FAQs

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  • Business Formation
  • Bookkeeping
  • Payroll
  • Virtual CFO
  • Tax Protection (Tax defense)

Business Formation:

M7’s incorporation packages include full incorporation services, along with the preparation of your Minute Book Documents to ensure your company is legally set up.

Our incorporation packages include:

✔️ Unlimited business name searches
✔️ 1 Name reservation
✔️ Government-issued Corporation Number(s)
✔️ Government-issued Incorporation Documents
✔️ Minute Book documents
✔️ CRA Business Number
✔️ Secure business document storage
✔️ Up to 3 user accounts
✔️ Exclusive M7 Perks
✔️ Chat support

Once your business is incorporated, M7 helps you stay legally compliant by assisting with your Annual Legal Return and preparing necessary corporate resolutions.

Incorporations start at $499 (final cost depends on jurisdiction and subscription plan).

In Canada, business entities, such as corporations, can offer tax advantages, like access to the Small Business Deduction, which reduces tax rates on the first $500,000 of active income. Corporations can also deduct business expenses, such as advertising and mileage, and benefit from credits for renewable energy, retirement plans, or health insurance. Staying compliant with financial and regulatory requirements is essential. For personalized guidance, it’s best to consult a tax professional or legal advisor, as tax rules and business structures may vary. Schedule a Call to learn more!

How you choose a business structure depends on a lot of things. Each structure comes with its own specific rules, requirements, and considerations. The most common types of businesses are:

  • Corporations
  • Sole Proprietorship

A Business Number (BN) is a unique identifier issued by the Canada Revenue Agency (CRA) for tax purposes. Certain businesses are required to have a BN, such as corporations, partnerships, and sole proprietorships with employees, GST/HST obligations, or payroll requirements. All of our packages include obtaining a BN as part of the setup process.

 

A Corporation is a separate legal entity from its owner(s), meaning it has its own rights, responsibilities, and tax obligations. Corporations benefit from limited liability, meaning owners are not personally responsible for the business's debts. They may also access tax advantages, such as the Small Business Deduction, and are taxed at corporate tax rates. Corporations are required to file a T2 Corporate Tax Return and maintain separate financial records.

A Sole Proprietorship, on the other hand, is an unincorporated business owned by a single individual. The owner is personally liable for all debts and obligations of the business. Income from a sole proprietorship is reported on the owner's personal tax return (T1), and all profits are taxed at personal income tax rates. Sole proprietors have fewer administrative requirements but do not have the same liability protection as corporations.

Bookkeeping:

Business owners often realize it's time to hire a professional bookkeeper when they find themselves staying up late, struggling to stay on top of bookkeeping tasks. By then, their financial records are usually disorganized, and they may not even know they’re overpaying in taxes. Bringing in a bookkeeper helps restore order, offering clearer insight into income and expenses, and ensuring accurate financial management that can save money in the long run. That's where we come in!

To someone unfamiliar with the profession, bookkeepers and accountants may appear to have similar roles, as both handle financial records for businesses. However, the distinction between the two is much more complex and nuanced than it might seem at first glance. To truly understand the value each brings to your business, it's important to grasp the specific responsibilities of both positions. For a detailed breakdown of their roles, click here for a comprehensive guide to both professions.

 
 

Outsourcing your bookkeeping to a professional has many benefits. Primary among these benefits is preserving the integrity of your books.

Beyond that, outsourcing your bookkeeping to a professional helps to ensure that you are paying the proper amount in taxes, maximizing your profitability, and most importantly, that you have more time to focus on the day-to-day operations of your business.

It's generally best to separate bookkeeping and tax preparation duties. While some tax preparers offer bookkeeping services, they typically specialize in tax law, not the detailed financial reporting that bookkeepers handle. Tax preparers tend to charge more for bookkeeping, and their focus is on tax returns. Bookkeepers, however, provide timely reports that help business owners track performance and profitability.

By using both professionals, you gain the expertise of two specialists—ensuring accurate records and efficient tax filing while maintaining a system of checks and balances.

There are several ways that you can transfer data and materials to us. You can use regular mail to send us receipts. You can drop them off at our office, or scan and e-mail them. Many clients find that it’s easiest to provide us with read-only access to their online bank statements and credit card statements. Additionally, if they want very detailed books that show everything purchased, sending us their receipts is best.

However, if they just want categories tracked and are less interested in the individual details, then the online banking system works well.

Yes, we have extensive experience supporting companies in both the Canada and US.

M7 supports a wide range of businesses, including startups, small to medium-sized enterprises, and established companies across various industries.

  • Transportation & Logistics: Trucking, freight, and logistics companies.
  • Construction & Trade: Construction firms, wholesale distributors, and retail businesses.
  • Entrepreneurs & Professionals: Startups, professional service providers, and growth-focused small businesses.

To get started with M7, you'll need to provide your business details, financial records, and access to relevant documents such as bank statements, invoices, and receipts. We'll guide you through the onboarding process to ensure a smooth transition.

The Jump Start and Jump Start + Tax Bookkeeping plans include a $500 setup fee for Odoo and $1,000 for QBO. What’s included in the Odoo and QBO setup process?

