Accounting for small business starts with basic record keeping. Accurate recording of daily transactions is not only required by the government, it is also the basis for internal financial reporting that will assist you in making good business decisions.
The process begins with a structure that will provide a proper framework for financial analysis and culminates with reports and controls needed to grow your company.
Ratio analysis can help you ensure a healthy balance sheet that will allow you to reinvest in your business or even carry your business through slow growth periods. It can indicate areas of strengths to further build on, or areas of weakness that require attention.
As a small business owner, the most important goal in your tax planning should be to take advantage of the capital gains deduction that is available to holders of small business shares. This allows the individual holder of these shares to realize up to $800,000 of income, tax free. For a Mom and Pop operation, that's a combined $1.6 million. This can only be done through careful tax planning and structuring your business in such a way as to take advantage of this opportunity.
Financial statements are the periodic report card that tells you and every reader of the statements how successful your business is. It is a tool that is used by lenders and investors to help them decide what role they can play in your business.
Financial statements must be prepared in accordance with current accounting standards and properly represent the financial position of your company.
Tax planning extends to GST returns. You may be able to qualify for the quick method of GST reporting where you can actual remit les GST to the Government than what you have collected. This tax savings is called the quick method of GST reporting. This can be done on an annual basis and takes careful tax planning.
Proprietor and Partnership Returns
Proprietor and partner returns can range from simple home based business to complex entities. If you are involved in one of these, your business operations must be reported on your individual income tax return. There are often shared expenses between business and personal expenses, such as a personal vehicle or office space in the home. These expense must be carefully considered to ensure you stay on side of the tax rules regarding these shared expenses, and ensuring you are not missing any deductions to help lower your taxes.
Audit Assistance for corporations
Audits are something that every business should be prepared for. Our standard corporate year end package includes a Support Binder which ensures you are ready. Audits can arise from random selection, or from operating in an industry that CRA is monitoring, or there are items of interest unique to your tax filing. Regardless, the process should be easy and painless. And result in no changes to you returns.
Audits require that you substantiate what you report on your tax returns. Putting together the documentation need to support your claims can be a nightmare when some time has passed and you have archived the information. Or you may be requested to present the information in a different manner than what you had originally prepared While you should be able to support everything you reported, putting the information together in a format required by an auditor, could be a nightmare. And usually results in time spent by you or additional fees from your accountant.
This can all be avoided by simply preparing for this at each year end. No additional time or accounting fees need to be incurred. Simply provide our Support Binder to the auditor and wait for their report.