Managing your books and keeping your files organised might not be the most glamorous part of owning a small business, but it is one of the most important. Without a clear sense of your company’s financial health, it’s virtually impossible to make smart decisions for the future of the enterprise. That’s not to mention the similar importance of staying prepared for tax filings and even the dreaded audit.
When it comes to small business bookkeeping in Calgary, what kinds of requirements do the CRA expect you to meet? Staying up to date on the tax-related reporting demands placed on your company is crucial for avoiding unwelcome surprises. Here’s what to know.
While the CRA only sets out some general guidelines for how you should organise your records, they do stress that they must be “reliable and complete.” A jumbled filing cabinet full of statements from this week, last month, and last year is not likely to be an easy-to-use resource for making the right filings. Though the system you choose is up to you, you must ensure you are organising and retaining records in a way that will let you quickly find supporting documentation in the event of an audit.
Don’t forget that you will need to retain records related to any given return for six years from the end of the documents’ original tax year. You can usually safely discard and destroy documents older than six years from their origin, but long-term recordkeeping might be a smart choice depending on your business. Don’t get caught without critical paperwork should you somehow trigger an audit years after your original filing.
Small businesses must accurately account for all the income streams, expenses, and losses they report on their tax filings. According to the CRA, there are numerous documents that small businesses should retain. These include income records such as invoices, bank records, sales contracts, and other related paperwork. Likewise, you should also maintain a detailed record of receipts to report your expenses. Don’t report an expense if you don’t have the receipts to back up the claim. If you plan to claim capital cost allowances for assets under your business’s ownership, maintain the purchasing documentation related to the assets for as long as possible.
When your passion lies in executing your vision rather than running the numbers, augmenting your capabilities with third-party help is a smart choice. At Reion, we provide top-shelf small business accounting in Calgary using the latest digital tools and the most up-to-date understanding of CRA requirements and tax codes. Delivering exceptional outcomes and peace of mind for our clients is what we do best. We’ve made it our mission to make it easy for you to understand the demands placed on your business and to meet them with ease. Connect with our team today to find out about your next steps.