No business likes an audit. Not only is it a highly-stressful experience, even if you know you have not committed any sort of fraud, but the whole process will take time away from the running of your business. Of course, some audits can’t be avoided. Part of the process in Canada is fairly random. However, some companies are selected for audit. These are the companies which give some sort of indication that somebody may be wrong with their accounting practises. These are, of course, the audits that you can avoid. On this page, our accounting firm is going to share a few measures you can take to ensure that you avoid an audit as much as possible.
• Monthly bookkeeping is vital. This will, of course, be beneficial to you when it comes to the running of your business. It will allow you to view your revenue and expenditure at a glance. It will also ensure that you have all of the information that you need to hand in the rare event that you are contacted by the revenue service.
• It is absolutely vital that you file your tax returns on time. Companies which do not file their tax returns on time will be in-line for an audit fairly sharpish. If you are having difficulty with your taxes, do not hesitate to talk to a tax consultant. Their job will be to point you in the right direction and ensure that the returns that you file are correct and on time. The accountancy firm in Canada that you deal with should also be able to help with your tax return.
• In addition to filing your tax return on time, you will also need to ensure that your GST and QST is filed on time and correctly. Small mistakes in these forms can trigger an audit. Your account should, again, be able to help you out here.
• If you receive a letter or any other form of communication from the revenue service, you absolutely must respond within 24 to 48 hours. They have communicated with you for a reason. They, perhaps, have a burning question to ask about your company. If you do not answer their communications, this is a big red flag. This will, more likely than not, trigger an audit.
If you need any help in avoiding an audit by following correct practises, please do not hesitate to get in touch with our accounts in Canada, today. Our team will be more than happy to answer any questions you may have and explain how our services may be beneficial to you.