chartered accountant near me Archives

February 1, 2023February 10, 2023

Looking to Hand Down the Family Business? Read This.

Ready to retire and relax? Want to hand down your business to your family members? This requires planning. Small business succession planning is difficult as it’s complex. People are often resistant to change and there’s potential for conflict, but no one stays in the same position forever. Illness, retirement, death and/or turnover are inevitable. If a company fails to plan, knowledge may be lost and opportunities missed. Succession planning provides a business with a framework that ensures continuity when change occurs. It allows you to hand down the family business.

What is succession planning?

Succession planning is the process of identifying and developing future leaders/owners of your company. This strategy prepares your business for all contingencies by training high-quality people for advancement. It ensures that your business continues to run smoothly after key people retire, resign, move on to other opportunities or pass away. This process involves the coaching and development of designated successors.

Why develop a succession plan?

There are multiple benefits and reasons for succession planning for your business.

- Lower hiring costs
- Stronger internal hires
- Shorter vacancies for key positions
- Better career development
- Increased employee engagement
- Higher performance
- Increased talent retention
- Higher job satisfaction
- Disaster-proofs the business
- Identifies the most-qualified future leaders
- Creates a structure for training and development
- Maintains brand identity
- Creates opportunities for career advancement
- Helps a company plan for the long-term
- Eases financing of transitions
- Provides an emergency plan
- Reduces risk of loss
- Enables you to hand the company on to family members, in good working condition

How do you develop a succession plan?

There are three distinct phases of succession planning:

- First Phase – Identification: Establish who you are as a company and what you want. Then, consider all key roles in your organization determining the day-to-day import of each position and the impact that would occur if that position was suddenly vacant. Identify multiple candidates for each position (a short list) and teach them the values, guidelines and vision of the business.
- Phase Two – Selection: This is where a specific candidate is chosen for each role. The successor may be the person next in line in the organizational chart but may also be a promising employee from another position or a family member. Look for those who display the skills necessary to survive and thrive in the new post. Objectively consider your shortlist for performance, skills and emotional intelligence. Choose a candidate who is a lifelong learner and both self and socially aware.
- Phase Three – Training: This phase involves scheduled professional development for the chosen successor(s). This may include job rotation (for knowledge and experience), mentoring in soft skills (communication, interpersonal relations, empathy, diplomacy), position shadowing and/or taking over when the person presently in the role is on vacation.
- Phase Four – Transition: This involves the present position holder retiring/stepping down and the chosen successor formally taking the role.

Succession planning keeps a business moving forward, prepares a company for inevitable changes, assists in retaining strong performers, supports the continuity critical to a company’s future and allows you to hand down an optimally functioning company to family members. A succession plan is a good idea at the start-up, growth and maturity stages of a company. It’s worth the investment of time and effort.

Want to hand down your company to family members? Need help with succession planning for your business? Contact Cook and Company Accountants. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company use their experience and expertise to help you. We assist you in making your business a success. Contact us for a complimentary consultation.

January 1, 2023January 19, 2023

Creating a Year-End Financial Statement

Public companies, small businesses and non-profit organizations prepare a yearly report to provide information about past performance and to determine future goals. This year-end financial statement is an annual financial document that’s provided to shareholders, potential investors and analysts. It’s a good source of information about business performance and financial well-being.

What is a year-end financial statement?

Financial statements are records that communicate the activities and the financial performance of a business. They generally include a balance sheet, an income statement and a cash flow statement. They indicate:

How much money is made
How much money is spent
What the company owns
What the company owes
The net value of the business
Where the money came from and where it went
The amount of money kept in the company

Why does a business need a year-end financial statement?

Companies generally hire an accountant to prepare their financial statements and then use the reports as a management tool to affect positive change within their organization. There are several reasons why a business needs financial statements:

For performance measurement: Financial statements provide a gauge of performance that helps you review the success of your business and communicate your past, present, and future prospects to stakeholders. It allows you to assess management’s stewardship of the company, the viability of the business and is a starting point in forecasting future performance.

For loan applications/investors: Many lenders will not consider a loan application without up-to-date financial reports. The information in a financial statement forms the foundation of a bank’s decision on whether to fund a venture or a company. A business can use financial statements to persuade an investor to buy into the company, or to attract a venture partner who can put money into a new project.

For the CRA: In order to file corporate tax returns, Canadian corporations are required to produce financial statements. To avoid penalties, a company needs to have financial statements prepared on a yearly basis.

For regulating cash flow: Financial statements help a business anticipate borrowing needs. Reviewing your statements can reveal trends your business can use in its cash flow strategies.

For decision-making: Financial statements provide decision-makers within a company with the up-to-date information necessary to make effective choices. Financial reports are used to provide shareholders, partners and/or potential investors with key business metrics.

What is included in a year-end financial statement?

Financial statements are a set of documents showing a company’s current financial status. They communicate what your business owns, what it owes at a fixed point in time and they provide details about your assets, liabilities and equity. There are three reports that all businesses require for tax, financing and investing purposes and therefore are included in a year-end statement.

