Audit Ready Bookkeeping requires a blend of tax law, accounting principles, understanding of CRA audit requirements, and an understanding of how best to categorize and defend an expense.
AUDIT READY BOOKKEEPING DEFINED: There is a lot of knowledge and skill involved with keeping Audit Ready Books. Audit Ready Bookkeeping requires a blend of tax law, accounting principles, understanding of CRA audit requirements, and an understanding of how best to categorize an expense.
WHY IS IT NECESSARY TO HAVE AUDIT READY BOOKKEEPING? Conventional accounting systems follow generally accepted accounting principles (GAAP). The trouble with that concept is that it is not audit ready. Businesses are put into a tail spin at audit time. Think about just how crazy that is. CRA has a cut and dried audit procedure, so why should accounting not be done in an acceptable manner that is ready for an audit? We have recognized this limitation of accounting software and that the training of accountants is not in how to have the books ready for an audit.
The blinding flash of the obvious in respect to Audit Ready Bookkeeping is: AUDIT READY BOOKKEEPING IS THE ONLY SENSIBLE WAY TO DO BOOKS. When the books are done in a manner that reflects exactly what shows up on a tax return, done in a way that the auditor can understand the business AND THE OWNER CAN UNDERSTAND TOO, everything is transparent. And when all the records are kept in a proper audit trail, there is no longer a reason to fear an audit, unless you are a tax evader…
The more the business owner does to keep good records, the easier it is to complete the bookkeeping, getting ready for information feedback to the business owner and to be ready for tax time and or audit time.
WHY CONSIDER TAX AUDIT SOLUTIONS TO DO YOUR BOOKKEEPING?:
Our audit-ready bookkeeping service begins with a consultation with the business owners, after which we assign our highly-trained and experienced bookkeepers to completely re-do your books using our proprietary software.
All business documents will be organized into binders, numbered and cross-referenced with each software entry. Our skilled staff, makes sure that the expenses are put into the best tax strategic category. The end result is a crystal-clear and complete picture of every financial transaction involving your business. Almost any CRA auditor will find it self-explanatory and rock-solid. The transformation of your business records into our system becomes the critical tool in defense of an audit.
Audit Ready Bookkeeping provides a reliable financial feedback to the business owner on their day to day financial health. From that accurate information, business owners have the information they need to make the appropriate financial decisions.
We approach bookkeeping with a mind set that this is our client’s life, and we need to help make the best of it. We do this with a passion, leaving no deduction stone unturned.
We recommend that the bookkeeping be done on a minimum standard of once a month. Waiting a year for critical financial information simply does not make economic or practical sense.
Once each month’s bookkeeping is completed, you will receive a copy of the data file we have produced, along with a license for our software which you may use, indefinitely. Our fees vary, depending on the state of your business documents and how detailed your bookkeeping methods have been. When we have a better understanding of your bookkeeping we can quote you a price or at least a price range.
Here is a more detailed explanation of what we will actually be doing. The key in the process of audit-ready bookkeeping is understanding how to categorize expenses, and what is direct expenses and what is capital in nature (has lasting benefit) and to be able to organize the “source documents” which are comprised of items such as: deposit slips, invoices, records of business dealings, and receipts. We gather the source documents for all transactions, operations, and other events of your business and organize them in a way that provides a record the evidence of business dealings and justification for business expenses. This is where audit-ready bookkeeping begins and is the starting point in the audit-ready bookkeeping process.
Business events always have a financial impact on a business, in one way or another. An audit-ready bookkeeper understands this and has to determine what information is relevant and how to document the financial effects of each business transaction. A business is better off, worse off, or at least “different off,” as the result of its transactions. The bookkeeping process identifies the financial and business aspect of the relevant information about each transaction.
Each financial transaction requires an item or tracking number. This is critical to an audit trail. An audit trail is a traceable sequence of events leading up to a bookkeeping entry in your business’s accounts. Identifying the source document(s) for every transaction, the highly trained bookkeeper makes the first, or original, entry into a document journal and then enters the data into the business’s General Ledger then links that back to the source document.
It is very important to understand the business statements that must be made to support expenses. Some expenses are pretty obvious, however in normal accounting, there is a large amount of improperly allocated expenses. These inappropriate placements cost business owners huge amounts of lost tax advantages.
Auditors have the right to make assumptions about expenses, which they do with great enthusiasm. Proper business statements stops the “Assumptions Game.”
These procedures are the critical steps for getting the accounting records up-to-date and ready for the preparation of management accounting reports, tax returns, financial statements and government audits.
Bad bookkeeping is the biggest source of found money for CRA and comes out of the pockets of the working business owners.
If you would like to have your tax payable match what you instinctively know it should be, then you need to get on board with us and start reaping the huge tax savings.