  • System Configuration: Setting up the chart of accounts, tax rates, and default settings tailored to your business.
  • Data Import: Importing existing data, such as customer/vendor details, transactions, and balances.
  • Workflow Setup: Customizing workflows for invoicing, expenses, payments, and reporting to ensure efficiency.
  • User Training: Providing initial guidance to help you navigate and make the most of your new system.
  • The Self-Service plan, starting at $500, is designed for businesses that prefer to take a more hands-on approach while still benefiting from our expertise during the setup process.

For clients who only require a simple duplication of their Odoo database, the setup fee starts at just $100, covering the replication and configuration of your existing data in a new database.

No, everything is transparent and clearly outlined upfront. However, if you choose to access the complete softwares package, such as additional Odoo features or modules, you may need to upgrade for an additional cost.

  •  Onboarding your business with M7 Tax requires additional time and due diligence over the next 4 weeks working alongside our team to have your business compliant.
  • Additional hours and staff are at your disposal to ensure proper coherence between M7.
  • Ensure all documents (bank statements, bills, invoices, receipts, cheques, loan/finance agreements) are provided promptly.
  • Work alongside current business procedures and implement any necessary systems to minimize cost and time.
  • Develop workflow with M7 for a successful relationship between an account manager and your firm.
 

  • With our Odoo software access, you’ll receive:

    • Full access to the Accounting App for seamless financial management.
    • Full access to the Discuss App for streamlined team communication.
    • Full access to the Documents App for efficient document organization and storage.
    • 200 free AI-powered OCR recognitions for processing bills, receipts, and documents. After the initial 200 OCR uses, additional charges apply based on your business volume.

  • Yes, bookkeeping support is included with your service. You can ask questions related to bookkeeping at any time. However, tax strategies and advisory services are available as an add-on service. Learn more our Tax Advisor portal.

  • To calculate your monthly expenses, total all business costs, including rent, utilities, payroll, software subscriptions, supplies, and other recurring expenses. Be sure to include variable costs like marketing, travel, or equipment purchases if applicable.
  • We aim to provide clear and straightforward pricing. After analyzing various pricing models, we discovered that costs closely align with the complexity of a business while remaining easy to calculate. To recommend the most suitable M7 plan for your business, we also consider factors such as the number of financial institutions, transaction volume, and required support hours.
  • Yes, when you prepay for a year, your price is locked in for the duration of the term. Any price changes will only apply after the prepayment period ends.

  • When you use M7, you have two options for managing your taxes:

    1. M7 Tax Services: Tax preparation is included with the Jump Start + Tax plan. However, for the Jump Start and Self-Service subscriptions, tax preparation is not included and must be purchased separately if you choose to use M7 for these services.

    2. Work with Your Own Tax Firm: If you prefer to use another tax firm, M7 can seamlessly hand off your prepared books to them. This handoff service is included with your M7 Bookkeeping subscription at no additional cost.

  • M7 Tax provides comprehensive tax preparation services for Canada, including:

    • Federal and provincial income tax preparation for businesses and individuals

    • T4 and T5 slip preparation and filing

    • Email support for all included deliverables

  • Yes, with M7 Tax, we can prepare and file your T4s and T5s for employees and shareholders. Our team ensures accurate reporting and compliance with Canadian tax regulations. However, if you are subscribed only to M7 Bookkeeping, these services are not included.

Payroll:

Yes. In Canada, payroll taxes include:

  • Canada Pension Plan (CPP) contributions
  • Employment Insurance (EI) premiums
  • Income tax deductions
  • Provincial payroll taxes (applicable in certain provinces)


Employers are responsible for withholding these amounts from employees' wages and remitting them to the Canada Revenue Agency (CRA).

Payroll compliance in Canada refers to the legal obligations employers must follow regarding employee compensation, deductions, and reporting. This includes:

  • Deducting and remitting income taxes, CPP, and EI
  • Maintaining accurate payroll records
  • Issuing T4 slips to employees and T4 summaries to the CRA
  • Following provincial employment standards on wages, overtime, and vacation pay
  • Complying with workers' compensation and other payroll-related regulations

Failure to comply can result in penalties and interest charges from the CRA.

Payroll compliance in Canada is regulated by:

  • Canada Revenue Agency (CRA): Oversees payroll deductions, tax remittances, and reporting.
  • Employment and Social Development Canada (ESDC): Enforces federal labor standards.
  • Provincial/Territorial Ministries of Labour: Regulate employment standards, such as minimum wage and overtime rules.

Some provinces also have additional payroll tax requirements, such as Ontario’s Employer Health Tax (EHT) and Quebec’s CNESST contributions.

No, a Business Number (BN) issued by the CRA is a permanent identifier for tax purposes. However, you can close specific CRA accounts (such as payroll, GST/HST, or corporate tax) if your business is no longer operating.

To close a payroll account, you must:

  1. File all outstanding payroll remittances and T4 slips.
  2. Send a request to the CRA through your online account or by mail, providing your BN, business name, and reason for closure.

