I haz a new tax blog post under my Accounting Bean .. are corporations evil tax evaders? http://accountingbean.wordpress.com/2013/02/19/tax-evasion-or-tax-avoidance-are-corporations-evil-tax-cheats/
About once a month I tend to go into hermit-mode where I don’t really stay in contact with friends or family. This period is what most accountants call “monthend” that glorious time when accountants run around like headless chickens trying to finalise the numbers for the fiscal month that just closed. In some companies this can be a leisurely 2 week period, others 5 days and other’s just 2 days. I get a day and a half to try and hammer down my numbers for my “Flash Meeting” when I report my numbers to my Director and CFO and ultimately the Regional HQ. The remainder of the days until the results are “published” are to do all the journal entries required to come up to what I had reported in Flash. This is also the time in which I need to get positive confirmation for my intercompany balances – as the units I take care of have several IC relationships, across the globe, it’s a bit of a challenge trying to get this confirmation. I have to deal with offices in Sydney, Tokyo, Mumbai, Duesseldorf, Paris, London and occassionally Athens. Sometimes there is a language barrier problem. Most times the problems I run up against are due to time – Tokyo, Sydney, Mumbai are easily 12hrs ahead of me, so when I send out an email I have to wait until the next morning to see a response. This doesn’t give me much time to adjust numbers, if necessary. As the Flash is on the P&L and IC is on the Balance Sheet I can still do adjusting entries into the system.
As well I reconcile two massive bank accounts. One of them, my USD, is relatively easy to reconcile as the only transactions that flow through there are done by myself, my AP Clerk and our Cash Receipts Clerk. So it’s very easy to trace a transaction to the initiator and figure out how to fix a discrepancy. My CAD account, which is the huge behemouth, has multiple fingers into it. There’s myself, my AP Clerk, the Cash Receipts Clerk, the HR Manager, Corporate Finance in NY, AR Supervisor in NY, Finance Systems Analysts and whatnot. It takes me about an hour to reconcile the USD account. It takes me close to 8 hours to reconcile the CAD account.
Plus I have to calculate the monthly tax provision for one of my units. To do this accurately I need to wait until one other unit is complete (as it rolls up into the legal entity that I reconcile).
So unlike some of my other co-workers I do things that the rest of them don’t. I do journal entries across company codes. I work with international counterparts. I have to make sure that the millions sitting in our bank account is correctly reflected in the GL.
And that’s monthend.
Year-end is worse.
I am not allowed to have any IC variance, not even by $1K CAD. My tax provision has to be spot on. If I had under-remitted the monthly Corporate Tax Installment I have to get a cheque cut quickly.
As well, I have to work on something called “Yearend Pack” – which is a really time consuming and highly detailed set of reports which are used by External Auditors, Internal Auditors, Tax Auditors and other stakeholders in the overriding Corporation. Once complete it has to be signed off by both the CFO and the CEO/President. That set of signatures is required by Sarbannes-Oxley. With those signatures they are attesting to the fact that all internal controls are in place, there has been no collusion, all numbers are accurate – and that they will take criminal responsibility if the entity is lying to its stakeholders. A heavy burden, which explains why the whole year-end process is tedious, over-analysed and a godsend when it’s over.
I have one more set of reports to fill out for year-end and then it will sort of be over, for about a week. I have to complete the “Client Profitability” Report.
Then the wonderful set of Tax Packages have to be filled out. Because our Regional HQ is in NY there has to be a filing with the IRS. Which means the above YE Pack that I had completed needs to be done again, but from an American perspective (the above is for the UK Tax Authorities). Once completed to the satisfaction of the Tax Managers in NY I then start in on preparing the Tax Packages for CRA for the Canadian filings.
So if you don’t see me much over the next month or two, know that I am doing my damndest to ensure that the stockholders will be getting their money’s worth at the annual Shareholders’ Meeting.
Another yearend has come and gone and for the most part I felt it was successful, for me anyways. Not in that my companies made gobs of money, but that the processes themselves for closing the year went well.
One annoyance for me, which I mentioned to Mr B, Mr M, Mz J and Mr F, is one of my co-worker’s propensity to not actually think. Her company is a subsidiary of one of mine, so all her PBT (profit before taxes) roll up into my company for tax computation purposes .. that means she reflects no Income Tax Expense in her YE schedules, but I incorporate her in as a “permanent difference” (I’ll explain later what that is if anyone is truly interested). The YE schedules automatically populate with her actuals, so her YE schedules included a tax calculation. It requires a minor adjustment on her part to wipe out this calculation. Her lament “BEANIEEEEEEEE, how do I get rid of this?” My telling her to drilldown on a prior year YE schedule was met with mute silence, then a “butbutbut what do I do?”. Lord give me strength. Cos I have 3 companies to publish and I didn’t have the time to teach her (and I have access to her actuals in the reporting system) I just did it for her .. it was faster.
I was not feeling very charitable, especially when she asked me why her Fixed Asset Reconciliation wasn’t working (there were no formulae, that’s why) so I told her point blank — “I spoke to the IT Director, I begged him to give you Excel training” .. “Bean, please don’t tell me you singled me out” … “Yes I did”.
