Resources

A practical year-end checklist

Close the books to the year-end date you actually use, not to “sometime in the spring.” The return is much faster when the ledger already agrees with the bank.

• Reconcile every bank, credit card, and loan account through the year-end date.
• List who still owes you, and who you still owe, including HST on those balances.
• Count inventory if you hold goods for sale. A guess becomes a problem if CRA asks how you got there.
• Set aside support for vehicle use, home-office space, and meals. A total without a log is hard to defend.
• Confirm your GST/HST periods and whether instalments were paid.
• Document shareholder loans and owner draws. Mixing personal spending through the company account needs a clear trail.
• Payroll: taxable benefits, vacation, and the T4s you will issue.
• Keep last year’s return and any CRA letters with the file.

If the year is already behind, say so at the first meeting. Cleanup is normal work. Hiding the gap only moves it into the filing deadline.

What to gather before a CRA review

Read the letter before you start pulling boxes. It names the tax, the years, and often the lines they want to see. Respond to that, completely, by the date they give you.

• The review or audit letter itself, including every page.
• The returns filed for the years named.
• Bank statements covering those periods.
• Sales invoices and a way to tie deposits to those invoices.
• Receipts or statements for the expenses they listed.
• Payroll records if the questions touch wages or source deductions.

Do not ignore the letter because the year “felt fine.” Deadlines in the correspondence are real. If something in the original filing was wrong, it is better to correct it in the response than to hope it is not noticed.

We can prepare the reply, the schedules, and the covering letter, and we can correspond with CRA for you. Bring the letter to the consultation and we will tell you what the request actually is.

How to prepare a financing package

Lenders fund cash flow they can see. A strong package is short, consistent, and boring in the right way: the same revenue figure appears in the plan, the statements, and the tax return.

• Two years of financial statements or filed returns, if the business has them.
• Interim numbers to a recent month, with the bank reconciled.
• A debt list: balance, payment, rate, and what the debt is for.
• A short plan that says what the money will do and how it gets paid back.
• For many owner-managed files, a personal net-worth statement. Ask the lender before you build one.

We do not lend, and we do not promise an approval. We organize the accounting so the application matches the business. If the books are three quarters behind, fix that before you book the bank meeting.

Payroll remittances, without the scramble

Once you pay employees, you are in the payroll system with CRA. Source deductions for income tax, CPP, and EI come off the pay and have to be remitted on the schedule CRA assigns from your withholding amounts. That schedule is not optional, and it is not the same for every employer.

• Open and keep a payroll program account before the first pay.
• Run pay on a set cycle. Vacation pay and statutory holidays belong in that cycle, not in a year-end cleanup.
• Remit when your frequency says to remit. Late remittances attract penalty and interest even when the T4s are eventually right.
• Issue records of employment when someone leaves, and T4s after the calendar year.
• Keep a record of taxable benefits. They belong on the slip, not only in a side spreadsheet.

Ontario employment standards sit beside the tax rules. We handle the payroll accounting and the CRA remittances. If a question is really about employment law, we will say so and you can take it to counsel.