rental properties. Maybe you bought them both in the same year or really close to each other. Well, don't sell them in the same year because if you're making more than 250 in that year, it's not 250 per asset, it's 250 per year. So you want to spread those out and you almost want to not make more than $250,000 of profit. Right. If you can. Right.

I mean, it's only so confusing and in such a short amount of time. Let me ask you something. I know, like, you know, like, let's not get political, but if within the accounting, like, community, like, if there was to be like a change in the government, you know. Right. You know, do you. Is there talks about this being reversed? Like, is it likely to be reversed? Like, if the government, like, if, if there was a change in, like, like in the government.

You know what, Rick, you're actually kind of making me think of how in Ontario specifically, and I'm sure across other provinces as well, but psychotherapists are taxable, but social workers are exempt from sales tax. And so there's a lot of talk about how, you know, eventually maybe massage therapy as well, maybe osteo, maybe all these other services that are health professionals are going to become exempt because, you know, why is chiropractic exempt but massage therapy isn't? And so everyone keeps talking about this, but it's so much money, I think, is my argument as the accountant. Right. Like, I did this sort of quick hit list with one of my clients the other day. Like, it's literally like $300 million. If they were to make psychotherapists no longer HST applicable and to make them exempt instead, how does the government budget for losing $300 million per year? Yeah, right. Like, that's a lot of money. So I think now that it's, it's going to be in the budgets. Right. So if you're including however much extra you're expecting, honestly, it's probably close to like $100 million that they're expecting to get in additional taxes from this new rule. Right. How do you take that out budgeting for $100 million. Right. If they're not getting it from here, they have to get it from somewhere else if they do appeal this rule. And I think that a lot of political platforms do just say, I'm going to remove everything that you don't like about what just happened. And then they kind of never do it. So, you know, I. Not as a politician who's ever run for anything, but I feel like that's what a lot of them say, like, oh, you don't like this? Don't worry, I'll fix it. And then they kind of never do.

Okay, Because. Because there's still a gap in the budget unless there's like massive, like, trimming in, like, you know, in the fiscal, like, budget and stuff. Right.

So, yeah, well. And going for people who are, I mean, quote unquote, super rich. Right. That's the whole point is to tax the people who have, who are sophisticated enough investors to have capital assets within their corporations. Right. That's not your everyday person. That's not the majority of the votes, honestly.

Yeah, yeah, yeah, that's true. So let's talk about bookkeeping, you know, and what are some of the craziest, like maybe financial disasters have you seen with people having bad books? You know, And I'll start with one. You know, like, I, like when I started my practice, like, I actually had my front desk to learn QuickBooks on a, on part a course that you've had, like, they won't buy a course or, or maybe they've done it for like, you know, in their family business. And what we end up realizing, like, I think we end up losing 30, $40,000 because of like, we couldn't catch certain red flags bags and our staff was actually stealing for us because we actually didn't do a Bank wreck, you know, and so that. That's kind of like the. Something that really hit home when you actually have, like, you know, like, bad booking. What is something that you've seen, like, some of these crazy stories, right?

You know, bank wrecks are definitely number one. And with you there. The other thing that I find is that a lot of people who are not accountants and even clinic owners do this as well. Even, like, solopreneurs who are doing their bookkeeping. You're rushing it, right? So you're like, oh, I just have to get this over with because I don't want to do it. But I, you know, my accountant said that I have to do it, and taxes are due, and so whatever. And it's February, and, you know, I just have to get this over with. And so you lose out on so much just, like, critical thinking about, does this even make sense? Right to your point? Okay, you've got, you know, this check that came in for $2,500 or, you know, an expense that came out for three grand. Well, if it came out June last year, today you're not going to remember what it was. You need to be on top of it and actually do it, because otherwise you're not going to be able to catch these things, doing them on a regular basis. Right. Even just remembering what the heck happened in my business, like, actually doing that review on a regular basis. But I definitely see that rushing it because you just want to get over it. I mean, everyone does that, right? That's like, me with my traction. I'm like, oh, my God, it's been seven minutes. I'm done. Like, I'm not putting in 20. Even though I know I'm supposed to, right? Or like stretching after the gym. Never. Because, you know, I just want to get over it. And I'm done with being in the gym. So I think it's that sort of change in mindset and mentality, you know, I haven't really seen. I'm lucky that I haven't seen a lot of people losing out on a lot of money from fraud or anything like that. That so far. And, like, knocking on wood as I say that. But, you know, we also provide bookkeeping services, so it would be bad if I did say that we had seen that.

