A Beginner’s Guide To Getting Ready For Corporation Year-End
Whether you have maintained a year-round record of business activities or need to file documents in the last minute, it is critical to focus on getting your business ready for the year-end.
To make sure your year-end goes as smoothly as possible, Bookkeeping Bizz has formulated a Beginner’s Guide to getting ready for corporation year-end. Through this guide, we want to help you understand the steps that need to be taken before heading into an accountant’s office for your year-end preparations.
Track your expenses: It is essential to organize and reorganize your financial documents and information throughout the year, rather than gathering it all at once. Keeping systematic folders for each expense (travel, meals, phone, materials, subcontractors, etc.) will help your accountant tremendously and lowers your accounting service invoice.
The Next Steps
Work with an accountant: Hiring an accountant can benefit your business at different stages of growth. From a business plan to company formation, loan application to a government audit, an accountant can take away your stress and make life easier for you at each step.
When doing bookkeeping for your business, here are the documents that you will need to submit to your accountant:
a. Electronic copy of your bookkeeping records for the year, and any passwords required to access the information.
b. Financial statements for the year (balance sheet, income statement, cash flow statement).
c. Payroll records (if you have employees).
d. Asset additions or disposals during the year (land, equipment, vehicles, etc.).
e. Business use-of-home details (if you are running a home-based business).
f. Motor vehicle expense information (percentage used for business, mileage log, etc.).
g. Income tax installment assessments and notice of assessments.
If your accountant carries out bookkeeping for you throughout the year, you need to provide them with the final batch of receipts, invoices and bank statements for the company. If you meet them only at year-end, prepare your documents in advance and bring them in at the earliest. If you want to take advantage of the tax benefits throughout the year, there is no one better than your accountant to seek financial advice.
Advice From The Pros
Keep your accountant in the loop: It is crucial to meet your accountant regularly, preferably every quarter. Do not postpone it for the next month as your business will only get more demanding, with workload increasing every day or week. Besides, make a note of significant and unusual transactions all year round and hand a copy to your accountant at year-end or whenever you see them.
Avoid common mistakes: People think that merely the bank and credit card statements will prove sufficient to the CRA. However, the CRA only accepts receipts that you obtain from the purchase point. These receipts have essential information like GST/HST numbers of the business you acquired along with the date, and details of your purchase.
In case your bank statements go missing, you will not have your full year worth of statements, so the bank/CC account cannot be reconciled, and you may fail to obtain usable expenses. Most importantly, your financial statements will show incorrect information which can lead to a wrong business decision and even a CRA audit.
Update your paperwork on a daily basis: If you do your own bookkeeping, put receipts into organized folders and send them to your accountant for updating every three months. This will make your business life smoother and also prevents you from missing out on tax opportunities.
At Bookkeeping Bizz, our goal is to meet all your accounting, tax, and financial needs with the highest form of accuracy and professionalism. We strive to serve you better and are committed to helping you with your personal and business growth. Our professional services include accounting, bookkeeping, tax, advisory, and business consulting.