Working with your Corporation Part 9: Record Keeping

We would like to make this very important comment: “Good Record Keeping is a must!” Good record keeping is a must for 2 main reasons:

a.      You should always know where your business stands financially

b.      You will need all documentation and paper trails if/when you get audited

Create yourself a simple filing system that matches our bookkeeping intake checklist (Found on our website under our downloads section). Use inboxes, folders or a filing system that works for you and your routine.  It should be as simple as putting all paperwork and receipts into the right inbox or folder daily.  If you are on a monthly package with Kustom Design, we have envelopes with the checklist on them that are available to give us your paperwork (records) every month. 

Important Note on Record Keeping: Good Record Keeping also allows for good bookkeeping which in turn brings accuracy and savings!  Also if and when you are audited, your records need to be in great order, because if CRA finds a mess and has to reassess then they may keep coming back year after year!

We also mentioned in an earlier blog that it is important to file and pay taxes on time when they are due.  Here are some guidelines in this area:

Our goal is to always have you pay lower taxes.  In planning with Kustom Design we can typically help our clients pay little to no tax. However, you must plan ahead!  When taxes are due, they must be paid on time, otherwise interest does accrue.  Also, if you don’t file your returns on time, penalty and interest can occur.  Because the government is in deficit, many of the penalty rates have been raised considerably, so always file on time. Payroll, Corporate tax and other penalties and interest can put businesses into such a financial strain that some never get out from beneath the debt load.  Here are the main returns that must be filed on time:

1.      Personal Tax Return

2.      Corporate Tax Returns

3.      Payroll Remittance Filing

4.      T Slip and Summary filing

5.      GST Remittance Filing

IMPORTANT NOTE REGARDING PAYING TAX: If you do not put away funds for Corporate Taxes and GST, chances are you will not be able to pay the taxes when they are due.  We recommend putting 15-20% of all revenues aside in a tax savings account.

In the next section, we have the due dates of each of these filings and returns for you.  Always file on time to at least avoid penalties, and avoid interest where possible!