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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
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Business Scenario
- Business (account) Number
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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?
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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
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| Accounting Tip |
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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.
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| Did You Know ? |
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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.
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For more Did You Knows? |
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| Definition |
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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)
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For more definitions ... |
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| Sandy's Recommendations |
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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
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Next Issue - Accounts Receivable - Part 1
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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
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