5 Tax Tips to Have Financial Control in 2022

A lack of financial controls for any business can lead to unreliable business intelligence, poor financial information, and fraud.

Here are five tips to have strong financial control:

1. Keep receipts for expenses for proof of purchase:
   • CRA regularly conducts and reviews and audits on business expenses and will ask for proof of purchase. Thus, it is important to keep your receipts filed for up to 6 years. The CRA can ask to go back 3 years from the date of the notice of assessment.
     
2. Maintain a separate credit card for business purchases only.
   • Having a separate credit card for business purchase is a great business practice as it makes it easier to keep track of your expenses for when you are finally ready to file your taxes. Did you know that there are tax implications on using the funds of your corporation for personal use?
     
3. Keep a daily sales log and deposit book to track sales deposits.
   • Keeping a daily sales log allows you to apply deposits to the correct invoices and keep track of your receivables. This is an important part of maintaining your cash flow to run a successful business.
     
4. Regularly backup your electronic financial data so you do not permanently lose it.
   • With data being a major asset for most businesses, every business should have a basic disaster recovery plan. Backing up your electronic financial data is critical in case of data loss.
     
5. Ensure you are aware of major tax filing deadlines and file on time.
   • Filing your taxes on time avoids interests and penalties on top of the taxes you already will owe.
   • Corporate tax deadlines: You must file 6 months after your fiscal year end however, the taxes are due three months after your fiscal year end.
   • Sole Proprietor: June 15 is the filing deadline, but taxes are due on April 30.