Tax season can be stressful and overwhelming for many business owners, especially if you have to deal with complex tax rules, multiple filing deadlines, and potential penalties. However, there are ways to make tax preparation and compliance easier and more manageable for your business. One of the most effective ways is to monitor your financial statements consistently throughout the year. This is where partnering with experienced Edmonton accountants becomes crucial.
At ATS Accounting and Tax Edmonton, we understand the unique challenges faced by local businesses. Our team of dedicated professionals provides comprehensive tax preparation and compliance services, allowing you to focus on what truly matters – running your business.
In this blog post, we will discuss the critical role of consistent financial statement monitoring in ensuring accurate tax preparation and maintaining compliance with various tax and financial regulations.
What are Financial Statements and Why are They Important?
Financial statements are formal records of your business’s financial activities and position. They include:
- Income statement: This shows your business’s revenues, expenses, and profits or losses for a specific period, usually a month, quarter, or year.
- Balance sheet: This shows your business’s assets, liabilities, and equity at a specific point in time, usually the end of a period.
- Cash flow statement: This shows your business’s cash inflows and outflows from operating, investing, and financing activities for a specific period.
Financial statements are important for several reasons. They help you:
- Track your business’s performance and profitability
- Evaluate your business’s financial health and liquidity
- Identify your business’s strengths and weaknesses
- Plan your business’s budget and cash flow
- Communicate your business’s financial information to stakeholders, such as investors, lenders, customers, and suppliers
How to Monitor Your Financial Statements Consistently
Monitoring your financial statements consistently means reviewing and updating them on a regular basis, preferably monthly or quarterly. This will help you keep track of your business’s financial situation and make adjustments as needed.
To monitor your financial statements consistently, you need to:
- Use a reliable accounting system: A good accounting system will help you record your transactions accurately and automatically generate your financial statements. You can use a cloud-based accounting software, such as QuickBooks Online that allows you to access your financial data anytime, anywhere, and from any device. You can also integrate your accounting software with other apps, such as Synder, that can sync your online sales and payments with your accounting system.
- Reconcile your accounts regularly: Reconciling your accounts means comparing your accounting records with your bank statements and other sources of information, such as invoices and receipts, and resolving any discrepancies. This will help you ensure that your financial statements are accurate and complete. You should reconcile your accounts at least once a month, or more frequently if you have a high volume of transactions.
- Review your financial statements carefully: Reviewing your financial statements means analyzing and interpreting the numbers and ratios, and identifying any trends, patterns, or anomalies. This will help you understand your business’s financial performance and position, and identify any issues or opportunities. You should review your financial statements at least once a quarter, or more often if you have a dynamic or seasonal business.
How Monitoring Your Financial Statements Can Simplify Your Tax Preparation and Compliance
Monitoring your financial statements consistently can help you simplify your tax preparation and compliance in several ways. Here are some of the benefits:
- You can prepare and file your taxes accurately and efficiently: By monitoring your financial statements consistently, you will have all the information you need to prepare and file your taxes, such as your income, expenses, assets, liabilities, and equity. You will also be able to avoid errors, such as missing or duplicated transactions, that could result in inaccurate tax calculations or reporting. This will save you time and money, and reduce the risk of audits or penalties.
- You can comply with various tax and financial regulations: By monitoring your financial statements consistently, you will be able to comply with various tax and financial regulations that apply to your business, such as:
- Income tax: You will be able to calculate and report your taxable income and deductions, and pay your income tax on time. You will also be able to claim any tax credits or incentives that you are eligible for, such as the Canada Emergency Wage Subsidy (CEWS) or the Small Business Deduction.
- Sales tax: You will be able to collect and remit the appropriate sales tax, such as the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST), on your sales of goods and services. You will also be able to claim any input tax credits or rebates that you are entitled to, such as the GST/HST New Housing Rebate or the GST/HST Quick Method.
- Payroll tax: You will be able to withhold and remit the correct amounts of Canada Pension Plan (CPP), Employment Insurance (EI), and income tax from your employees’ wages. You will also be able to report and pay your employer’s share of CPP and EI, and any other payroll-related taxes or contributions, such as the Employer Health Tax (EHT) or the Workers’ Compensation Board (WCB).
- Financial reporting: You will be able to prepare and present your financial statements in accordance with the applicable accounting standards, such as the Accounting Standards for Private Enterprises (ASPE) or the International Financial Reporting Standards (IFRS). You will also be able to comply with any financial reporting requirements or obligations that may apply to your business, such as the Canada Revenue Agency (CRA], the Alberta Securities Commission (ASC), or the Canadian Business Corporations Act (CBCA).
How ATS Accounting and Tax Edmonton Can Help You
At ATS Accounting and Tax Edmonton, we are a team of experienced Edmonton accountants and tax advisors who specialize in working with established small and mid-size businesses. We can help you monitor your financial statements consistently and simplify your tax preparation and compliance.
We offer a range of accounting and tax services, such as:
- Business and personal tax returns
- Tax consulting and planning
- Estate planning
- Bookkeeping
- Sales tax
- Payroll
Our team of experienced Edmonton accountants will:
- Review your financial statements regularly: We will identify any discrepancies, missing information, or potential errors.
- Reconcile accounts: We will ensure all bank statements, accounts payable, and accounts receivable are reconciled for accuracy.
- Categorize transactions: We will properly categorize all income and expenses, ensuring accurate reporting for tax purposes.
- Provide ongoing guidance: We will offer expert advice and recommendations to improve your financial record-keeping practices.
In addition to financial statement monitoring, we offer a full range of tax preparation and compliance services, including:
- Corporate tax preparation and filing
- Personal tax preparation and filing
- GST/HST filing and compliance
- Payroll services and tax administration
- Tax planning and optimization strategies
By partnering with ATS Accounting and Tax Edmonton, you gain access to a team of dedicated professionals who can help you navigate the complexities of tax preparation and compliance with confidence.
Contact ATS Accounting & Tax Edmonton
If you are looking for a reliable and trusted accounting and tax firm in Edmonton, Alberta, Canada, look no further than ATS Accounting and Tax Edmonton. We have the expertise, experience, and technology to help you simplify your tax preparation and compliance, and improve your financial performance and decision-making.
Contact us today to schedule your free 15-minute consultation and get started on your tax preparation and compliance. We look forward to hearing from you and working with you.