That's true, too. Maybe what you see with people for a concept you've taken over. Like, maybe it's like it's ap, you know, AP or AR getting, like, so out of whack, you know, that, like.

You know, you know what? Not that we haven't seen that, but I think that Jane or other practice management software gives you such a disability, at least into the sales side. And then, you know, on the cost side, it's more just like you said, doing your bank recs, making sure that you're on top of it, making sure that you have control over your finances. Because I've seen a lot of clinic owners who are just like, oh, someone else does this. And so the person ran payroll four days early because they wanted to get their money in their bank account early before they go on the vacation or something like that. So then the clinic owner is now kind of hoops because they had to pay everyone four days earlier than they were expecting. And like, you know, some cash flow management stuff like that. I'm very lucky. Again, knocking on wood that I have not yet seen fraud.

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Fingers and toes are crossed for that one. You probably have more horror stories than I do, which is not a bad place for me to be.

Well, once it's getting, once you get more staff, it's different. Right? But for some of the, if you're just one or two people, like, I think the books are fairly simple. Right. You know, simpler. Right?

Yeah. I think it's having key people that you can trust. Right. Whether that's, you know, an internal person or outsourcing or whatever that looks like it's like actually being able to trust that person but then not putting too much trust. It's like trust. But I'm going to double check. Like, I trust you, but I want you to send me the bank rec every month. Right? I trust you.

Can you explain to maybe the audience, like, you know, because we're, we're working with more and more like startups right now, like, and you know, Manju is kind of within our community, like she's our startup coach. Like, what is a bank rec and why is it important that you do it each month? Right?

Yeah, absolutely. So a bank reconciliation is basically just making sure that you're taking a look at your bank statements and your credit card statements every month to make sure that those transactions make sense and that you've recorded them in your bookkeeping. So if you're super small and you're just Starting out, you probably only need an Excel file to do your bookkeeping. So you're going to take a look at your business bank statement, your business credit card statement, make sure all those transactions make sense that you know what all of them are. And again, doing that fairly quickly, right? Because if I look at a statement from June of last year, I'm not going to remember anything that happened. But thankfully, if I look at something from May, I'm probably going to remember what all the transactions are to know if they make sense and know what they relate to. And then just recording that, that's kind of the bookkeeping piece. So the bank rec is like actually take a look at your banks, make that the statements make sense, make sure everything's good there.

And then just categorizing them, right, each month, right? So you put them in buckets, right. You know, so that you could run a report that tells you, you know, maybe like some of these financial statements on where you're at. Is that, Is that. Did I get that right, Cassandra?

Yeah, so that would definitely be the bookkeeping side. And definitely, you know, for smaller businesses, again, you might just be putting this into an Excel sheet and taking a look at like, oh, okay, you know, this expense with Google, you know, it's office in general, this expense with Jane office in general, this is my insurance. You put that as insurance expense as my annual due. You put that as business taxes, licenses and membership. You've got your income. You put that in the income section of an Excel file to be able to track. And then of course, if you have something like QuickBooks, you're working in, you know, especially as clinics and especially if you're incorporated and you've got a more sophisticated software, you're categorizing every single transaction that comes through on your bank feed and then just double checking that the PDF bank statements actually match into what you've got. Because sometimes they don't. Sometimes QuickBooks pulls weird things. Or sometimes, like you said, right, Someone can just go in and say, oh, this $40,000, I'm going to put that to other asset. And you might never take a look at that or even see it or understand what's going on with that because you don't take a look at those.

Individual transactions, or maybe you're paying too many subscriptions each month that you should not be paying, you know, or these fraud on your credit card. Right, right.