Even after closing, the BN remains on record with the CRA for future reference if needed.

Employers in Canada must contribute to:

  • Canada Pension Plan (CPP): Matching employee contributions (5.95% in 2024, up to the maximum pensionable earnings limit).
  • Employment Insurance (EI): Employer portion (1.4 times the employee contribution, up to the annual maximum).
  • Provincial payroll taxes: Some provinces impose additional employer taxes, such as:
    • Ontario Employer Health Tax (EHT)
    • Quebec Parental Insurance Plan (QPIP)
    • Manitoba and Newfoundland & Labrador payroll taxes

The total payroll tax burden varies depending on the province and the employee’s earnings.

Virtual CFO:

Virtual CFOs are professionals in financial management. That is all we do. Accountants are professionals in taxes, financial statement preparation, and auditing. Asking your Accountant to assist your company in financial management and strategic planning is a little like asking your architect to build your building.

Virtual CFOs perform a variety of essential roles, including:

  • Financial Strategy: Crafting strategies aligned with long-term business goals.
  • Cash Flow Management: Ensuring businesses maintain healthy cash flow.
  • Risk Management: Identifying and mitigating potential financial risks.
  • Financial Reporting: Overseeing accurate and timely financial reporting.
  • Cost Management: Finding ways to reduce costs and increase efficiency.

Choose based on your business size and needs:

  • Transactional: For small teams needing basic financial oversight.
  • Controller: For mid-sized teams requiring regular financial analysis.
  • Virtual CFO: For larger organizations needing strategic support.

It’s ideal for businesses:

  • With over $2 million in annual revenue.
  • Looking for financial advice without hiring a full-time CFO.
  • Replacing an existing CFO or needing strategic financial insights.

You probably do not need a Virtual CFO if your controller: provides you with timely, accurate, and insightful financial and operational information about your business; is the person you trust to help you create and update your strategic plans; can help you assess your organizational efficiency; is helping you lead your company to the next level; has assembled a talented and professional accounting staff; can put together a financial package, effectively present it to your banker, and get the financing you need. If your controller cannot do these things, a Virtual CFO can.

Tax Audit Protection:

The Canada Revenue Agency (CRA) defines a tax audit as the process of reviewing taxpayers' financial records and documents to verify the correct amount of taxes, interest, and penalties owed according to the law. Essentially, it is the government's method of ensuring that Canadians’ tax filings are both accurate and truthful. The CRA can conduct audits on GST/HST returns, income tax returns, excise taxes, and payroll records.

Yes, the CRA does conduct audits on individuals. While businesses are frequently audited, self-employed individuals and business partners are also often targeted for CRA audits. These audits are carried out to verify compliance with Canadian tax regulations and may examine different parts of personal tax returns, including income, deductions, credits, charitable donations, and other relevant financial details.

While the CRA typically has a 3-year window to audit your tax returns, they can extend this period under certain circumstances, such as suspected fraud, unreported income, or significant errors. For these reasons, we recommend keeping all relevant financial records for a minimum of seven years. This timeframe covers the standard audit window plus additional years in case of extended audits.

The CRA can audit beyond the usual 3-year limit in cases of suspected fraud, unreported income of $500 or more, or if you haven’t filed at all. If you’ve filed correctly, you generally have peace of mind after three years. However, if in doubt or involved in any of the above situations, seek professional help. Regularly reviewing your financial records and staying compliant with tax laws can help you avoid unexpected audits.

This is a crucial concern for many people and business owners, especially during an audit. The answer is: It depends.

When the CRA conducts an audit, they require evidence to support the information you’ve reported on your tax return. Typically, you’ll be asked to provide bank statements, receipts, and proof of payments. These documents are essential for verifying your reported income and expenses. If the documentation you provide is sufficient, the CRA will generally not need to dig deeper. However, if they find discrepancies or insufficient evidence, they may request additional information, potentially including more detailed bank records.

The key to protecting your business during a CRA audit is meticulous record-keeping. Any expenses you claim on your tax return should be backed up with corresponding documentation, whether they go through your bank account or not. If you’re claiming a business expense that wasn’t paid directly through your business bank account, make sure you have a clear proof of payment and receipt. Misreporting or a lack of documentation can raise red flags, leading to more in-depth scrutiny or even penalties.

It’s also critical to avoid mixing personal and business expenses. If you mistakenly record personal expenses as business ones, or if your bookkeeping is inconsistent, it can create issues during an audit. The CRA may question these transactions, which can lead to a more extensive audit or even potential fines. Always ensure your records are accurate and that any expenses claimed are genuinely business-related.

Understanding what the CRA looks for during an audit can help you stay prepared. The CRA advises businesses to keep all financial records for at least six years. If any documents are missing, it’s essential to contact your bank or suppliers to retrieve them. Consulting with an accountant or bookkeeper can also help ensure that your records are complete and audit-proof.

If you’re currently facing an audit or want to ensure your business is ready for one, M7 Tax is here to help. We can review your books, ensure everything is in order, and represent you in dealings with the CRA. Don’t wait until you’re under the microscope—reach out today to safeguard your business.