- Balance sheet: The balance sheet is a snapshot of a company’s performance at a given time. It identifies the company’s assets (inventory, equipment, vehicles, furniture, property, cash), liabilities (short-term debts, long-term loans, accounts payable) and equity (what would be left if assets were sold and debts paid). The balance sheet is an indication of the health of a business and helps business owners make decisions regarding how much inventory to order, if assets should be sold and whether a cash infusion is called for. Lenders use a company’s balance sheet to evaluate collateral and risk.
- Income statement: The income statement, also known as a profit and loss statement, summarizes a company’s revenue and expenses for a given period of time. This report shows a company’s bottom line. The income statement consists of four sections; revenues (net sales), cost of goods sold (inventory, freight, labour, indirect expenses), expenses (wages, advertising, depreciation, payroll taxes, office expenses, utilities) and other income (assets sold, interests on loans/investments). The income statement is the document you show to potential lenders/investors and is necessary during tax season. It indicates the profitability of a business’s current operations and guides management in how to expand or cut operations for greater profits.
- Cash flow statement: The cash flow statement reports the cash and cash equivalents that flow into and out of a company in a given time period. It measures how much cash a company has on hand. Your income statement shows your company’s bottom line while the cash flow statement shows how your business earns cash and where it goes. The information in this report is used to project how much revenue can be expected in the future, estimate upcoming expenses and make judgments regarding revenue gaps that may result in non-payment of business liabilities and debts. There are three activities documented in a cash flow statement; operations (accounts receivable, accounts payable, wages, merchandise expenses), investments (equipment and merchandise purchased, purchase of an asset, loans made to vendors, payments related to a merger or acquisition) and financing (bank loans, shareholder monies, personal investments, dividend payments, loan repayments, sale of company stocks). This report informs management of how much cash is available to pay expenses and invest in the business. Large discrepancies between the cash flow statement and the income statement help identify problems in a business’s operations.

Financial statements are a key tool for operating a business. They’re a snapshot of a company’s finances, provide critical information about a business’ performance and are the foundation for planning a company’s future course. These statements are used by bankers, investors and others to assess the health and liquidity of a business. A year-end financial statement shows the sustainability of a business and allows directors to make educated financial decisions to ensure success. Ask your Chartered professional accountant for help creating year-end financial statements for your business. They have the knowledge, experience and skill to help your company make wise financial decisions.

Need help with your company’s financial statements? Looking for an accountant for your company? Contact Cook and Company Accountants. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company use their experience and expertise to help your business. We assist you in making your business a success. Contact us for a complimentary consultation.

December 1, 2022December 8, 2022

What to Look for in an Accountant

You’ve decided it’s time to hire an accountant for your business. There are so many accounting firms to choose from! Which should you select? It’s in your company’s best interests to have an experienced, capable person(s) handling your finances. A good accountant provides tax advice, helps you strategize, is affordable, has strong entrepreneurial skills, communicates well, adjusts to your risk tolerance and saves you time and money. An excellent accountant is priceless! Choosing the right accountant can be a daunting task. This is a decision that requires time, careful research and thought. The following are some tips to help you choose the best accounting firm for your company.

Consider their location: Are you partial to face-to-face meetings? If so, choosing an accountant located nearby is important. Are you willing to collaborate online? If the answer is yes, your company can use cloud-based technology, email, video-conferencing and/or secure accounting software to review data with your accountant. This allows you to choose an accountant located anywhere in the world.

Pay attention to qualifications: When deciding which accounting company is right for your business, look closely at their designation. It’s wise to employ a Chartered Professional Accountant (CPA). These financial professionals work in various accounting environments (government, private companies, private practice) and offer services including tax planning, financial document preparation and business valuations. CPAs are highly trained. To become a CPA in Canada you must obtain an undergraduate degree, enroll in the CPA professional education program, complete 30 months of relevant accounting experience, finish four education modules and pass the three-day Uniform Evaluation exam. When deciding which accounting firm to employ, don’t be shy about asking for evidence of qualifications. Ask to see their CPA member number. Search the CPA Canada database for their name. Inquire regarding what training courses they have recently attended.

Consider experience: It’s important to have experienced people preparing your business’ tax returns and financial documents. Check to see if the accounting firm(s) you are considering has worked with companies in your sector. Ask what size of businesses they work with. Find out if their clients have grown and developed under the firm’s guidance.

Note their knowledge base: Ask questions regarding the services offered and pay attention to how the accountant(s) answer. A reputable accounting business has a deep base of knowledge to draw upon when supporting your business. A good firm will manage your finances, improve cash flow management, enhance business growth and work within your budget.

Notice how they answer questions: Can you understand the accountant? Do they overuse jargon and/or technical terms, making it difficult to comprehend their communication? Can they explain the tax laws in a way that you can grasp? Are they approachable? Choose accountants who are willing to ensure that you understand them.

Look closely at their team: Take note of the office staff. How do they interact with you? When working with an accounting firm, you often deal with more than the CPA. Choose a firm with cordial, kind, knowledgeable and helpful staff.

