With tax time right around the corner, it is essential that you have all of your company’s financial statements in order. Why do you need to keep up on your financial statements? Most importantly, it is the law. In addition, these records can help you to understand where your income streams are coming from. Plus, knowing your company inside and out can lead to better business decisions in the future and even help to identify fraud that may be occurring within your organization.
This file maintenance should not be a last-minute ordeal. It is important to get your financial statements in order ahead of time so you don’t feel stressed or face potential fines when tax time comes along.
What Is Required?
Several documents and records may be required by the Canada Revenue Agency. For instance, if you are managing a charitable organization, you will want to keep track of all of your bank accounts, any donations made, and tax receipts that you have in your possession.
Other records include anything documented on paper or electronically, which can also include any journals, ledgers, charts and books that contain valuable financial information. It is recommended that you hold on to these records for six years.
There are Consequences to Not Keeping Up on Your Financial Statements
The best benefit of having all of your financial statements organized before tax time is that you won’t be rushed when filing and possibly make mistakes. It is crucial that you have accurate financial information because the consequences of not doing so can be dire. You can face significant penalties if you don’t keep accurate records and have those records readily available at the CRAs request.
Consider Keeping Electronic Records
It can be a hassle keeping track of financial records in paper form, so consider keeping electronic records. Electronic documents can be recorded and saved via accounting software, point of sale systems, or with income tax preparation software. Electronic records can sometimes be as easy to lose as paper records if you don’t maintain proper data security, so it is essential that you backup your data regularly to ensure that you can deliver these files if needed.
If you require more advice on financial statement maintenance, or you are looking for a company who can handle the ins and outs of your tax preparation and accounting for you, look no further than Janet E. Helm & Co. Inc. We can assist with your GST, PST, T4 and T5 returns, as well as charity and not-for-profit returns, and our record-keeping systems are top notch. Leave nothing to chance – check out our range of accounting services today and call us at 604-502-7705 to schedule an initial consultation.