The number of times that I've helped, I've gone through with clients and I'm like, you paid, you know, $100 to 13 different people. Do you use all of these? Oh, this one I haven't looked at in six months. Okay, cool. Like, maybe you should stop paying that one. Right. It's all about finding value. Right. Especially when it comes to subscriptions and even just your monthly costs. Right. If you're paying something clinic, accelerator, and you find value in it, that's fine. You can continue using that for the rest of your career until the day that you don't find value in it, in which case, I wouldn't even pay a dollar to something that I don't find value in. Right. Making sure that you're aligned with the things that you're actually spending your money on.

Yeah. It's giving you value for sure. Right. You know, and so. So, because what I see, what most practice owners do is they actually don't do bank recs, they don't do bookkeeping. And what they do is at the end of the year, they do tax filing with their accountant because the government forces them to. And then they just email them all your statements. And, you know, and then. And then. And then they ask you all these questions, what is this? And you're like, I don't remember that. Like, Mr. Mr. B encounter. That was a year ago. Right. And then, like, you're kind of making stuff up, you know, and then you're like, like, why did I pay $30,000 on this? Why did I pay like, 5,000 on this? You know? And then you're like, oh, my gosh, I left so much, like, money on the table because I'm not looking at this, like, monthly, right?

Yeah. If you're not realizing how much money you're spending. Right. You have this gut feeling like, oh, I think I'm spending too much. Or like, oh, you know, I don't have as much money this month as I did last month. Why is that? What's going on? Well, the first place you're probably going to look at is your sales, because that's where everyone goes to is like, oh, how much money did I bring in? Did I bring in more? Did I bring in less? But a lot less people are looking at their expenses, which is what I would argue you actually have more control over. Right. You can decide tomorrow to stop paying for Google Ads. Probably not. That's not a good example, but that's the only one that came to mind. But you can decide tomorrow. Oh, I don't want that coming off of my credit card anymore. Whereas your sales, it's a lot more nuanced and it's like a three month lead time to be able to get your sales to increase, right? So that expense management is definitely the biggest one that you have control over to keep more money in your pocket. Again, that example, if you make 120, but you spend $60,000, you only get to keep 60,000. So why don't you make 120, spend 20,000 and then pay a little bit more in tax, but you keep more money in your pocket.

How many of the solopreneurs you work with actually do monthly bookkeeping slash bank recs? You know, is that, is that a small percentage or a big percentage?

Our clients are really great. They're fantastic and they do it all. No, you know what? So the way that our business model works is a little bit differently. So to your point, Rick, most accountants will reach out to you in like February and just say, give me everything, right? We're not like that. We actually have a fall strategy call with every single one of our clients where we have you do all of your bookkeeping up to the date of your strategy call so that we can talk to you about what's happened so far in this year and make some tweaks and changes in strategy. We do this in the fall because that's when everyone's making all of their money. I know everyone's busy, but you're making a lot more money so you can make some really cool impacts and changes and decisions within your business. So we have clients. We have them. Do we have a template on our website where they sort of fill out monthly bookkeeping and at least they have to do it in the fall before they meet with us. So let's say they meet with us in September, they've got it at least up until August. But then when we reach out in February, it's only a couple more months to be able to do. But having that extrinsic motivating factor really helps them to stay on top of things. Right? And some of our clients meet with us twice a year. Some meet with us four times a year. We even have larger clinics that meet with us monthly just to make sure that things are done and that they're reviewing it in a regular basis. And, you know, they should be doing their bank reps every single month. We encourage all of our clients to have separate bank accounts and credit cards. They should be. I mean, that's a, that's the question. I will say. I don't know. I know that they're updating before they meet with me in their annual strategy Call, but I don't know what they're.

Looking from what I see most people do. You know, like, I think maybe some of your clients are maybe a little more progressive, but most of the times I would say, like, they don't do it, you know, and they probably leave until the end of the year. Right. You know? Right. But it's almost like too late by that time. You're just doing it for like you're, you're not doing it for running your, your practice and your operation. You're just doing it because of government gives you a deadline and you have to do or you have to pay like the stupid penalty. Right?

Yeah. That's like how every single clinician does their charting when they're on vacation. Right. Same type of mindset there.

That's a good one. How would you explain the. How would you explain in simple language, you know, what a profit loss statement is and balance sheet and how to use it as a practice owner, you know, or a sole preneur?

