Em­power Your Busi­ness With Help From a Pro­fes­sional Book­keeper

An in­vest­ment in peace of mind

BC Business Magazine - - Legacy Advantage -

Le­gacy Ad­van­tage is a CPA firm that ex­clu­sively pro­vides CPA- level book­keep­ing. They em­power their clients with peace of mind, clar­ity, and fi­nan­cial in­tel­li­gence. Le­gacy Ad­van­tage com­prises a team of 15 pro­fes­sion­als with two of­fices in Metro Van­cou­ver.

Bob Wang, CPA, CA and pres­i­dent of Le­gacy Ad­van­tage ex­plains the value of hav­ing a

CPA- level book­keeper and how you can hire one:

How do I de­ter­mine if I should hire a book­keeper?

I had one client who had tried to save money by do­ing his own book­keep­ing. He then had to go through a pay­roll au­dit and wound up ow­ing much more than it would have cost had he sought pro­fes­sional help.

If you are say­ing th­ese things to your­self, you should prob­a­bly look at hir­ing a pro­fes­sional book­keeper:

“My re­ceipts are pil­ing up; I’m feel­ing over­whelmed.” “I don’t know who owes me money.” “I have no idea how much money I made last month.” “Am I do­ing pay­roll cor­rectly?”

What are the ad­van­tages of a pro­fes­sional book­keep­ing ser­vice?

A pro­fes­sional book­keeper will pro­vide peace of mind be­cause you won’t have sur­prises. You can be re­as­sured that all govern­ment agen­cies are paid, and that your books are cor­rect. You will know ex­actly who you owe, and who owes you.

As well, a good book­keeper will pro­vide clar­ity. Many busi­ness own­ers see num­bers and their brains just shut off. It’s up to the book­keeper to paint the fi­nan­cial pic­ture, us­ing data such as ra­tios, KPIS and trends.

How do I hire the right book­keep­ing ser­vice?

Let me just say that hir­ing a book­keeper with­out a fi­nan­cial back­ground is dif­fi­cult. It’s like try­ing to play Fan­tasy Foot­ball when you don’t even know what a line­backer is. Here is what I look for:

First, just like with any hir­ing de­ci­sion, en­sure that there is a cul­tural fit, and you feel com­fort­able with him/her.

From there, you can ask ques­tions that can as­sess their skill level, such as: “You made an er­ror. You in­voiced the cus­tomer, and when the cus­tomer paid us, you recorded it as a sale again. What’s the jour­nal en­try that fixes this prob­lem?” (An­swer: Dr. Sales Cr. A/R).

Or you could ask how they would han­dle a sub­ledger that doesn’t make sense: “Items in A/P are al­ready paid—and how can you fix this with a jour­nal en­try?” (An­swer: Dr. A/P, Cr. Ex­pense).

Lastly, ask them to ex­plain to you the dif­fer­ence be­tween a Bal­ance Sheet, an In­come State­ment and a Cash-flow State­ment. If their ex­pla­na­tion leaves you more con­fused, then it means they don’t fully un­der­stand it them­selves. Move on.

It’s al­ways worth­while to pay a CPA- level book­keeper to have that peace of mind and know that you’re not going to have any sur­prises. Also, it’s in­cred­i­bly pow­er­ful to have clar­ity for your busi­ness. You can mea­sure your­self against last month, last year, or even the in­dus­try av­er­age. This in­sight alone is worth the cost. With th­ese in­sights, you can not only op­ti­mize your op­er­a­tions, you can also iden­tify when your next big op­por­tu­ni­ties lie.

of proper sources and ref­er­ences” when it came to quota lease prices and practices. Oth­ers, like Art David­son, a Saanich-based fish­er­man and pres­i­dent of the BC Long­line Fish­er­men's As­so­ci­a­tion, coun­tered that though the ITQ sys­tem works well for peo­ple who own all or much of the quota they fish, it also acts an in­vest­ment ve­hi­cle that un­fairly dis­trib­utes wealth away from the fish­er­men who bring the re­source to mar­ket.

But ac­cord­ing to Jeff Grout, the DFO'S Pa­cific re­gion re­source man­ager for salmon, govern­ment isn't forc­ing ITQS down the throats of commercial fish­er­men. Grout says his de­part­ment in­forms its fish­ery man­age­ment de­ci­sions by seek­ing in­put from area har­vest com­mit­tees con­sist­ing of fish­er­men on the ground. The DFO has only im­ple­mented ITQS in the salmon sec­tor on a sea­son-by­sea­son ba­sis in se­lect seine and troll fish­eries, and Grout ad­mits they have faced stiff op­po­si­tion from the gill­net fleet.

“There will al­ways be in­de­pen­dent fish­er­men who have dif­fer­ent ideas, but we think ITQS have been ef­fec­tive in terms of man­ag­ing the fleets and as­sur­ing that they fish within al­lo­ca­tions,” he says. “It gives us more cer­tainty in terms of catch.”

As for the cost of leas­ing and buy­ing quota, Grout says the DFO doesn't col­lect data on pri­vate trans­ac­tions be­tween fish­er­men. For Pinker­ton, that points to a big prob­lem: with ITQS, the agency has unleashed a share­crop­ping of the ocean that is squeez­ing fish­er­men.

