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e-ccounting
May 2009

in this issue

Business Scenario
- Business (account) Number

Answer

Accounting Tip

Did You Know ?

Definition

Sandy's Recommendations

Next Issue - Accounts Receivable - Part 1


 

about e-ccounting

e-ccounting is a monthly newsletter focusing on accounting tips and solutions. Our mission is to educate our clients, students and readers by offering these resources in response to your ongoing questions.

It is our objective to gather information and provide easy access for your current and future needs.
Back-issues are available on the accountrain website.

These tips are not complete answers to complex questions. We therefore recommend, when in doubt, contact the professionals or government agency.

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Sandy's Question Corner

Do you have an accounting question? Send it to us at accountrain



Workshops:

accountrain is now offering a series of three workshops. Take one, two or all three and save as you learn. The informative and interactive format guarantees a comfortable and fun learning environment.

Details on the accountrain.com website.

The Topics:

1. Understanding How to Read Financial Statements
  • Who's interested in your reports and why
  • Why there's more to the Income Statement than just the "bottom line"
  • What's so important about the Balance Sheet, and
  • Key accounts, definitions, ratios and samples to review.

    Next Session: Fall 2009 or as requested.


2. Accounting 101 - for new and small business
  • Review of common questions, including GST, incorporating and many more
  • Choices for maintaining bookkeeping
  • Understanding government requirements
  • Shortcuts, tips and organizing all that paper!

    Next Session: Fall 2009 or as requested.


3. Year-end Prep & New Year Planning
  • It's never too late to get organized
  • Understand what's different including: depreciation, accruals, deferred revenue and prepaids
  • How to choose accounting help
  • Preparing for an audit, and how about avoiding an audit!
  • Learn to streamline your bookkeeping methods to save time and money.

    Next Session: Fall 2009, or as requested.


For more information or to register, email accountrain

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  • Business Scenario
    - Business (account) Number

  • My accountant asked me for my business number and I have so many account numbers I wasn't sure which one he needed, can you simplify this for me?

  • Answer

  • Both the Federal and Provincial government will have many departments to deal with which may or may not require different account numbers. The federal government provides you with a "business number" when you register your business with them. It is a nine digit number that will end with RC0001.

    This business number will be the same for all your Federal government dealings, however the two letters at the end are what identifies which department. For example the RC is for the tax instalments.
    The 0001 represents how many of this type of file you will have for this department, I will clarify this below.

    The same nine digit business number will be used for GST, with RT0001 at the end.

    For payroll, source deductions, you will also use the same number with RP0001 at the end. If you have more than one payroll account for this company, it will be the same account number but the second file will be RP0002.

    The Provincial government has not adopted this system and therefore each department will require a different account number. They are:

    • EHT (employer health tax, formerly OHIP)
    • PST (provincial sales tax, also known as RST (retail sales tax)
    • Provincial tax instalments
  • Accounting Tip
  • For all your business accounts, be proactive!

    If you are behind in paperwork call CRA and ask for an extension, they will note this on your file. You will be penalized, but it's better than getting reminders in the mail.

    An example of this would be if your GST is due. If it's not complete, call CRA and tell them when you expect to have it done. They may suggest you make an instalment in the meantime, and submit the paperwork when it's done. They will usually work with you on a (reasonable) target date.

    Or if you are behind in a payment call CRA and review your options. If possible, pay a portion of what is due, to show "good faith". Again you will be charged interest but at least they know you're trying.

    An example of this would be if you've done the paperwork, but can't pay it in full, still send in the report, with what you can pay. This way they know you are trying.

    The problem is not going to go away, so don't ignore it. You will be surprised that they are often willing to work with you.

  • Did You Know ?

  • Staff, consultants and external auditors can discuss your account(s) on your behave, just ensure they have proper consent.

    For the federal government, there is an actual form that has to be filled out, one for each person (Business Consent Form RC59). It will request information of what accounts this person can ask about and for what time period.

    For example, as an accounting consultant, I often need to call the CRA on behave of clients. I have filled in the consent form so that I have access to all accounts for all time periods. (the owner must sign).

    If this is not in place, every time you call, the owner will have to be present to (a) answer questions to confirm the company's ID, and (b) give verbal permission for you to ask questions, but it is only good for this one phone call.

    The government rep should suggest, if this will be an ongoing need, that the owner fill out the consent form.

    Please note every time you call be ready to identify yourself and confirm several company criteria which may include:

    • mailing address
    • phone number
    • business number
    • year-end, etc.

    For more Did You Knows?
  • Definition
  • Consolidated taxes

    As of January 1, 2009, the Federal government, Canada Revenue Agency (CRA) will be responsible for collecting both Federal and Provincial taxes.

    If you owe taxes for 2008 or are making instalments for the 2009 year, both Federal and Provincial taxes are now paid directly to the CRA. (it is the CRA's responsibility to pay the Province on your behalf)


    For more definitions ...
  • Sandy's Recommendations
  • For filing purposes, I recommend you do not file your government files with your vendor files.

    Instead, for quick access, file all your government files at the end of your vendor files. As well, have a file for each business number, in otherwords, a file for:

    • Federal Government GST
    • Payroll / Source deductions
    • Taxes
    Provincial Government
    • PST
    • EHT
    • Taxes

  • Next Issue - Accounts Receivable - Part 1

  • Learn:

    • The two components to the Accounts Receivable (AR) and why we should NOT take short-cuts.
    • Using accounting software to properly record and track customer activity.
    • Getting started, what information you should have on file for each customer, ie. account limits.
    • Part 1 - invoicing / billing customers: necessary data.
    • Available Reports
    613-789-2623



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