Right? Yeah, absolutely. So the profit and loss is probably the one that everyone is most excited about. Your profit and loss is going to show details about the income that you earned, how much, and preferably how you earned that income. So, for example, let's say you're one corporation, you have multiple locations where you're definitely going to want to break out your sales by location so that you can understand how much you're making from each location. Maybe, and I see this a lot with psychotherapy collectives, maybe you want to break that out into by person so that you can see how each practitioner is doing and trending. Or if you're a multidisciplinary clinic, you'll break out by each discipline. You'll have Cairo and Osteo and all of that separately. And it just tells you, how did you earn income? This is super important because let's say you did like a Google Ad campaign to push your chiropractic services, but your chiro sales aren't increasing at all. Then you know that that ad's not working, gives you really good feedback on, on that and even just how your clinicians are doing as well. The feedback that I get from a lot of clinic owners is that, you know, I see that in practice management software. Jane has reports. I'm up to date on that. But I think it's different when you look at the expenses because you've got your income section, your cost of goods sold for anything like your supplements or any directly related expenses, and then all of your expenses down at the bottom, which is the big piece that practice management misses. So how much did you pay your clinicians who are working for you? How much did you pay for rent? How much did you pay an office in general? How much did you pay on advertising? And then that gets you down to the actual number that you are keeping for yourself. And if that's not a high enough number, then that's where you're going to want to make some adjustments either to the income by increasing sales or by cutting some of those costs that you can actually keep more of your money.

There's only two ways to make money is cut your expenses or to grow your revenue.

Right. Or, you know, some magic third way that includes, I don't know, spell or something like that. If you find that one, please let me know. I'll also take it.

Yeah, yeah. And then at the bottom of the bottom of that statement, it's called. It's called. It's called profit.

We typically call it profit. I know for clinic accelerator people, they're probably used to hearing the term ebitda. You guys talk about that quite a bit. A few of my clients have tried to ingrain in me the less of EBITDA that they've received from clinic accelerator.

EBITDA is like, EBITDA is like a Big Mac. And then profit before profit after taxes is like a cheeseburger, you know?

Yeah, yeah, definitely.

Is that a good way to explain it?

I. Yeah, it's like, you know, taking that gigantic Big Mac and then just, you know, you're left with like, I don't even. Not even a cheeseburger. Like a hamburger at the end of the day. Right. But those numbers you're not even going to get until the end of the year. Right. Your accountant calculates those numbers only once at the end of the year, so it's not as useful, which is why taking out taxes and depreciation, which are only annual things make sense. And focusing on that sort of profit per month. I don't even. Some clinics that we work with the amount of adjusting entries you have to do at the end of the year makes December look so weird. And then they're like, well, this looks weird. I'm like, well, I don't know what to tell you. I have to match your balance sheet and your income statement into your tax return. So it's just going to look weird now. Right. That's just some of the things that you have to do at the end of the year. Right. Recording, we're thinking.

Yeah. And the reason why we talk about EBITDA is that, like, we're looking at, from a valuation standpoint, you know.

Right.

You know, what is your clinic worth based on ebitda, but also most, most especially adjusted ebitda where. Because a lot of, like, owners or practice owners, like, they shove like a lot of their personal expenses in there when they shouldn't be. Right. But they do. Right. You know, and so actually, well, at.

A minimum, they've got their own salary that you can adjust out for. Right. And like, maybe the vehicle depending on the type of business model that you've got set up. That I can understand. Right.

So adjust that out to factor in as like, hey, what is the true profit or earnings or of your business? Right. You know, so let's talk about balance sheet. How do you explain, like, to someone, how do you. How does a practice owner use a balance sheet like each month or. They don't, you know.

Yeah. So a balance sheet sometimes is used. So for corporations, definitely important for individuals, it's a little bit harder to create a balance sheet. Right. Because you don't want to throw your house on a balance sheet that's not going to give you useful information. But a balance sheet is basically just, just at this exact date, what does the corporation own? So it has this much 20,000 in its bank account. It's got 15,000 in accounts receivable. It's got some leasehold improvements that has been slowly been amortized over the course of its life. So you really want to focus on that accounts receivable number. You don't want it to be too big because you want to keep getting your money into your own pocket. And then you also see your accounts payable. How much do you owe to your clinicians? What are your liabilities? What do you still have to pay off? And in a perfect world, your assets are going to be more than the liabilities that you have. Have.

