6 worked Small Business Accounting case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to small business accounting work, not a specific client's file.
Case Study 1 · Backlog brought current
3 Years Filed, $38,000 Removed From The Assessed Balance — Design Agency, Burnaby
Client: A 14-person design agency · Where: Burnaby, British Columbia · Engagement: 4 weeks, fixed fee
Years filed3
Assessed balance removed$38,000
CollectionsStopped
The situation — A 14-person design agency, Burnaby, British Columbia
A 14-person design agency in Burnaby, British Columbia had not filed for 3 years. The CRA had issued arbitrary assessments. The business was carrying two sets of numbers — one in the accounting file, one the owner actually ran the business on. That came on top of a growing interest balance.
What we did for A 14-person design agency, Burnaby, British Columbia
We started with the oldest year and worked forward so each year's closing balances fed the next. We set a monthly close calendar with a fixed cut-off, so the year-end became a review of work already done rather than a twelve-month rebuild. We filed the years in sequence rather than all at once.
The result — A 14-person design agency, Burnaby, British Columbia
Every year is now filed and assessed on actual figures. The notional assessments were vacated and $38,000 of the estimated balance came off, with a payment arrangement covering the rest.
Case Study 2 · CRA review defended
$16,500 Reassessment Reduced To Nil On Review — Off-Calendar Year-End Supplier, Red Deer
Client: A supplier with an off-calendar fiscal year-end · Where: Red Deer, Alberta · Engagement: 6 weeks, fixed fee
Reassessment reduced toNil
Tax protected$16,500
Prior filingsUndisturbed
The situation — A supplier with an off-calendar fiscal year-end, Red Deer, Alberta
A review notice arrived at a supplier with an off-calendar fiscal year-end in Red Deer, Alberta, covering small business accounting for two tax years. The auditor's working position was an adjustment of $16,500. It was driven by year-end statements that arrived four months late and never tied to the bank.
What we did for A supplier with an off-calendar fiscal year-end, Red Deer, Alberta
Rather than negotiate, we rebuilt the record. We reconciled the inter-company accounts, papered the arrangement with a written agreement, and aligned both corporations’ year-ends. We then submitted a point-by-point response that answered each proposed adjustment with the document behind it.
The result — A supplier with an off-calendar fiscal year-end, Red Deer, Alberta
The auditor accepted the documented position and closed the review without adjustment, protecting $16,500 and leaving the prior filings undisturbed.
Case Study 3 · Cash and remittance control
Instalments Rebased, $44,000 Of Cash Returned To The Business — Quarterly-Close Practice, Barrie
Client: A professional practice that closes its books quarterly · Where: Barrie, Ontario · Engagement: 5 weeks, fixed fee
Cash returned$44,000
Instalment basisCurrent year
ReviewedQuarterly
The situation — A professional practice that closes its books quarterly, Barrie, Ontario
A professional practice that closes its books quarterly in Barrie, Ontario was paying instalments calculated on a prior year. That year no longer reflected the business. Work in progress carried at billing value one year and at cost the next, so neither year was comparable was tying up $44,000 of cash.
What we did for A professional practice that closes its books quarterly, Barrie, Ontario
We rebased the instalments on the current-year estimate rather than the prior-year default. Alongside that, we built a fixed-asset continuity schedule from the purchase invoices. We set the capital cost allowance claim class by class rather than claiming the maximum by default.
The result — A professional practice that closes its books quarterly, Barrie, Ontario
$44,000 of cash stayed in the business, the penalty cycle ended, and the instalment position is reviewed each quarter against actual results.
Case Study 4 · Objection and relief
$103,000 Of Penalties And Interest Cancelled On Relief — First Year-End Corporation, Toronto
Client: An owner-managed corporation preparing its first year-end · Where: Toronto, Ontario · Engagement: 5 weeks, fixed fee
Penalties and interest cancelled$103,000
Relief groundsAccepted
AssessmentAdjusted to filed position
The situation — An owner-managed corporation preparing its first year-end, Toronto, Ontario
An assessment of $103,000 landed at an owner-managed corporation preparing its first year-end in Toronto, Ontario following a desk review. It turned on inter-company balances between two related corporations that had never been reconciled. The auditor had not seen the records behind it.
What we did for An owner-managed corporation preparing its first year-end, Toronto, Ontario
We valued work in progress on one consistent basis and documented the method, so the comparative year could be relied on. We then set out the legislative basis for the position alongside the documents supporting it.
The result — An owner-managed corporation preparing its first year-end, Toronto, Ontario
$103,000 of penalties and interest was cancelled under the taxpayer relief provisions, and the underlying assessment was adjusted to match the filed position.
Case Study 5 · Sale and succession
$885,000 Sheltered By The Lifetime Capital Gains Exemption — Related-Company Pair, Edmonton
Client: A corporation sharing administration with a related company · Where: Edmonton, Alberta · Engagement: 11 weeks, fixed fee
Gain sheltered$885,000
ClosingOn schedule
Share qualificationMet
The situation — A corporation sharing administration with a related company, Edmonton, Alberta
A corporation sharing administration with a related company in Edmonton, Alberta had an offer on the table and 28 months to close. The shares did not qualify for the capital gains exemption. No valuation on file to support the price the parties had agreed was part of the reason.
What we did for A corporation sharing administration with a related company, Edmonton, Alberta
We purified the corporation so the shares met the qualifying tests. We reconciled the general ledger to the GIFI schedules filed for each open year and corrected the two years where they disagreed. All of it was done well ahead of the closing date.
The result — A corporation sharing administration with a related company, Edmonton, Alberta
The sale closed on schedule with $885,000 sheltered by the lifetime capital gains exemption across the shareholders.
Case Study 6 · Scaling without breaking
Scaled To 51 Staff With $23,000 Of Working Capital Freed — Machine-Shop Owner-Operator, Surrey
Client: A machine-shop owner-operator · Where: Surrey, British Columbia · Engagement: 7 weeks, fixed fee
Headcount reached51
Working capital freed$23,000
Missed deadlinesZero
The situation — A machine-shop owner-operator, Surrey, British Columbia
A machine-shop owner-operator in Surrey, British Columbia was growing fast, with headcount reaching 51 in eighteen months. The back office had not kept up. A bank that refused to renew an operating line without compliant statements was the first thing to break.
What we did for A machine-shop owner-operator, Surrey, British Columbia
We moved accruals, prepaids and depreciation into a documented month-end checklist, so they stopped being year-end discoveries. We built the compliance calendar for the size the business was becoming rather than the size it had been.
The result — A machine-shop owner-operator, Surrey, British Columbia
The business reached 51 staff with no missed remittance and no late filing. $23,000 of working capital was freed in the process.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