Get referrals: Take advantage of your network of business associates and advisors when choosing an accountant. Find out what firm other similar business owners recommend. Use your LinkedIn profile to search for accountants who are highly recommended. Consult with friends and family members regarding what accountant they use and why.

Do background checks: Talk to some of the clients of the firm you’re considering working with. This provides first-hand information about the accountant, their style, their effectiveness and the type of relationships they develop with clients.

Think about software: Accountants often have preferred accounting software. If your company uses a different type of software there can be difficulty in sharing information. Look for an accountant willing to use the same software as your business. Another option is to choose collaborative, cloud-based accounting software with encryption built in.

Interview several firms: Interview prospective accountants, comparing information regarding several accounting firms before making a selection. The similarities and contrasts between accountants help clarify the type of accountant that you need and want.

Always negotiate fees: Some accountants charge by the hour, others charge a monthly retainer while others charge a percentage of your turnover. Get written quotations from all accountants being considered. Negotiate the fee structure to acquire the style that works for your company.

Picking the right accountant for your business can be a challenge. A good accounting firm keeps track of your business’ income/assets/liabilities, examines financial records, assists with tax filing/bookkeeping/payroll, offers tax advice, prepares financial statements and helps with business decisions. An accountant is closely involved with the operation of your company making the decision of which firm to work with a serious endeavour. Choose wisely.

Looking for an accountant for your company? Contact Cook and Company Accountants. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company use their experience and expertise to make tax time a breeze. We assist you in making your business a success. Contact us for a complimentary consultation.

November 1, 2022November 4, 2022

Tips to Prepare for a Business Audit

To ensure that Canadian businesses are following the tax laws, the CRA undertakes business audits. Though hearing your company will be audited may make you sweat, if you’re prepared, an audit need not engender fear. The best way to deal with an audit request is to understand the process and to provide the information to the auditor in a timely manner.

What is a tax audit: A tax audit is a detailed examination of a business’ books and records by the Canadian Revenue Agency (CRA) to confirm whether that business is fulfilling its tax obligations (income tax, deductions, employee benefits, payroll remittances, GST/HST), following tax laws and receiving the benefits and refunds they are entitled to. It’s conducted after the business has received a notice of assessment and is intended to check that their records support their tax return. Audits are meant to ensure that the Canadian tax is fair for all and maintain confidence in the integrity of Canada’s tax system.

What are the most common issues that prompt a business audit?

The CRA will consider an audit if they discover:

Multiple or repeated errors on your tax returns
Major changes in income or expenses
Repeated losses
Expenses not in line with others in your industry
Under-reported earnings
Overly large charitable donations
Unsubstantiated home office deductions
Discrepancies between GST returns and Tax returns
Shareholder loans that should be considered income
Missing information
Audit of a related party
A lifestyle incongruent with your declared income
Real estate transactions
Vehicle expenses
Informant tips

What is the procedure for a business audit?

A CRA auditor contacts a business by mail or phone and sets a date, time and location for the audit. A review may be held at your place of business, your representative’s/accountant’s office or at a CRA office. You’ll receive the agent’s contact information and be informed of the scope of the audit. You’ll be asked to provide supporting documents for the review. The auditor may make copies of your records and/or borrow some of your documents. The agent will discuss with you any questions that arise during the audit and address your concerns.

What documents are required for a business audit?

The documents requested may include:

Business records (ledgers, journals, invoices, receipts, contracts, rental records, bank statements)
Personal records (bank statements, mortgage documents, credit card statements)
Records of other individuals related to the business (spouse, family members, corporations, partnerships, trusts)
Records from your accountant that relate to the books, records and tax returns of your business

How can a business prepare for an audit?

There are a number of steps your business can take to retain readiness for an audit and/or to prepare once an audit notice is received.

Keep accurate, detailed records: Well-kept records (business records, personal records, accountant’s records, records of individuals related to the business, minutes of meetings, organizational documents, transfers and deposits for bank/investment/credit card accounts) ease the process of an audit. Review your documents several times and work with an experienced business accountant. Be thorough. Accurate, detailed records are your best tool for surviving audit procedures.

Consider automated solutions: Expense-tracking apps serve as a record of transactions in case of an audit. Choose one that easily syncs with your accounting software. It saves time and makes for easy management.
Aim for consistency: The CRA values overall consistency in business tax returns. Your company’s return must be consistent with those of others in your industry. Abnormal income, compared to your peers and competitors, may cause additional scrutiny. Discrepancies between sales and the total reported on line 101 of your GST/HST return may also result in an audit.
Know the red flags: Become informed regarding the details that make a business prone to audit requests. Speak with your accountant about these indicators and how to navigate them.
Keep abreast of accounting standards: Accounting standards constantly change. Familiarize yourself with accounting developments that may affect your organization and the way you track data and/or operate.
Reconcile all accounts: If your business receives a notice of audit, pay all bills, remit employee expense claims and collect all invoices. Resolve administrative issues. This enables accurate projections and analysis during an audit.
Identify significant changes such as current projects, recent investments, new revenue streams, recent grants/government support received, changes in control systems and/or new processes introduced. This helps you prepare for the review.
Divide responsibilities: Break down the tasks required for audit preparation and assign them to competent employees. Set appropriate deadlines for the completion of the assignments. This makes the audit process manageable.
Ask questions: Once an audit notice is received, create clarity by asking the auditor for details regarding requirements. Be clear on when documentation is required. Transparency between your business and the auditor makes audit preparation and completion faster and easier.
Seek the help of a professional: If your business receives an audit notice, contact your CPA and arrange representation during the audit. Request assistance preparing the documents required.
Create ease for the auditor: Set up a quiet, comfortable workspace for the auditor and have all documents organized. Make it easy for the auditor to move quickly through your materials.
Know your rights: If you disagree with the CRA’s assessment, contact the auditor, explain your concerns and provide documents to support your position. If you’re not able to resolve the disagreement, you have the right to appeal. Your CPA can help with this process.