If the UFAWU'S Thorkel­son rep­re­sents the lit­tle guy—the deck­hands, boat cap­tains and fish plant work­ers— Rob Morley, Can­fisco's vice-pres­i­dent of pro­duc­tion and cor­po­rate de­vel­op­ment, sym­bol­izes what the UFAWU, Pinker­ton and their al­lies say is an­other side of the West Coast fish­ery: mo­nop­o­liz­ing and in­creas­ingly dom­i­nant.

But Morley says the facts prove oth­er­wise. In June 2016, be­fore the fed­eral Stand­ing Com­mit­tee on Fish­eries and Oceans, he tes­ti­fied that Can­fisco buys fish from a fleet of 860 ves­sels and owns eight pro­cess­ing fa­cil­i­ties but owns just 4 per cent of all salmon li­cences, as well as 21 per cent of ground­fish quota, 15 per cent of hake quota, 3 per cent of hal­ibut quota and 2 per cent of sable­fish quota. Morley con­cluded that “con­trary to mis­in­formed re­ports, the li­cens­ing poli­cies in B.C. have not re­sulted in in­creas­ing con­cen­tra­tion or con­trol by Can­fisco and the com­pa­nies we have merged with.”

His tes­ti­mony doesn't paint a com­plete pic­ture: the com­pany has a 50 per cent stake in an undis­closed num­ber of fish­ing ves­sels up and down the coast that gives Can­fisco ex­clu­sive ac­cess to buy the catch.

Although the last can­nery closed nearly two years ago un­der Can­fisco's watch, the bright spot in B.C.'S salmon sec­tor is the grow­ing de­mand for fresh­frozen fil­lets. Here the prov­ince has an ad­van­tage over Alaska be­cause it's closer to North American mar­kets, Morley says. By elim­i­nat­ing the race-to-fish men­tal­ity, ITQS bet­ter serve con­sumers, he be­lieves.

“ITQS make sense be­cause it spreads out the fish­ing ef­fort over a longer pe­riod of time and en­ables us to get the best high-qual­ity prod­uct to mar­ket in a timely man­ner,” Morley ex­plains from Can­fisco's head­quar­ters in Rich­mond.

But Pinker­ton and Thorkel­son also say there are mis­con­cep­tions about commercial fish­er­men be­ing overly com­pet­i­tive and prone to ex­ploit­ing a stock to near ex­tinc­tion, as be­fell the East Coast cod fish­ery. For decades the West Coast in­dus­try self-or­ga­nized through what was known as a layup sys­tem, whereby cap­tains would keep their boats tied up at the dock for sev­eral days af­ter land­ing their catch, giv­ing the rest of the fleet a chance to take its share. This ap­proach died out in the 1970s, some say due to a lack of govern­ment sup­port.

ITQS even­tu­ally filled that void, but this frame­work for fish­eries man­age­ment has taken heat else­where. Early on, New Zealand was more en­thu­si­as­tic than other na­tions in adopt­ing the mar­ket­based ap­proach to quo­tas. In a 2016 paper, Fiona Mccor­mack, an an­thro­pol­o­gist at the Univer­sity of Waikato in Hamil­ton, noted that New Zealand has been glob­ally rec­og­nized for its ef­fi­cient and sus­tain­able fish­eries man­age­ment, largely based on its whole­sale adop­tion of ITQS. But this adu­la­tion masks some un­set­tling side ef­fects, Mccor­mack ar­gued, namely the “in­equitable dis­tri­bu­tion of fish­ing rights, the rel­a­tive

power of quota hold­ers vis-à-vis pro­duc­ers, the lack of at­ten­tion given to the in­ter­gen­er­a­tional con­cerns of fish­er­men and their com­mu­ni­ties, the emer­gence of new class struc­tures” and other is­sues.

The DFO'S man­age­ment of West Coast fish­eries has tilted to­ward con­ser­va­tion since the poli­cies of the 1996 Mif­flin Plan and sub­se­quent li­cence buy­back pro­grams re­duced the num­ber of salmon li­cences by more than half. B.C.'S five salmon species—coho, sock­eye, Chi­nook, pink and chum—com­prise more than 8,000 ge­net­i­cally unique stocks that spawn in myr­iad rivers, streams, creeks and even road­side ditches. The feds re­cently re­newed their com­mit­ment to salmon con­ser­va­tion, in­clud­ing a pledge to im­ple­ment all of former B.C. Supreme Court jus­tice Bruce Co­hen's rec­om­men­da­tions from the in­quiry into the 2009 col­lapse of the Fraser River sock­eye run.

Stuart Nel­son, a Sur­rey-based fish­eries con­sul­tant, be­lieves the crit­ics are com­par­ing ITQS to some utopia that no longer ex­ists, when salmon were so abun­dant that the first Euro­peans to visit B.C. claimed they could walk across streams on the backs of spawn­ing fish. Man­age­ment of commercial fish­ing had to change from a free-for-all to some­thing more con­trolled, Nel­son says. Unlike SFU'S Pinker­ton, he sees a pos­i­tive side to climb­ing quota leas­ing costs: “It means quota must have some value.”

