4 Simple Steps to Understanding Small Business GST
Are you Confused About GST? We are pleased to offer these Simple Steps to Tackle Your Taxes. The most popular questions that we get asked are about taxes, and specifically, about GST.
We have created a simple 4 Step Process for new business owners and entrepreneurs to follow. Follow these steps outlined for you to get started.
1. Register for a GST number
The first piece of the elusive GST puzzle is to register for a GST number. This is the easiest step in the process and the results will be two-fold. You will have a Business Number (if you didn’t already), plus your GST number. We highly recommend that you perform all CRA registrations at once.
When you are ready to register, gather the following first:
- Start date to begin with GST
- Your Fiscal Year End
- Total Revenue (NOT net profit, just Revenue)
- Your personal information
You will receive a confirmation after your register and can start collecting and charging GST.
2. Setup your Books
Now in Step 2 after you have registered, you can setup your books appropriately.
We suggest utilizing cloud based accounting software such as Quickbooks (especially as we are self-professed technology obsessed Quickbooks Pro-Advisors!). There are many other options to you for cloud accounting, so choose a platform that you are comfortable with, and one that fits your budget.
Once you have chosen your method to record your monthly sales & expenses transactions, you would setup your books with your new GST number and with the reporting frequency assigned to you by CRA (monthly, quarterly, annually).
Most importantly, ensure your invoices are updated with your GST number, and with the GST amount charged appropriately, if applicable to your business and client.
3. Record your Transactions
Now in Step 3, record your transactions (sales and expenses) with #GST.
When creating a sales invoice to customers, ensure your tax feature is turned on and the field is available for you to select. You know your business best, so choose GST for all applicable product or service sales.
When entering an expense, ensure that you have applied GST (for those of us in British Columbia at the correct rate – 5%) so that you can include the Input Tax Credit in your returns. This step is simple – rinse and repeat – but the most crucial and often the most overlooked. Hundreds of dollars are missed each reporting period in ITC’s that you could collect, merely because transactions are not recorded properly.
4. File your GST
The Last Step and Time Sensitive – Is Filing your GST.
In your Cloud Accounting software, there is a section/module for Taxes. This should have been setup already in previous steps.
When you run a report for the correct filing period, double check your revenue and most importantly, your Input Tax Credits (ITC’s). Once the numbers are solid, run your reports and file through your MyCRA Business Account or GST Netfile.
Don’t miss the deadline! Tick tock!
Big Rose offers Complimentary Cash Flow Forecasts to growing businesses and discounts for Quickbooks Online. Contact Us today by visiting our Home Page www.bigrose.ca for further details and to get started