Yeah. And. And there's always that line, like that shareholder like equity. What does that mean? Like, in simple terms, so when people look at, they're like, oh, that's what that is. Like assets, liabilities. I think people, like, understand what that is. Right?

Yeah. So shareholders equity is essentially just how much money has this corporation ever made in its entire lifetime? That is, you know, something that you could give to the shareholders. So if I'm the sole shareholder of a company, if my company over its lifetime has earned $300,000, I could take out $300,000 at any time because that is owed to me, because that's what the corporation has Made. It's not always perfect because sometimes you end up using some of that equity to do more leasehold improvements and stuff, so you don't actually have the cash left available. But that's the idea is that that's profit that the company has made that you would be able to take out.

Yeah. And when you draw that out, that number gets smaller. Right? You know, it's.

Yeah, exactly. Yeah. Through, like typically through a dividend or you, I mean, you could put it on salary, but then that's going to be reflected within the profit and loss and then the retained earnings will go down as well. Well, okay, cool.

That's too much detail for most people.

I was literally just thinking that. I was like, that's a really, that's a big one. But yeah, you can, you know, when you take the money out, it does get smaller. However you end up taking it out. There's so many different tax optimal ways of being able to take it out or leaving it in. Right. For your tax planning for your retirement.

Let's talk about this. We did talk about this earlier. What it, what actually is a taxable, like, what is a tax deductible expense? You know, like. Because I think some people, people really push it, you know, and they're misclassifying personal expenses as business ones. Right.

You know, so, yeah, so in the simplest form is that if you spend money in order to make money within your business, to have your business and to operate your business, then it's tax deductible. So if you're buying your insurance, of course you have your insurance so that you can safely practice. Right. If you're buying your annual membership dues, of course you're doing that so you can have your license to practice in the first place. If you're doing, doing, you know, continuing education, well, your college requires that otherwise you lose your license. So you're spending all of that money.

And my mortgage, I'm actually doing my charting at home because I don't, I can't do it at the practice. Is that, is that tax deductible?

You know what, your home office, it's either the, the rules actually changed during the pandemic because a lot of people move to have bigger houses because of the pandemic. So the rule for home office is either if you work from home more than 50% of the time or you have a dedicated space. So if you've got, like I do here, my spare office is set up. This is totally like easy to be able to take that deduction and use If I'm, you know, and I work from home 100 of the time as well, so that's a little bit easy. So if anyone is trying to do that, set up a dedicated office space within your, your home to be able to take that square footage and do all of your charting there so that you've got your desk, and then that's going to be audit proof from cra. If you just say, oh, hey, I do charting, you know, charting is not going to be 50% of your work. I hope that would be a very boring.

Cassandra. When I sleep, sleep, I'm also thinking about work. Like, and, like, it's like, because. And I wake up middle of the night, you know, like, and I'm, I'm doing like, you know, like business planning and marketing stuff. Like, does that count too, Cassandra, you.

Sleeping more than 50 of the time and thinking about work? I don't know. I think. Sierra, you know, it's so funny. I get these questions all the time and I'm like, you know, to a certain extent, I just implement the rules, right? Like, you know, I'm the, I'm the accountant. I'm the good person who has had ethics thrown into me like, there is no tomorrow. I just listen to what Siri says and not that I don't, you know, try to do things like, okay, guys, have a, have a dedicated space. Make sure that in your spare bedroom you do have an office. So that we can call that your dedicated space. But it gets a little bit hard, right? The other question that I get a lot is from massage therapists who have to wash their own sheets. You know, can I include the square footage of, of my laundry room? I say, sure, why not? But other accountants might have different opinions.

What up? What about the car and the vehicle?

If you're going to and from like the same place every time, you, you can't deduct it. And if you have a corporation and you have it with you, company is paying for that car, then it's actually a taxable benefit to you. You have to pay tax on it anyways. It's just a matter of who's actually paying for that lease.

