Answers · Topic 8 of 10
CFO, Cash Flow and CRA Problems answers.
Cash flow, margins, budgets and financing, plus what to do when the CRA audits, you are behind on filings or you need a payment plan. 20 questions, each answered in the first paragraph.
By the AnalytIQ Accounting team · Last reviewed: September 6, 2026
Can I set up a payment plan with the CRA?Yes.How do I build a 13-week cash flow forecast?A 13-week cash flow forecast starts with a business's actual opening cash balance, then adds expected receipts and subtracts expected disbursements in weekly buckets, one column per week, for the next thirteen weeks.How do I build a small business budget?Build a budget from last year's actual revenue and expenses rather than a blank spreadsheet, then break revenue into the drivers that actually produce it and split costs into fixed and variable, adjusting for known seasonality.How do I calculate my break-even point?Break-even is the point where total revenue equals total costs; in revenue terms it is fixed costs divided by the contribution margin ratio, and in unit terms it is fixed costs divided by the contribution margin per unit.How do I choose an accountant for my small business?Choosing an accountant comes down to a handful of practical questions: are they a CPA with actual experience in your industry, do they work on the cloud accounting stack you use or want to use, do they quote fixed fees or bill hourly, and are they proactive about planning rather than focused only on compliance.How do I hand a family business to the next generation tax-efficiently?A tax-efficient handoff usually combines an estate freeze, which locks in today's value and lets future growth pass to the next generation, with the intergenerational transfer rules that took effect in 2024, which can allow the lifetime capital gains exemption on a genuine sale to a child's corporation.How do I prepare for corporate year-end?Preparing for corporate year-end means working through a checklist in the weeks before your fiscal year-end date: reconcile every bank and credit card account, review receivables and payables, count inventory if you carry it, list fixed asset additions, clean up any shareholder loan balance, decide on a bonus or dividend, and tie out HST and payroll to your books.How do I qualify for a small business loan in Canada?Qualifying for a small business loan in Canada generally requires two to three years of financial statements or a compilation, current CRA filings for both the business and the owner, a debt service coverage ratio that shows the business can afford the payments, and often a personal guarantee from the owner.How do I value my small business?There is no single formula for valuing a small business; the three main approaches are a multiple of normalized earnings (EBITDA or SDE), the value of the underlying assets, and a discounted cash flow projection.How much should I set aside for taxes as a self-employed Canadian?A commonly used approximate range is to set aside 25 to 35% of net self-employment income, covering income tax at your marginal rate and both the employee and employer halves of CPP; where you land in that range depends on your total income, since Canada's tax and CPP rates are graduated.Should my business lease or buy equipment?There is no universal answer: buying builds equity and lets you claim capital cost allowance, while leasing preserves cash and shifts obsolescence risk to the lessor, and lease payments are generally fully deductible as they are paid.What does a fractional CFO do for a small business?A fractional CFO does the same forward-looking finance work a full-time CFO would: building cash flow forecasts, managing pricing and margin, setting up KPI dashboards, preparing for financing, and reporting to owners or investors, but on a part-time, ongoing basis rather than a full-time salary.What happens if I have not filed taxes in years?Not filing for several years brings late-filing penalties that grow the longer a return sits outstanding, the possibility of the CRA filing an estimated assessment on your behalf that rarely favours you, and the loss of benefits and refunds tied to having a return on file.What is CRA taxpayer relief and when can penalties be waived?CRA taxpayer relief is a request, filed on form RC4288, asking the CRA to cancel or waive penalties and interest, not the underlying tax itself, on grounds of extraordinary circumstances such as illness or disaster, an error or delay caused by the CRA, or genuine financial hardship.What is gross margin and what should mine be?Gross margin is calculated as (revenue minus cost of goods sold) divided by revenue, expressed as a percentage, and it shows how much of every sales dollar is left after covering the direct cost of delivering the product or service.What is the CRA Voluntary Disclosures Program?The Voluntary Disclosures Program, or VDP, lets a taxpayer come forward and correct a past error or omission, an unfiled T1135, unreported income, or a missed GST/HST filing, before the CRA has contacted them about it, in exchange for reduced penalties and, in many cases, partial interest relief and protection from criminal prosecution for that matter.What KPIs should a small business track monthly?Almost every small business should track four numbers monthly: cash runway, gross margin, accounts receivable days, and accounts payable days, plus revenue by line to catch a shrinking segment before it drags down the total.What triggers a CRA audit and how do I prepare?A CRA audit is usually triggered by something that looks statistically unusual for the business's industry, results that fall outside typical benchmarks, repeated years of losses, unusually large HST refund claims, cash-intensive operations, real estate flips, or a mismatch between a T1135 and other reported information, along with occasional informant tips and data the CRA receives directly from platforms and financial institutions.When does a small business need a CFO?A small business typically needs CFO-level support once its finances get complex enough that the owner can no longer answer basic questions, like current runway or true product margin, off the top of their head.Why is my business profitable but always short on cash?A business can be genuinely profitable and still run short on cash because several real cash outflows never show up as an expense on the income statement: unpaid customer invoices, inventory bought but not yet sold, loan principal repayments, owner draws, tax and HST instalments, and equipment purchases.
Where we do the work
Rules at a glance · CFO, Cash Flow and CRA Problems
Not sure which applies to you? Get a free proposal or book 15 minutes.
Reporting13-week cash forecastA weekly cash flow forecast catches a shortfall early enough to still act on it.
Watch forCRA audit triggersLarge HST refunds, repeated losses and cash-intensive operations draw CRA attention first.
Key formRC4288 reliefRC4288 asks the CRA to waive penalties and interest, not the tax itself, for up to ten years.
ThresholdInstalments over $3,000Quarterly instalments apply once net tax owing passes $3,000 in the current year and a prior one.
What we take off your plate
Advisory & CFO for small business owners, handled.
- 13-week cash forecasts and monthly KPIs built on clean, current books
- CRA payment plans and voluntary disclosures filed before things escalate
- Monthly numbers with the three metrics that matter to you
- Cash-flow forecast before a hire, lease or purchase
- Bank and lender packages prepared
- A quarterly sit-down on where the money went
Mistakes we fix
Three things that go wrong for small business owners.
- Waiting for a CRA letter instead of using the Voluntary Disclosures Program while it’s open
- Treating a profitable income statement as proof there’s enough cash in the bank
- Missing quarterly instalments and letting CRA interest compound on top of the balance
Recognise one? Book a call and we will tell you what it is costing you.
How we can help · CFO, Cash Flow and CRA Problems
Where we do the work.
Fixed fees, quoted after a short discovery call. Canadian and US filings under one roof.
Advisory & CFOCash flow forecasts and the KPIs that show a shortfall before it becomes a CRA problem.Advisory & CFO →BookkeepingClean, current books are what turn a forecast or a CRA payment plan into a real number.Bookkeeping →Tax servicesVoluntary disclosures, taxpayer relief and instalments handled before penalties stack up.Tax services →
Free proposal
A fixed fee for your advisory and CFO work, in writing.
- Tell us about your business. The form takes about a minute.
- A short discovery call. Fifteen minutes to confirm what you need.
- A fixed fee in writing. We reply within one business day. No hourly surprises.
- Canadian and US filings under one roof
- Cloud-first: QuickBooks Online, Dext, Wagepoint
- Brampton, Ontario, with clients across Canada and the US
Answers
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