Filing taxes for a business is a complicated procedure. A Chartered Professional Accountant will ensure your tax return is complete and accurate, reduce the chances of your file being chosen for an audit and ensure you’re rewarded the deductions you’re entitled to. Should your business receive an audit notice, your CPA will support you through the process, ensuring it transpires as smoothly and quickly as possible.

For all your tax needs contact Cook and Company Accountants. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company use their experience and expertise to make tax time a breeze. We will assist in dealing with the CRA in the event of an audit. Contact us for a complimentary consultation.

December 1, 2021November 17, 2021

Tax Questions Frequently Asked by the Self-Employed

If you’re self-employed, tax time can be confusing. Do you pay the same tax rate as an employee? What expenses can you deduct? When do you file? Can you get employment insurance? The following are some answers to the tax questions most frequently asked by the self-employed.

Do I qualify as self-employed?

According to the Canada Revenue Agency, a self-employed individual usually works independently. The worker does not have anyone overseeing their activities and is free to work when and for whom they choose. They may provide their services to different payers at the same time and can accept or refuse work from the payer. They typically use their own tools, space and equipment. The working relationship between the payer and the worker does not present a degree of continuity, loyalty, security, subordination, or integration, all of which are generally associated with an employer-employee relationship. The worker is responsible for paying provincial and/or federal sales taxes and may claim certain deductions as business expenses.

Examples of self-employed positions:

Property and real estate managers
Farmers and ranchers
Brickmasons and blockmasons
Food Service Managers
Painters (construction and maintenance)
Carpenters
Lodging Managers
Tile and Marble Setters
Artists
Massage therapists
Financial advisers
Freelance writers
Independent business consultants
Local handypersons
Food truck owners
Photographers
Make-up artists
Event planners
Hairstylists
Tutors

Do I need to charge GST/HST?

According to the Canada Revenue Agency (CRA), if you sell taxable goods or services in Canada and you are registered for a GST/HST account, you must charge your customers GST/HST for your province or territory. You must remit all net tax owing when you file your taxes. Be sure to keep records of the amount of GST/HST you’ve collected and how much you’ve paid on business expenses.

When do I file?

Self-employed individuals must file, like everyone, by April 30th.

Can I deduct my kids and/or spouse?

If they work for you, you can pay your significant other and/or kids. The money paid to them is tax-deductible, as long as the salary you’ve paid them is reasonable for the work they’ve done.

Can I get employment insurance?

To be eligible for EI, (including maternity, parental, sickness and compassionate care leave) you have to register.

How much should I set aside for taxes?

Set aside between 15 and 25 percent of your gross earnings to avoid the shock of an unmanageable tax bill at the end of the year.

What deductions can I claim?

Self-employed workers can take advantage of more write-offs than employees bringing home a T4. They can claim:

Operating expenses (rental on space, office supplies, repairs, maintenance, inventory, payroll, utilities, professional fees)
Home office expenses: If you run your business from your home and use the space for the majority of your activities, then you can deduct a fraction of the cost of your home rent for the tax period.
Meals and entertainment costs associated with a self-employed business are eligible for tax write-offs as sanctioned by the CRA. These costs must be incurred in the company’s name (client dinners, employee lunches, etc.) and only 50% of the total cost of the meals and entertainment can be written off. You’ll need to show evidence that the food or entertainment costs were reasonably and appropriately used for your business. A guide to claiming meals and entertainment can be found on the CRA site.
Travel: The CRA allows tax write-offs for self-employed persons who travel outside their usual area of business for work-related reasons (meet a client, pick up inventory, attend a professional conference).
Vehicle expenses: Personal vehicle use is not eligible for any type of write-off, but a fraction of such costs can be written-off if you drive your car for work-related reasons. You’ll need to track your mileage. If a vehicle is only used for business purposes, then almost all costs associated with its running are eligible for deductions (gas, mileage, repairs, maintenance, insurance, oil changes).
Advertising/marketing: A part of your advertising and marketing costs can be deducted.
Websites and software: The CRA dictates that certain costs associated with your business website are tax-deductible (software/website development, cost of products, contractor fees for installation and/or technical help).
Bad debt refers to money owed to you by others that cannot be paid back. It’s uncollectible revenue and it is considered a business expense. In order for bad debt to be expensed and written-off, you must have done one of two things: establish that an account receivable is a bad debt expense within the specific tax year and/or include the bad debt in your receivable income. Then you are able to claim bad debt under business expenses using the T2125 form.
Private health service premiums: If you pay for a private health plan each year, then the premiums you pay on that plan are tax-deductible.
Industry/professional fees: The expenses associated with professional certification required to work in your industry are eligible for write-offs (licenses, certifications, dues and requirements).
Professional development and educational expenses: Further learning and professional development can be deducted from your personal returns.
Interest and bank charges attached to your business accounts can be written off. There are strict limits on the interest you can deduct depending on what the loan was for.