Okay, what about like, I'm going to a Kundaka Saga learning event in Hawaii, you know, and I'm learning everything about business, you know? You know, and it's a three day event, you know, like, is that entire trip tax deductible?

So as long as it's within a reasonable geographic distance, meaning that you can't get that training in. I don't know, Toronto or Vancouver, somewhere closer. Right. That's the only place that they offer that training. Training. Then you could actually go the weekend before or stay the weekend after. If it starts on a Monday or ends on a Friday, that whole thing is deductible. Absolutely.

Okay. And, and had you gone through an audit with a sole preneur or like a practice, like through these unreasonable like expenses like.

So we've had knocking on what again, as I say this, so we've gone through a lot of sales tax audit like gsthsc, so many of those which are honestly pretty reasonable. We haven't had had any issues where CRA has denied any of the claims, thankfully. And then income tax so far we just had, you know, sporadic asks, you know, prove to me your donations. Prove to me this one specific expense. Because if it's, you know, double or triple what you spent last year, that's where CRA is going to flag it. So typically, you know, CRA just kind of looks at your stuff. They, they actually when we file your taxes, we enter in the industry code of, you know, what industry do you work in? If that I put in and you know, your friend has the same industry code and you know, hundreds of thousands of people across Canada have that same industry code and everything looks pretty much the same or it's normal for you. CRA is not really going to flag it. Right. But let's say you usually do 200 of donations per year and last year you did 10,000. Well, now they're going to ask questions, right? Maybe last year your, your travel expense was like $50. Now this year it's like $30,000. They're gonna be like, wow, this is huge. This is big. This is outside of the industry norm. That's when they're going to start flagging you and ask you for those receipts. But we're very lucky that so far all of our audits have passed.

So you're saying that these red, the red flags are usually when you type in your initial code and certain type of expenses seem to be way higher than the previous year and compared to your peers within that industry. That's what you're saying.

Exactly. Yeah. So it's very normal to have super high business taxes, licenses and memberships. Right. But probably not a lot of people are spending, you know, 30,000 on, on travel as an example. Right. Maybe they're spending, you know, five, six thousand dollars on continuing education. That can be a very normal thing that a lot of people would have. But sometimes also in the first year that you have that CRA might ask some follow up questions for your case specifically, depending on how long your history has been of being a clinic owner or sole proprietor.

Okay, cool, cool. And, and I'm just curious, like, you know, you also work with like multiple, you know, you work with like some practices that have like multiple like clinicians working in there, right? And payroll is very complicated. When you're with some of these independent contractors or we paid them fee split like whether they're on Jane or some other emr. Like is there a simple. Like have you seen a, have you seen a simple payroll process for these. Call it commission based, like you know, contractors that work at your business.

You know what I recently learned about the Jane compensation report and it has become absolutely my best friend. Right. Just running the compensation report, it's based off of cash coming in. It just applies your split it and then you just sort of take that number and yeah, it's manual to put that into the software into like, you know, E transfer or however it is that you pay them. For most clients, we end up just sort of running the sales report and then just applying the percentage because it's really easy to run a sales report for the previous month.

And this is what it is like push it out, right?

Yeah, yeah.

But then like where things get complicated is like you get a percent for this like item. You get like if you sell product it'll be 50%. Like, you know what I mean? Like it's, it's very.

Yeah, yeah. So that all depends on how you set up your emr, right? And like definitely as accountants, I mean I feel so comfortable setting up Excel files and setting up models and setting up whatever just to be able to do, right? So if you've got, you know, product and you've got treatment income and you've got, you know, all these different things for your income category and then you've got, you know, even those items or whatever, right? You can take the subtotal, you can take the sales tax and then you can apply the percentage there. It's just how you set up your EMR system to make it a usable information instead of it being manual. Because that's like the worst case scenario is definitely that manual thing. I've also seen some clients where they're trying to give bigger tiers. Like, okay, if you make more than 10,000 this month, I'm going to give you an extra 5% on this extra one. Well, that's all manual and you can't get out of that. So just know if you're going to offer that to the clinicians that are working for you, that you're stuck doing a very manual process. And again, there's a lot that we can build out in Excel with templates and have stuff that's ready to go that clinic owners can use every single time on their own or Admin can use, but there's going to be a piece of it that's manual if you're going outside of just a straight percentage split.