In general I like where I work, and I do find it heart-warming that my fellow Chief Accountant is on the ball and rarely asks me questions — except when it comes to Income Tax (since I have a stronger background in that then she does). And she only asks me excel questions when she’s trying to figure out why her vlookup or hlookup aren’t working. As well, my assistant is not afraid of me (unlike the rest of the reprobates and twits) and likes to use me as a weapon when she’s going into her own battle of wills with creative peeps.
And just this past week”Twat” (the lady who does cash applications) asked me that now that we are switching over to a new bank and banking system who will do the A/R reconciliations — I told her that she will, as it isn ‘t my job to hunt down clients who are remiss at paying on time.
As many of you know, and those who live under a rock may not know, Ontario is converting over to HST come July 1st 2010. For my non-Canadian readers, this is VAT, we just stupidly call it “Harmonized Sales Tax” cos it harmonizes the provincial sales tax with the federal goods & services tax (which is a VAT).
In the wacky world of VAT we have these things called ITCs (Input Tax Credits) — basically, you can claim back the VAT you paid so long as the purchases pertain to the continuing operations of the business. As an example, your stationary supplier charges you $5 in GST. You can apply that claim to the GST you charged your own clients, say about $80. So in essence you remit $75 to CRA (Canada Revenue Agency).
With Ontario Sales Tax, unless one was a manufacturer, the PST would be imbedded into a cost and could not be claimed back against the PST charged to clients. Though there are exceptions such as being eligible to use a G-permit or issuing a temporary PST Exemption Form for the sole purpose of not paying PST on something which will be sold on to a client (in essence you become a middle man).
So far the legislation for Ontario HST has not been completed, so it is a tad difficult to determine how to approach it. Today’s seminar was losely based on how Quebec instituted their own VAT (which they call QST) back in 1992, and how the Atlantic Provinces did theirs in 1997.
What we do know is that these will be zero-rated (meaning no provincial portion of the HST, which btw is 8%):
- books (provincial definition)
- kids’ car seats
- kids’ booster seats
- children’s clothing & footwear
- feminine hygiene products
- newspapers (provincial definition)
- meals under $4 — so yes, your Timmies double-double will be free of the dreaded 8% additional tax
The provincial portion of the HST will be applicable to certain insurance premiums, motor fuels and residential energy (hydro, natural gas, oil etc). Telecommunications will also be subject to the provincial portion of HST, except for internet access and toll-free numbers … again following the province’s strict definition of internet access). If you lease a vehicle, can’t claim back (if you are a business) the provincial portion of HST, so yeah, it will be 13% now for car leases.
Happy HST everyone!
btw British Columbia is also converting. The only provincial holdouts are Alberta (yes, they do have PST, but it’s very low and applied to only certain items), Saskachewan, Manitoba and PEI.
Every year a whole slew of peeps ask me if I am willing to do their taxes. As I work as an accountant all day, everyday, I tend to be quite tired of accountantcy once I am home. So I do my friends’ takes grudgingly, with the proviso that I require a meal in return — and I will not accept McDonald’s, Harvey’s, Burger King, KFC, Taco Bell or Wendy’s. I want a real meal, not some $2.99 meal deal with a 2-for-1 coupon attached to it.
I, naturally as a dutiful child, do my parental units’ taxes. Years ago, when my father was rushing to get to Australia to take care of his brother who had just suffered 2 heart attacks and a stroke, my father asked me to do my mother’s taxes. Until 1997 my father had always done his and my mother’s taxes…. but March 1998 was different, he didn’t have time cos of the rush trip to Australia. As I was in the CGA Programme of Studies at the time my father asked me to complete mum’s.
I did her taxes, reviewed prior year filings and noted that my father had never claimed any of his union dues. I claimed 5 years worth of dues on my mother’s taxes. There were also other tax credits which I applied from prior years (there are certain tax deductible expenses that you can accumulate up to a 5 year period which you can then claim all at once). Needless to say, my mum got a big fat refund of $1300 while my father tended to get her about $300-400 each year. The following year my father asked my mum to hand over her T4 and other tax slips… she said no, that she’d prefer her Bean to do them for her, as I get her bigger refunds. The bint never told my dad how much I got her as a refund, and when he found out the yearly demands started — We gave you life, do our taxes. So since 1999 my parents have not done their own taxes. I manage to take advantage of all the loopholes for them, so they get nice little fat cheques; which they really need as every penny counts when an OAP.
Onto my friends… they are terrified of taxes. I don’t know why, really. Taxes are relatively easy and can be quickly filled out in about 15-20 minutes. So they ask me to help. I don’t mind, up to a limit of 5 friends.
I have had people try to barter for my “services” – for things like ceremonial knives (athames), wands, silversmithing services, whatnot. I can’t pay the rent with a pretty knife, or a wand or jewellry. In today’s capitalistic western society money still talks, so I need money. I do accept a meal, because it means that I will be economically benefitting from such a meal — I won’t have to pay for the meal, and/or the groceries for that week.
So to those friends who want me to do their taxes — only 5 of you. If you come as a pair I will count you as “one”. And as a reminder, I am lactose-intolerant, don’t like fish and have developed a distaste for pasta and bread.