The Canada Revenue Agency states that business income is income from any activity you carry out for profit. If you’re self-employed, you likely earn income from a business that you operate either as a sole proprietor or with someone else as your partner. It could include income from a business, profession, commission sales, farming, or fishing activities. You’ll need to file your taxes in a very specific way in order to meet CRA requirements.

Need advice and/or assistance filing your self-employed tax return? Need help determining tax deductions for your home office? Contact Cook and Company Chartered Professional Accountants. We are based out of Calgary, Alberta, serving clients across Canada and the United States. We provide high-quality tax, assurance, financial and succession planning services for a wide variety of privately-owned and managed companies. Contact us for a complimentary consultation.

March 10, 2021March 24, 2021

Is the GST Quick Method Right for You?

Completing your company’s GST claim can be a hassle! You have to track the GST you’ve been charged and the GST you’ve paid and back up these claims with invoices and receipts. If you miss any input tax credits, you pay too much. Luckily, the GST quick method can save business owners both tax and time. You can use the quick method if taxable sales for your business do not exceed $400,000 for the fiscal year. Instead of claiming the GST paid on purchases as an input tax credit, you need only remit a portion of the tax you collect to the Canada Revenue Agency (CRA).

The GST Quick Method:

Is a simplified accounting option (eliminates the need to record and report the actual GST paid or payable on most purchases)
Reduces paperwork
Simplifies calculations
Requires submission of 2.6% of the first $30,000 of gross revenue and 3.6% of the gross revenue after that
Can save you $1,000 or more each year
Allows you to claim ITCs on purchases of real property, capital property (computers, equipment, vehicles), eligible capital property, and improvements to those properties

You can use the GST quick method if:

You’ve been in business continuously throughout the 365-day period ending immediately before your current reporting period
You’re a new registrant and you expect your taxable supplies to be $400,000 or less in your first full year of business
You didn’t revoke an election of the quick method or the simplified method for claiming ITCs during that 365-day period
You’re not a person listed under Exceptions
Your revenues are not more than $400,000 for either the period consisting of the first four consecutive fiscal quarters out of your last five fiscal quarters or the period consisting of the last four fiscal quarters out of your last five fiscal quarters.

Who can use the GST quick method?

Most goods and service-based small businesses are eligible to use the quick method.

IT consultants
delivery services
dry cleaners
auto repair shops
quick-service food outlets
house-cleaning services
campgrounds
caterers
delicatessens
painting contractors
photographers
taxi drivers
etc.

Who is ineligible for the GST quick method?

accountants or bookkeepers
financial consultants
listed financial institutions
lawyers (or law offices)
actuaries
notaries public
listed financial institutions
audit services
tax return preparers or tax consultants
municipalities, or local authorities designated as municipalities
public colleges, school authorities, or universities, established and operated not for profit
hospital authorities
charities and non-profit organizations with at least 40% government funding in the year

How do you elect to use the quick method?

You can elect to use the quick method by using online services:

My Business Account, if you are a business owner

Represent a Client, if you are an authorized representative or employee

You can also elect to use the quick method by completing Form GST74

Do you find calculating GST difficult and time-consuming? The GST Quick Method is faster and easier to use than the general procedure and, in most cases, saves you money. Check out your company’s eligibility for the Quick Method. Save time, money and hassle! Sign up for the GST Quick Method today.

Need help calculating your GST? Wondering if you qualify for the GST Quick Method? Contact Cook and Company Chartered Professional Accountants. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company uses their experience and expertise to help you. Contact us for a complimentary consultation.

Resources:

March 1, 2021March 15, 2021

How to Fix a Mistake on a Filed Tax Return

You’ve added a stamp and mailed the envelope or you hit the send button and e-filed your tax return. Feels good to have this task done! Then you receive another receipt, realize you used the wrong date for your medical deductions, get another information slip in the mail, notice you incorrectly calculated your deductions, realize you input the wrong social insurance number and/or gave an incorrect bank account or routing number. Don’t panic! There are procedures to follow so you can change your tax return after filing and fix the mistake you’ve made.

If you’re requesting a change to a T1 income tax return, the adjustment can be accomplished online or by mail. You can request a change to the current year or any of the previous nine years. A separate request is required for each year you wish to amend.

By mail: Send a completed T1 Adjustment Request form (T1-ADJ) to your tax center or send a signed letter asking for an adjustment to your return. You’ll need your social insurance number, the year of the return you are amending, your address and a phone number at which you can be reached.