Okay. Yeah, that's, that's. Yeah. I hate these complicated, like, structures because I don't know if it's even worth it at the end of the day because of all the manual. The manual reports and the errors that kind of. Kind of come of it, like, you know, especially when they start questioning, you know, questioning you. Right.

So, yeah, if you don't know Excel, it can be really intimidating. One of my biggest frustrations right now is that I wish that there was a way for QuickBooks to somehow be related to, you know, Jane and other EMR systems. Because right now, now, you know, Jane will give you whatever after the Gene Payments transaction, but that could be exempt, that could be taxable. That could be so many different services. So you have to come up with a way of actually allocating that, because if you get 100 bucks in your bank account, it doesn't really mean anything, to be honest.

Have you talked to Allison at Jane yet about, like, integrating, like, you know, QuickBooks into Jane? You know, I think that would save a lot of.

I. I have been told that they're not wanting to do it because every accountant does it differently. So it's impossible, possible to satisfy everyone. That is the last that I had heard.

Okay, yeah, yeah. It just makes sense.

But I'll just leave it at that. Yeah.

Just to do it, you know?

Right, Absolutely. Yeah. It's just like, if you can have Shopify and Squarespace integrated, why can't you do Jane? Right.

Yeah, yeah, yeah. That's super cool. And then, and then. So when you do that, are you. Are you basing it like a sales report of what's build or what's. What's collected on the, on the revenue side?

So your revenue is always what is billed, regardless of if you've collected the cash or not, because you've actually completed the service. Right. You had the massage. You're just waiting two, three weeks for the insurance company to pay for it. It's always based off of what's billed. That's called a performance obligation. Right. You've had that Session, the money is owed to you. That's what's going to be in your accounts receivable until you actually get the money.

Okay. And then it shows up as like ar. Right, you know, on your line. Right, you know, exactly.

Yeah.

Which is terrible. And like your day daily, like, you know, your transactions are not up to date, you know, then you will not know what your AR is.

Right, I agree. Right. So that's where having the right people in to actually take care of that, whether it's, you know, having the, the clinicians actually keeping it up to date, whether it's having an admin person, maybe it's outsourcing it to a virtual assistant group or something like that. Right. Just make sure that that's actually up to date because otherwise if you don't have useful information about your business, how are you going to make changes?

I've seen ARS build up over time and like at the end of the day like, oh my God, like it's $100,000 a year but none of that is collectible. Like it's like done for the past 10 years.

Like just write it off, please.

Yeah, but you already paid out your clinicians on this already, right? You know, so it's like it doesn't make sense.

Well, that's where the comp report is really great because it's cash based. Right. So you're not going to pay out until you actually collect it. So that 100,000, you would have never paid it out in the first place. Right. Because yeah, that sales. But that's not received.

Yeah. So I'm going to start a. If what, what have you seen in your community like in terms of, terms of funding that is available for say a practitioner that wants to start a practice or want to buy a practice, you know. Right.

So if you're just starting out, if any newly incorporated company qualifies for the government, it's the CSBFL loan. It's available through any bank that you work with and it's an almost guaranteed government funding where you only have to put 10% down, the rest is funded and it's like you just go through any bank. Pardon me, is there a max on.

How much they would.

I haven't seen one. I've seen some clients, like I saw someone get, you know, 500,000 the other day. I'm working with another client for 300,000 right now. So, you know, you can get a pretty hefty sum just depending on what size of a clinic you're looking to buy. But this loan is Available through any bank. Right. You can do it through RBC or TD or CIBC or whoever you want to go through.

And if you want a buyer practice, right, you know, like where they will fund up to like 80, 90%, is that right?

No, that's also for like physical assets, like leasehold improvements and like your adjustment tables and stuff like that as well. Like, there's some really great funding available.

So I could start a, let's just say a 2,000 square feet practice, you know, and it'll cost me, let's just say 300 bucks a square feet. It'll cost me $600,000. So you're saying that is also eligible, right, Even if there's no like cash flow associated with it, right?

