Finding out that your Toronto or Mississauga small business has been selected for a Canadian Revenue Agency (CRA) tax audit can be a frightening and stressful experience. And if you haven’t been keeping up to date with your financial records using a bookkeeping service or other professional support, you may find yourself feeling overwhelmed and unsure of what to do.
When someone receives notice that they have been selected for an audit, they often assume that they must have made an error in the financial documents submitted to the CRA. While this may be true, the CRA conducts audits for a variety of reasons, such as:
If you receive a notice from the CRA, it will include details about the audit including what specifically to submit and where the audit will take place. In some cases an auditor will visit your place of business or you may be able to mail in the information they are looking for (always send in copies, not originals). In other cases you may be required to appear at the offices of the CRA.
The most common issues that arise in an audit that cause reassessment are:
Typically, the issues listed above are a result of poor bookkeeping and insufficient time and effort spent on keeping financial records in good order. Disorderly financial records tend to put businesses at risk! Without question, a CRA tax auditor will ask to see your books, records and bank account statements. Be aware that having incomplete financial records usually results in a longer and more extensive audit.
An audit really highlights the importance of having good records and drives home the value of having a good bookkeeper. When you work with a professional bookkeeping service to support your Toronto or Mississauga small business, you will have peace of mind that your financial records are accurate, transparent and up to date. That means that if a CRA audit notice does appear in your mailbox, you will be ready to deal with it. Not only will a bookkeeping service be able to keep your records in order, but they can also help you through an audit by deciphering financial terms and requirements you may need to fulfill.
No one wants to be audited, but if you are, understand that it is your responsibility to provide the CRA with what they need within the stated timeframe. Take a proactive approach to your company’s financial health and find a bookkeeper that can support your business.
Bookkeeping for GTA supports Toronto and Mississauga small businesses with a wide variety of bookkeeping services such as handling accounts payable and receivable, tax filing and providing bookkeeping classes for business owners and their employees. We look after your books, which gives you more time to look after your business. Contact us to find out more about how we can support your success.