Online: Use the change my return option found in My Account, a secure online service. You can access My Account in one of two ways, through a Sign-In Partner (selected financial institutions such as BMO and ING Direct) or by creating and using a CRA log-in. You’ll need your social insurance number, date of birth, current postal code and your copy of the tax return you are amending.

If you’re requesting a change to your T2 income tax return, you can do so by mail or online.

Online: Use commercial Canadian tax software or send your amended T2 tax return in barcode format to the CRA.
By mail: Send a letter to your tax center. Make sure you include the name of your corporation, your business number, the tax year and details including revised financial statements and revised schedules. Use Schedule 4 to carry back a loss, Schedule 21 to carry back foreign tax credits, Schedule 31 to carry back an investment tax credit and Schedule 42 to carry back a part I tax credit.

After making online changes to your tax return, keep all your receipts and supporting documents in case the CRA asks to see them. Provide supporting documents only if asked to do so and using the method of submission indicated in the CRA’s contact letter.

How long will it take for the change to be made?

The CRA will review your request for a change and advise you if the change is allowed by sending you a notice of reassessment or a letter explaining why the changes you requested are not possible. It will take approximately two weeks for a change requested online and eight weeks for a change requested by mail. Additional time may be needed if the CRA contacts you for more information or documentation. Requests which are submitted during the CRA’s peak return processing period, between March and July, will take longer.

If you realize, after submission, there’s an error on your tax return, don’t worry! There are procedures in place to help you make changes and adjustments. Tired of completing complex forms for tax? Contact a chartered professional accountant. They have the knowledge and expertise to make tax claims a breeze.

Need help preparing your tax return? Require assistance correcting a tax return? Contact Cook and Company Chartered Professional Accountants. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company uses their experience and expertise to help you. Contact us for a complimentary consultation.

Resources:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/change-your-return.html

https://ebtca.com/fixing-a-mistake-in-your-already-filed-tax-return/

https://www.thebalancesmb.com/mistake-on-canadian-income-tax-2948220

https://www.thebalancesmb.com/canada-revenue-agency-online-accounts-for-businesses-2948652

https://www.thebalancesmb.com/what-is-the-canada-revenue-agency-cra-business-number-2947322

https://www.thebalancesmb.com/canada-revenue-agency-online-accounts-for-businesses-2948652

https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2sch4.html

https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2sch21.html

https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2sch31.html

https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2sch42.html

January 15, 2021January 21, 2021

Managing Small Business Debt during COVID-19

Three-quarters of Canadian small businesses have taken on debt as a result of COVID-19. As of November 3rd, 69% of Alberta businesses are open, 39% are back to pre-COVID staffing levels but only 21% are experiencing normal revenues. The Canadian Federation of Independent Businesses estimates that, if and when revenues return to normal, it will take most Alberta small businesses 1 ½ years to recover. Business owners have two choices: try to save the business while attempting to settle outstanding accounts, or allow the business to fail with an exit strategy that minimizes the financial consequences.

Financial help available for those attempting to save their business:

- CEBA (Canada Emergency Business Account) supports businesses by providing financing for expenses that cannot be avoided or deferred thereby helping to position businesses for successful relaunch when the economy reopens. CEBA is available from more than 220 financial institutions across the country. Repaying the balance of the loan on or before December 31, 2022, will result in loan forgiveness of 25%. CEBA support is being expanded from $40K to $60K and is available to all eligible previous and new CEBA applicants.
- CEWS (Canada Emergency Wage Subsidy) covers part of employee wages, retroactive to March 15. This enables businesses to re-hire workers, help prevent further job losses, and ease back into normal operations.
- RRRF (Regional Relief and Recovery Fund) helps businesses and organizations in sectors that are key to regions and local economies. The fund is specifically targeted to those that may require additional help to recover from the COVID-19 pandemic, but have been unable to access other support measures.
- CERS (Canada Emergency Rent Subsidy) provides direct and easy-to-access rent and mortgage support to qualifying organizations. Charities, nonprofits and qualifying businesses receive a subsidy of up to 65% of eligible expenses until December 19, 2020. Combined with the other support received under the CERS, businesses can receive a rent subsidy of up to 90%.
- Loan Guarantee (for small and medium-size businesses): Export Development Canada (EDC) is working with financial institutions to guarantee 80% of new operating credit and cash flow term loans of up to $6.25 million to small and medium-sized enterprises. This financing support is to be used for operational expenses and is available to both exporting and non-exporting companies.
- Co-Lending program (for small and medium-sized enterprises): Business Development Canada (BDC) is working with financial institutions to co-lend term loans of up to $6.25 million to small and medium-sized businesses for their operational cash flow requirements.

Tips for businesses regarding recovery:

Take care of your people: Implement best practices for safety. Allow those who can to work remotely. Establish a contingency plan for quarantined workers. Schedule regular updates and optimize technology to keep the lines of communication open and clear.

Evaluate capacity and resources: Review your expense items to see where you can shave costs. Find recurring operating expenses that can be suspended for a short term. Align personnel to production/sales. Defer discretionary expenses. Document cash inflow and outflow. Create a rolling cash flow forecast and update it weekly.