Yeah, for new corporations. And then you just have to create like a business, business model and like projections of your next three to five years. It's not going to give you any money for working capital. So like in order to pay, you know, people like your employees, you have to pay that or you have to get alternate funding maybe through BDC is another one that can be really good where there's pretty good funding through there. But yeah, it'll pay for physical assets once you provide the proof of the receipt. Right. So like, oh, hey, I just paid my contractor 100 grand. Please give me this. It's not going to give you money to pay for your monthly rent, but it'll give you money to pay for the contractor for the leasehold improvement.

And you probably have to put a personal guarantee on your. You have to have assets to back back that up. Like, so if you are like, you don't have any assets, like, you know, you know, like, let's just say you don't have a house, you know, to secure it. Like, is there any other option or.

No, you know, it depends on the bank. So for example, CIBC is like obsessed with chiropractors right now. I think they will give them any loan that they ever possibly could. It's a personal guarantee. But it. But without assets, right, because especially when you're a new grad and you're graduating, right. You're going to have a bunch of debt. Debt, Right. And probably, you know, student debt, maybe even through that bank itself. But they're going based off trajectory, right? They know what a chiropractor can make and so that's why they're a lot more lenient. And then of course, going to a bank that you have a relationship with, you're going to have a lot more options. And you know, These new things that you're buying, like the adjustment table, well, the bank's going to have a lien on it so that if you end up not paying them, they're going to take the adjustment table and at least they're going to be able to sell it.

Okay. Okay. Wow. Cool. So, and, and, and like you said, anything that's physical. Right. You know, is, is covered. Right. So you can't do capital or, you know, you can't, you can't do for bookkeeping services. Right.

You know, so I wish. That would be great. Although I did find out. So BDC offers loans sort of when you, when you're tapped out at the banks, you, you can go to bdc. And they're also like a crown corporation, so they're fairly flexible as well. And what they do is they actually, they have consulting services, but they'll finance the consulting services. Super interesting thing that I just learned about last week. So, you know, if you're in a pickle and wanting to get a lot of opinions on your business, maybe BDC isn't the industry experts that you gu have on this fantastic podcast, but there are options out there for things like that.

Yeah, there's also like, I see a lot of people in our community go that like there's a lot of these like grants you get for like innovation or marketing and stuff. And you work with certain type of marketing consultants and I've seen them digital.

Grants if you're all online. Yeah, yeah, yeah.

And, and like those are, those are like 5, 10,000 bucks too. Right. You know. Right.

So yeah, I saw one client is obsessed with grants. I think she gets one like every three or four months because she just keeps applying because no one's applying to these grants. We are definitely not the grant experts. But the only downside with grants is that technically it's taxable income to you. So just keep that in mind. If you get a ten thousand dollar grant but you only spend, you know, a couple grand on doing that thing that you said that you would, well then you have to pay tax on the difference of $7,000 that you kept for yourself.

Yeah, yeah. Which is fine. You know, like, like they all fit within the small business tax, which is, you know, very small, you know.

Right, yeah.

So. And what are the top grants that you're seeing right now?

You know, we're really not involved on the grant side. I know we see clients who are getting grants, but we've never been involved in the grant application process. Cool.

Wow. What I really enjoyed this conversation Just geeking out on like accounting, finance and all the bean counter stuff. Right. So Cassandra, I'm curious, like how do, how do people find out more about you and what you do? Because like I really, I really enjoyed our conversation today. Right.

Yeah. Right. I think you already mentioned our Instagram. We're on there constantly promoting all the good things, fighting the good fight out there. So at Tag Group Accounting, also our website, tag groupaccounting.ca we have a blog that we post a new one every couple of weeks where we do go into lots of detail about that new capital gains tax as well with some examples in case anyone's wanting to geek out on that even more or maybe Rick, you're going to go and check that out afterwards just to read about it, to have some words to computer screen. And we've got lots of resources on there if anyone's interested in working with us. I myself am not accepting new clients right now, but we do have a really great team who's accepting clients and now is a really good time to reach out to a new accountant. Make sure that you find someone that you actually want to work with come stress time in early next year.

Yeah, super cool. You know, and hopefully we could get you more back to the show and also in our community. Right. So thanks for, thanks for coming, Cassandra.

Yeah, of course. Thanks so much, Rick, for having me. Thanks everyone.

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