Sales are up and the money is flowing into your bank account.
Think all that money is yours? Think again! If you're tracking
any taxes such as GST or PST, a portion of those funds belong to
the CRA (Canada Revenue Agency).
On the one hand it's easy to remember GST and/or PST when we
include it on our invoices and when making purchases. But it's
another thing to remember when we're making deposits or looking
at our bank balance and thinking that it's all ours. A second
bank account to hold those funds can be a great help and it's as
easy as making a transfer on your bank's website.
Payroll and WSIB taxes can be another source of frustration. You
should have an idea how much your payroll will be each month.
It's easy to calculate the taxes. CRA provides free of charge
payroll tax table books or a stand-alone tax table program to
calculate the taxes for each employee. Don't forget to include
your company's portions of CPP and EI. Reserve a portion of
these taxes each time you make that bank deposit.
Do you have the information at hand when it's time to send in
the remittance report? Keeping your bookkeeping up-to-date means
you have the numbers ready when you need them.
We procrastinate when it comes time to send in the remittance
reports, but CRA will hit you hard with penalties and interest
if you miss that due date. It is easy to get into arrears and
can be very difficult to get out of that ever-deepening hole.
Think bankruptcy will fix your problems? Think again! Tax
arrears are not swept away with bankruptcy. Tax arrears will
still be owed long after your other problems are gone.
What is the solution?
* Having a second bank account to hold those funds until it's
time to remit to the government
* Transferring funds to the second bank account each time you
make a bank deposit
* Having your bookkeeping up-to-date so you have the numbers
ready when you need them
About the author:
JK Business Services has been providing bookkeeping services for
clients in the Hamilton-Wentworth and Halton regions since 1995.
For the do-it-yourselfer, we have training programs using
Quickbooks, MYOB or Simply Accounting. For those who don't have
time to, don't want to, or can't, we also provide complete data
entry.
Bookkeepers are NOT boring people! We just get excited about
boring things.
http://www.hwcn.org/~aa031/