Communicate with suppliers to confirm whether existing purchase orders will be filled on time. This will help you manage your customers’ expectations and update your cash flow plan. Try to negotiate deferred payment terms for payables.

Reach out to customers and confirm that existing and planned orders are still on track. If they owe you money, discuss the ability to pay and the timing of payments. Offer markdowns if they can pay you quickly. You may have to defer production or loosen repayment terms. Ask customers if they need anything else. With businesses closed and supply chains compromised, there may be a new opportunity for your company.

Talk to your banker: Present your banker with a solid restructuring plan. If possible, renegotiate your bank loan so it’s spread over a longer-term, reducing the interest payments and also the monthly repayment cost. Investigate the opportunity to lower interest rates. Consolidate business loans into one payment, which may reduce monthly costs.

Consider alternative lenders: Even in tight times, there are those who are looking to invest and alternative methods of financing. Consider peer-to-peer loans, a line of credit, invoice financing, an advance funding loan, non-bank lenders (ThinkingCapital, OnDeck), invoice factoring and a merchant cash advance.

Be open to change and move quickly: Look beyond the status quo. Adapt quickly to the changing situation. Look for new market demands. Explore adjacent markets. Consider new ways to use your expertise. Solve unique problems resulting from the situation thereby creating a new niche. Establish a regional supply chain for continuity.

Embrace digital possibilities: Digital technologies can provide new marketing, financing and networking opportunities. Create digital products and services. Use online platforms to gain efficiencies and create customer value. Enable remote working. Access regional, national, and global markets in a cost-effective way using e-commerce platforms.

Think outside the box: What can you do to increase revenues? Can you lease out a portion of your office to another business? Could you save on rent by working remotely? Get creative. Find ways to generate additional revenue from your existing assets.

Get outside help: Outside assistance can help you navigate the changes. Talk to your chartered accountant, your financial planner and/or your banker. They have experience and knowledge that may be helpful.

Do everything you can to keep your business running. With luck and perseverance, you can survive and possibly thrive through this pandemic. Learn from this experience so that you can bounce back stronger.

Need help navigating the current situation? Draw on the knowledge and experience of Cook and Company Chartered Professional Accountants. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company uses their experience and expertise to help your business. Contact us for a complimentary consultation.

References:

January 1, 2021January 8, 2021

Cybersecurity and Your Business

Cybersecurity is the technologies, processes, and practices designed to protect networks, devices, programs, and data from attack, damage, or unauthorized access. You may think that your business will not be a likely victim but the risk is not limited to businesses that sell products and handle credit card information and it’s not just large companies that are targeted. If your business collects, processes, and stores data on computers and other devices, you are at risk. Protecting your company and its information needs to be a top priority. There are a number of safety measures you can take to ensure that your systems, data and site are as secure as possible.

- Train your employees: Establish basic cybersecurity practices and policies for your company and train all employees regarding these. Inform employees regarding all security issues. Have a clear email and Internet use policy. Provide regular updates on new protocols and conduct regular training sessions to review IT security best practices. Create a culture of cybersecurity awareness.
- Secure your network, database and website: Install the latest anti-malware, antivirus, spam blockers, spyware detection and anti-ransomware software. Consider using a service like PayPal to process payments and protect customer information.
- Establish safe passwords and authentication practices: Data breaches often happen due to lost, stolen, weak or easy to guess passwords. Consider a Password Manager App, a software application designed to store and manage online credentials in an encrypted database. Multi-factor authentication that requires additional information to gain entry is another possibility. Change passwords every 3 months. Give employees access to only the specific data systems that they need for their jobs and require permission before installing any software. No one employee should have access to all data systems.
- Implement penetration testing: Penetration testing involves hacking into your own system to expose vulnerabilities in your host network and network devices. It identifies problematic access points in your system and provides suggestions for hardware and software improvements to upgrade your security.
- Provide firewall security: Install a firewall on all devices; a set of programs that prevent outsiders from accessing data on a private network. If employees work from home, ensure that their home systems are firewall protected. Firewalls give you the best chance of protecting your site before an attack is successful and they result in a faster and safer website. Many companies install internal firewalls to provide additional protection.
- Do private browsing with a VPN (virtual private network): Business owners/employees often use temporary workplaces and remote locations (coffee shop, airport, home office) increasing the risk of outsiders gaining access to business data. A VPN creates an encrypted connection between your computer and the remote private network making it necessary to have the key to decode information. Your data can’t be monitored, tracked, collected and stored.
- Create a mobile device action plan: Mobile devices (laptops, tablets, USB drives, smartphones) create a security risk for your company. Require employers to have password protection, encryption software, and a remote lock and wipe app.
- Encrypt your emails: Email messages and attachments are not a safe way to send confidential/sensitive information. Email encryption software ensures that only the sender and recipient can read the email/attachment thus preventing data breaches. The email contains a hyperlink to a website controlled by the sender.
- Subscribe to a Cloud service; an easy and affordable way to get data security from a company that specializes in handling security threats.
- Backup business data and information: Automatically backup critical data (word processing documents, electronic spreadsheets, databases, financial files, human resources files, accounts receivable/payable files) and store the copies offsite or in the cloud. Check your backup regularly to ensure that it is functioning correctly.
- Outsource your IT: A third-party IT provider hires and trains the best security people, gives you a set monthly fee, remotely manages your servers (24/7) and responds to emergencies.
- Dispose of data safely: When disposing of outdated computers, completely destroy the data on the hard drive by using a wiping/degaussing system and then physically destroying it with a hard-drive shredder or crusher.
- Secure your Wi-Fi network: Set up a wireless access point/router that is secure, encrypted and hidden. Password protect access to the router.
- Talk to your professional accountant to ensure that your information is protected on their end.

