Our Blog

A plan for success - Not just for financing

Your business plan is as much a road map of where you are going as it is to providing the information a lender will require before advancing funds to meet your needs. It serves both internal and external guidance. Internally, it will assist you in managing cash flow, capital expenditures and periodic issues. It is your crystal ball to guide your firm's future. Externally it may include those who could be a part of your financial requirements, investors, a bank or your suppliers.

Mary and Joe Brown own a computer business with 2 employees. Mary completes the bookkeeping and assists, Joe, as a computer tech. They opt to remit HST quarterly. Mary has minimal bookkeeping experience and completes the books once a quarter. Joe and Mary purchase computer inventory whenever necessary and make large shareholder withdrawals. At the end of the quarter, Mary realizes that they do not have the funds necessary to pay the Receiver General so she neglects to file the HST. The Receiver General sends the business notice and Mary netfiles the first and second quarter. Mary realizes that due to the large inventory and shareholder withdrawals, the business does not have the funds to pay the trust monies (HST), interest and penalties.

In the above scenario, Mary and Joe are spending Trust Funds and placing their business in jeopardy.

Solution

Mary and Joe can open up a sub-account with their bank. On a monthly basis, schedule to have transferred a sum of money (an average of your quarter) so that there is a reserve to pay their trust funds.

The above scenario is very common and it must be stressed that trust funds should not be used for business expenses. If a business has to use trust funds to pay the expenses, the owners or shareholders need to evaluate their financials and make necessary spending adjustments in order to have a thriving, healthy business. 

The fight against fraud starts with you. Learn to recognize, reject and report it.

Scammers are sneaky and sly. They can target anyone, from youngsters to retirees. Fraud covers a broad range of activities targeting private individuals, businesses or governmental organizations. No one is immune to it, and it can lead to relatively high costs, initially and potentially down the road.

In general, it is thought that crime rates are decreasing in the Western world, but by contrast, fraud appears to be increasing at alarming rates in recent years. This sharp rise in fraud can be attributed to the fact that much of life today, both business and personal, depends on internet connectivity with the institutions we deal with every day. As a result, a large part of today's fraudulent activity is cyber-related.

With free resources from The Competition Bureau of Canada, you will be better prepared to diagnose, rebuff and report fraud. Further, various prevention partners listed on the Bureau's website work together to combat fraud. You can access their resources here.

Signs of fraud and scams from the Financial Consumer Agency of Canada.

• The offer is too good to be true.     
  • "High returns with little or no risk—guaranteed!"
• You are urged to invest without being given much information about the investment.     
  • "It's complicated. You don't need to know the details."
• You are pressured to make a decision fast or on the spot.     
  • "You must act now. Tomorrow will be too late."
• You are given "insider information" that others don't know about.  
  • "Very few people know about this. That's why it's such a hot tip."
• You are asked to keep matters secret.     
  • "Don't tell anyone, or this fantastic loophole will close."
• You are asked to give financial information (personal identification numbers (PINs), credit card numbers, passwords, banking account information, etc.) or personal information (Social Insurance Number, date of birth, address, mother's maiden name, etc.) over the phone, by email or on a website you do not know.    
  • "We just need to confirm your information."
• You are made to feel guilty if you refuse to go along with the transaction.     
  • "Don't be so cautious. Don't you trust me? You'll regret passing this up."

Make sure you take the time to reflect on the situation when dealing with anyone you do not know. If you are not sure, ask a friend or colleague or even the police. A few moments of prevention on your part could save a valuable amount of your money, your reputation and your time.

This penalty consists of a 10% Federal, and 10% Provincial amounts. Whereas some penalties are applied against the uncalculated tax, this penalty is applied to the unreported income. If you voluntarily tell CRA about an amount you forgot to report, they may waive this penalty. For Example, John filed his 2008 tax return early and hadn't received al...