You’ve received a notice from the Canada Revenue Agency (CRA) letting you know that your Oakville business will be the subject of an audit. What is the first thing you should do? Don’t panic. Even if you haven’t engaged a tax preparation service to get your documents in order, there is still time to seek help. You should contact a bookkeeping service or a tax accountant in Oakville. Financial experts can help you prepare what the auditor is looking for and make sure that you meet the required deadlines.
If you have never completed any type of audit before (an external audit by a tax preparation service is a great way to confirm that you are CRA compliant), it certainly can seem overwhelming. Ensuring that you follow the instructions from the CRA is important. Preparing for an audit can also be time consuming, so the benefits of hiring a local tax accountant in Oakville extend beyond just accessing their expertise. Leave the prep work and the financial knowledge to the experts. A tax accountant can even speak to the auditor on your behalf and help them understand your business and your financial transactions.
The notice from the CRA will include details about the audit which could include:
What to submit - could be all of your receipts or could be limited to a certain area such as capital purchases.
Where the audit will take place - on your premises, the offices of the CRA or you may simply have to mail in the information they are looking for.
No matter what type of information they are seeking, the best thing to do is to cooperate and have a good attitude about the process. The auditor’s job is to check records for inconsistencies and then they may ask you to provide additional documents such as bank records, purchases from suppliers or bills of sale issued to customers. Be warned that having incomplete records means the audit will take longer and could become more extensive. Take the time to properly prepare what you submit. The importance of having good records really stands out in times like this and drives home the value of having a good bookkeeper that provides tax preparation services!
Once your bookkeeper or tax accountant has helped you meet all the requirements of the audit, you will be advised of the findings and the next steps. For more information about dealing with a CRA audit, click here to watch an informative video on what to expect. Most businesses that are required to make an additional payment after an audit is the result of an honest omission or a misunderstanding of a tax regulation.
We know that no one wants to be audited, but you can make the process less stressful by being prepared. Make sure your financial records and tax documents are up to date and accurately compiled. If you feel overwhelmed by these type of tasks, it might be time to find out more about hiring a bookkeeper and what it can do for your business.