Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
It’s been well established—bookkeeping is an important aspect of any business. A certified bookkeeper in Ontario will provide valuable services that your company needs to function properly. If you want to ensure that your books are in order, then invest in a bookkeeper or hire a chartered professional accountant for these services. If you want a convenient option, bookkeeping services in Burlington, Ontario are some ways to do it.
What is the main benefit of hiring certified bookkeepers? It's simple—they help you stay compliant with government regulations! As a business owner, you must already be aware that non-compliance could lead to a CRA audit, which also means more headaches than necessary.
This article tackles how bookkeeping can protect your business during a CRA audit and why you should take the time to find the best possible certified professionals for this job!
There are a few things you should know about CRA audits. First of all, the CRA can audit any business at any time. They don't need to have any specific reason to conduct an audit—they can simply decide to do one at their own discretion. The CRA is not obliged to notify you ahead of time that they are coming. They may show up at your business unannounced and demand to check your books.
Keep in mind that CRA has the authority to assess penalties and interest on any taxes you owe. This reassessment could amount to thousands or even tens of thousands of dollars, so it is important to make sure your books are in order and that you are compliant with local government regulations. Bookkeeping services in Hamilton, Ontario, must adhere to Hamilton’s laws, while bookkeeping services in Windsor, Ontario, must adhere to Windsor’s—you might get overwhelmed at first, but it’s really just a matter of hiring a trusted team of professionals with the local tax know-how.
The CRA does not have a specific set of criteria when choosing which businesses to audit. Instead, it conducts audits based on a number of reasons. Other factors that could lead to an audit are:
They examine whether there's a writing discrepancy between the amount of cash in the business records and the amount certified by an auditor.
An auditor evaluates the books to ensure that all income has been recorded, all deductions have been approved, and all expenses are classified correctly. The auditor also checks your balance sheet to make sure everything adds up accurately.
Below are the other things that an auditor can do:
It was mentioned earlier that CRA could conduct audits at their own discretion. They can conduct the audit without notification. However, the CRA respects taxpayers' time, and the auditor usually gives a mail or phone call that includes the time, date, and location of the audit. Most of the time, audits take place in the taxpayers' residence, business address, or representative's office. Audits may also take place in the CRA office, and that means that you have a chance to be assigned to an auditor located outside of your region.
Before the audit begins, it's automatic that the auditor will present you with supporting credentials for further identification and validation of authority. You need to prepare your books and other financial statements needed for the audit. Finally, the auditor provides a detailed receipt of any borrowed documents and returns them the soonest.
REMINDER: Financial data and any records related to your tax information aren't allowed to be sent via email because of security reasons. The auditor will give you instructions on how you can send documents online using the CRA's secured portals. Hire the best bookkeeping services for a proper compilation of your tax records.
For more information about a tax service, please read Income Tax Services and the Different Types of Income Taxes They Can Help You With, written by one of our CPAs here in Unloop.
The auditor examines books, information, and documents collectively called records that also include the following:
A number of possibilities may happen after the audit. Moreover, it can be closed if the auditor deems the previous assessment valid and correct. However, you may be subjected to reassessment if discrepancies are found, leading to more taxes owed or a refund. You will receive a letter no matter what the outcome is. In case you are for reassessment, you have until 30 days to conform with the proposal.
You can disagree with the proposal for reassessment as long as you can explain your reason and provide supporting documents to establish your position.
A certified bookkeeper in Ontario is worth investing in because it will definitely help you be compliant with government regulations. In addition, having a certified professional on your side can give you confidence during the audit from CRA and save you more time for discrepancy-free documents.Hire the best bookkeeping services today. Contact Unloop NOW!
Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.