As with most other in­dus­tries, Nel­son adds, young peo­ple can ex­pect to pay their dues—as a crew mem­ber or a

cap­tain leas­ing quota—to work their way up to an own­er­ship po­si­tion.

That's an over­sim­pli­fi­ca­tion, says Sonia Stro­bel, co-founder and man­ag­ing di­rec­tor of Rich­mond- based Skip­per Otto's. If Can­fisco is the Go­liath of commercial fish­ing, Skip­per Otto's is the David. Stro­bel says she and her hus­band, Shaun, launched it in 2008 in re­sponse to the pres­sure on fam­ily fish­ing op­er­a­tions from fac­tors such as the es­ca­lat­ing cost of leas­ing and buy­ing quota, the con­sol­i­da­tion of pro­cess­ing and the clo­sure of public docks that once let fish­er­men off­load their catch for free. ( North­ern fish­er­men now have one choice— pay to use a Can­fisco-owned dock in Prince Ru­pert.)

“My fa­ther- in­law, Otto, has gill­net­ted for salmon since 1969, and my hus­band has fished for most of his life,” Stro­bel says. “Dur­ing that time there has been a steady de­cline in the num­ber of in­de­pen­dent fish­ing fam­i­lies. Our goal is to not only make a profit but also sup­port fish­er­men with a fair liv­ing wage.”

Skip­per Otto's is based on a com­mu­nity-sup­ported agri­cul­ture model, in which mem­bers pay up­front for a cer­tain amount of seafood that varies de­pend­ing on what's sea­son­ally and an­nu­ally avail­able. Par­tic­i­pat­ing fish­er­men have the se­cu­rity of a guar­an­teed mar­ket for their catch, while con­sumers know who caught the fish, how it was caught and where the money goes. Yet a look at Skip­per Otto's ros­ter of 30 or so mostly sil­ver-haired fish­er­men con­firms that salmon fish­ing is in­creas­ingly an old man's game.

The out­fit may be a small player com­pared to Can­fisco, but Stro­bel says it's grow­ing: “Last year we took on four new fish­er­men, and we're getting in­quiries all the time.”

At press time, Skip­per Otto's was com­plet­ing a mem­o­ran­dum of un­der- stand­ing that will en­able it to build a 10,000-square-foot pro­cess­ing fa­cil­ity on DFO land in Steve­ston. Hope­fully, Stro­bel says, con­struc­tion will be fin­ished in time for 2018's peak Fraser sock­eye run, which is ex­pected to be in Au­gust and Septem­ber.

Fish­er­men are an in­di­vid­u­al­is­tic lot, averse to over­bear­ing govern­ment in­tru­sion. Spend a few min­utes with the likes of Quincy Sam­ple on his boat, or visit any dock where trollers, sein­ers and gill­net­ters tie up, and you'll get the idea. Back on the wa­ter, Sam­ple shows the grit and op­ti­mism that is per­haps the only rea­son he con­tin­ues to rein­vest in commercial fish­ing. Debt has been his con­stant com­pan­ion. When Sam­ple was 22, he owed $220,000 on a salmon li­cence; he hasn't stopped in­vest­ing, buy­ing quota when he can and leas­ing what­ever he can't af­ford to buy. Re­cently he bought a salmon trolling li­cence for $ 160,000. Sam­ple owns 15 per cent of his hal­ibut quota and leases the rest of what he catches from so- called arm­chair fish­er­men. “It's like gold,” he says.

He shrugs about the DFO'S hopes to in­tro­duce the ITQ sys­tem across the board in the salmon sec­tor. Quota is ex­pen­sive, Sam­ple ad­mits, but there's an un­ex­pected up­side to this mar­ket-based mech­a­nism for ac­cess to commercial fish­ing op­por­tu­ni­ties. Pre­vi­ously, walk­ing into a bank to ask for fi­nanc­ing with not much more than a beat-up fish boat for col­lat­eral was a non­starter. But banks now rec­og­nize quota as a valu­able as­set, en­abling fish­er­men like Sam­ple to lever­age it for fi­nanc­ing.

“The prob­lem with the big com­pa­nies is that they have deep pock­ets and can bid up the price of quota. The Jimmy Pat­ti­sons of the world are own­ing the in­dus­try,” he says. “But you know, there will al­ways be fires to put out. I'll al­ways fish.”

“My fa­ther-in-law, Otto, has gill­net­ted for salmon since 1969, and my hus­band has fished for most of his life. Dur­ing that time there has been a steady de­cline in the num­ber of in­de­pen­dent fish­ing fam­i­lies. Our goal is to not only make a profit but also sup­port fish­er­men with a fair liv­ing wage”

Some of the Le­gacy Ad­van­tage team: Bob Wang, David Nguyen, Anna Popova, (bot­tom row) Lorna Jones and Terry Gosal.

IN THE SAME BOAT Shaun and Sonia Stro­bel founded Skip­per Otto's to sup­port in­de­pen­dent fish­er­men

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