Increase your vigilance regarding online security in order to protect your intellectual property, financial data, personal information, or other types of data from unauthorized access or exposure. Undertake proactive measures to protect your business computer, network, data, and website. Be aware of recent attacks and adjust your protection as needed. Stay ahead of cyber attacks, cybercriminals and emerging trends in cybercrime. The Canadian Center for Cyber Security provides online training, checklists, and information specific to protect online businesses.

Concerned about the safety of your company’s information? Want an accountant versed in cybersecurity? Contact Cook and Company Chartered Professional Accountants. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company uses their experience and expertise to help your business. Contact us for a complimentary consultation.

References:

https://www.wordstream.com/blog/ws/2019/03/12/video-advertising-trends

https://www.wordstream.com/blog/ws/2019/10/31/pre-roll-ads

https://smartyads.com/blog/what-is-ott-advertising/

https://instapage.com/blog/pre-roll-ads

https://instapage.com/blog/digital-advertising-trends

https://financesonline.com/advertising-trends/

https://marutitech.com/benefits-chatbot/

https://blog.templatetoaster.com/google-alp/

https://www.business2community.com/digital-marketing/top-10-trends-in-digital-advertising-in-2020-02263555

https://www.singlegrain.com/digital-marketing/digital-marketing-trends-2020/

https://instapage.com/blog/what-is-outstream-video

https://www.curalate.com/blog/google-shoppable-ads/

https://www.3playmedia.com/2018/09/20/3-reasons-why-you-need-video-transcription/

https://www.tintup.com/blog/user-generated-content-definition/

https://www.google.com/search?client=firefox-b-d&q=what+is+a+remarketing+ad

https://www.investopedia.com/terms/o/over-top.asp

https://digitalguardian.com/blog/biggest-incidents-cybersecurity-past-10-years-infographic

December 10, 2020December 14, 2020

Preparing a Business Plan

In order to secure the money your business needs from a bank, you’ll have to prepare a business plan. It’s a factual description of your business and its projections. This document describes your plan for your company showing its structure, products, services, marketing strategy, budget and financial projections. It’s an informational document intended to showcase your company’s operations, goals and potential. Make sure it includes the following:

Executive summary: This section briefly summarizes the entire business plan. It describes the company, your product/service, the industry, your competitive advantage and the prevailing economic climate.
Description of the company: This segment of the document fully describes the history, current operations, strategy, mission statement, principals, strategic partners and corporate structure of your company.
Management team experience: This is your chance to showcase the skills, experience and qualifications of yourself (owner), any co-owners and each member of your management team. Include an organizational chart and salary forecasts. If you have a board of directors, list them along with relevant experience.
Key financial data: Report the fiscal strength of your company. Provide financial statements and forecasts for the next 2 to 3 years and include historical results for the past three to five years. This portion of the plan should include income statements, cash flow statements, capital expenditure budgets, balance sheets, profit and loss statements, sales forecasts and relevant financial metrics for your industry. Provide monthly, quarterly and yearly projections.
Market analysis: Provide a competitive analysis of your market identifying existing gaps that your business intends to fill. Include an industry overview, information on your target market, planned marketing strategies, your knowledge of relevant regulations and your past compliance with them.
Production plan: Describe your company’s product/service in detail. Itemize the product line with the current and planned pricing structure. Include the estimated life-cycle of the product/service and a description of any trademarks/patents/intellectual property rights you own.
Supporting documents: Append principal’s resumes, tax returns, real estate documents, processing flowchart, letters of intent from buyers of your product/service, marketing materials, training certificates, research supporting your forecasts, clients testimonials and media reports.

Tips:

Use simple language, avoiding technical terms and acronyms.
Your proposal should be clear, well-structured and easy to read.
Don’t hesitate to sell yourself!
Demonstrate that you have contingency plans.
Consider working with a professional to help you to lay out the document.

Preparing a clear, well-documented business plan is crucial for getting the money your business needs. Create a detailed, precise, informational document that presents your business in the best possible light. Demonstrate your willingness to make a success of your business. If you need help creating your plan, talk to your chartered accountant. They will have the knowledge, experience and skills to help you create a professional business plan.

Need help preparing a business plan? Contact Cook and Company Chartered Professional Accountants. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company uses their experience and expertise to help your business. Contact us for a complimentary consultation.

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