CRA TAX COMPLIANCE - What you need to know
Updated: Apr 8, 2020
Whether you are new to business, or have dealt with The Canada Revenue Agency before, you may feel intimidated when it comes to taxes and tax compliance. CRA compliant bookkeeping is crucial in avoiding unneccessary penalties and interest, but there are several points to consider. Whether your tackling your bookkeeping solo (DIY), or with a Quickbooks Certified Bookkeeper, the following is an outline of CRA Compliance best practices.
FILE ON TIME
Filing deadlines are non-negotiable with The Canada Revenue Agency. It is your responsibility to file on time, everytime. GST, RST, payroll, and tax returns, all have different remittance dates. Take the time to note both the filing dates and payment deadlines. Consider setting reminders in your calendar. Click here for common filing dates.
KEEP ACCURATE RECORDS
Your records can be as simple as a paper ledger, or as sophisticated as automated bookkeeping software, such as Quickbooks Online, but they must be accurate.
KEEP DOCUMENTS ORGANIZED
As every business is different, the way in which you file your records is yours to choose - Date, Supplier, Category, etc. Be prepared to provide source documentation to CRA periodically. (get and stay organized)
KEEP UP-TO-DATE RECORDS
Reconcile bank/credit card statements regularly. Be sure to set aside the appropriate amount of time to keep your records up-to-date.
Why Stay Compliant?
It protects your business. Not only can The Canada Revenue Agency issue late filing penalties, when you fail to file or pay on time, they can assess interest as high as 50%. This can seriously impact business cash flow, and in extreme cases result in CRA seizing bank accounts. In addition to avoiding costly penalties, staying compliant means tax audits are less likely to occur, preparing for an audit is less stressful and less time consuming, and auditors are more likely to rule in your favour with accurate, organized documentation easily available. (Audit-Ready Bookkeeping)
Maintaining your books to CRA standards has it’s challenges, so when do you call in the pros? If you’re developing your business plan, consult with a bookkeeper early in the process to help get started on the best foot. If you’re a seasoned entrepreneur, it’s always a good plan to meet regularly with a professional bookkeeper who is able to help interpret the numbers and ensure accuracy.
ProStrata-G would like to answer your complicated bookkeeping questions. If your small business has been affected by non-compliance, or you’d like to know more about maintaining CRA compliance within your unique business structure, leave a brief comment below. If we are able to help address your small business concern, we’d like to feature your story in our next article.