The best offense is defense.
If you keep perfect records, they'll take a quick look and leave.
Ten best practices include:
- Keep your records current, use full accrual method, not just adjustments at year end.
- Complete all compliance by the deadlines and reconcile the account balance with what you're filing, don't just blindly file based on a report without cross checking to see what the amount owing is and that it agrees to what you are filing.
- Reconcile all of your accounts and compliance reporting weekly/monthly/quarterly, don't wait until year end to reconcile.
- Requirement documentation that includes business reason, and where meals, names, and store your purchases in alpha order, reconcile your payables, record all purchases through payables, never directly from the bank or credit card statements. Exception, bank charges with no GST/HST
- Store your employee information by employee and have contracts and TD1's for each employee in a permanent file.
- Store your sales electronically and have them available, or store in date order.
- Store your detailed deposit information with all of your account statements, and document every deposit on those statements as to its source, including gifts and transfers.
- Documenting deposits and transfers is as important as documenting your proof of payment.
- Include shareholder/owner/managers in payroll, don't accept the method of let's just take draws and do an annual adjustment.
- Monitor for debit balances in the shareholder loan account and rectify immediately or risk assessment under S. 80.4 imputed interest on debit balances.
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