Accountants Essential for Fiscal Health

Canada's accountants deemed "essential service"

Canadian businesses and citizens rely on our accountants to keep us fiscally healthy. Among their many vital functions, they balance our books, ensure employees get paid, and keep tax dollars working. We trust accounting professionals to report accurately and ethically – and to advise us in times of financial challenge. Accountants are considered an “essential service” by the Canadian government.

An essential service, defined by our Public Service Labour Relations Act, is a service that if not delivered, creates an impact on the health or safety of an individual. Officially, Canada’s essential financial services include payroll, payment processing, and accounting and tax services. The designations help alleviate potentially devastating financial challenges faced by businesses and individuals in the event of a crisis; so it’s crucial that accountants have business continuity plans in place to be operational during major business disruptions.

Payroll is considered “mission critical” by the Canadian Payroll Association. Perhaps that’s why Payroll Continuity Plans (PCP) are demanded as a best practice across this country in the event of a full or even partial business interruption.

Business continuity ensures no Canadian has to wait to get paid.

Who’s keeping Canada’s books?

Canada’s business landscape comprises 97.9% small and medium sized companies according to the government’s 2019 Key Small Business Stats report. It’s these enterprises, with 99 or fewer employees, that keep our economy humming. For many small businesses, cash flow is the #1 concern and could be ruinous in the event of a work stoppage. In that case, the ability to send invoices might be just enough to keep a small operation afloat.

We wondered: who handles their accounting?

For small and medium businesses, a recent survey revealed that a whopping 81% of Canadian SMBs are handling their own accounting, not outsourcing to an accounting firm. Nearly three-quarters of them are using accounting-specific software to get the job done. That’s good news for Canadians because it means plenty of accounting data is already digitized, and with proper planning would be regularly backed up.

Accountants are most often the ones who prepare and file taxes – always a responsibility with a fixed deadline – which means being operational under any conditions. Whether filing quarterly or annually, or filing an extension, the cut-off date waits for no one.

Accountants also take on specialized tasks such as budgeting, financial reporting, auditing and forensic accounting. Regardless of function, a key aspect of any business continuity plan is to consider where accounting data is stored. If “in the cloud” it ensures the safeguarding and security of client data and allows access from any device. Software-as-a-Service (SaaS) ie: software licensing agreements also enable reliable “work from anywhere” options.

A key aspect of any business continuity plan is to consider where accounting data is stored.

Tech Tools for Accountants

New technology tools are highlighted by CPA Canada to encourage more productive, secure, modernized accounting practices – and are key to business continuity preparedness. Some useful tools for accountants are:

  • Data from Picture tool for Excel Using your phone’s camera, take a picture of words and numbers and it automatically converts to an Excel spreadsheet through the Excel app
  • Calendly This app lets clients choose an open slot on your calendar to schedule a meeting
  • Accounting software for Canadian businesses Popular platforms include FreshBooks, Quickbooks, Netsuite, Zoho, Sage, Wave Accounting
  • Cloud-based accounting software Xero allows you to work from anywhere on any device
  • Online practice management Run your entire accounting business on a platform like Scoro; includes invoicing
  • File-sharing services Canadian-based (an alternative to Dropbox) allows you to store files, access from anywhere, and share files securely. Data is stored in Canada and is 100% compliant with federal, provincial and global privacy standards

Electronic signatures are increasingly becoming part of standard accounting practices to efficiently reach clients wherever they are. Electronic signatures are legally binding in Canada and are a useful tool for signing important fiscal documents. E-signatures actually provide more proof of signer identity than paper-based signatures, encrypting each signature with a digital audit trail that protects the integrity and validity of every document.

E-signatures enable accountants to serve their clients remotely under any circumstances – even without an internet connection.

Canada’s Federal government recently approved the use of electronic signatures for tax returns. Canadians using professional tax preparers used to have to sign their tax returns before submission. Now that physical signature is no longer required.

Accountants to Canadian Government

Every day, and especially in times of crisis, transparency and reliable fiscal reporting are paramount to ensure public trust. Effective delivery of public services falls on the shoulders of a responsible government, who in turn, relies on trusted practitioners like accountants to determine budgets and planning.

At CPA Canada’s Digital and Data Transformation Roundtable the importance of emerging technologies for accounting professionals was a key topic of discussion. The future of accountancy work, they inform, must leverage tech tools and innovative digital solutions to maintain data integrity and credibility.

In fact, the Government of Canada’s Digital Operations Strategy demands it, requiring services to be delivered in simple, modern and effective ways that are “optimized for digital and available anytime, anywhere and from any device”.

As an essential government service, every individual accountant and every accountancy firm must be prepared for calamitous work interruptions.

Business continuity requires answers to these questions:

  • What are the critical assets that would interrupt your business in the event of a major work disruption?
  • Could you and your staff work remotely?
  • Would you have access to your internal data? Payroll, receivables, payables
  • Would you have access to secure customer data? Records, files, documents, correspondence
  • Could you get important documents signed in time?

With a significant percentage of Canadians living paycheque to paycheque, it’s easy to appreciate how a business interruption impacting payroll could have devastating effects. It is this, and other critical functions, that deem Canada’s accountants an essential service bound by a commitment to business continuity.