Glossary : Terms and Definitions
B
Business Consultation
Involves providing expert advice and guidance to organizations, helping them address specific challenges, improve operations, or make strategic decisions to enhance their overall performance and profitability
Business Expenses
These are costs incurred by a company in the process of operating and conducting its daily activities. These expenses may include rent, utilities, employee salaries, office supplies, and other expenditures necessary to maintain and grow the business.
C
Canada Pension Plan (CPP)
This is a social insurance program in Canada that provides retirement, disability, and survivor benefits to eligible contributors and their families. It is funded through contributions made by employees and employers during their working years.
Canada Revenue Agency (CRA)
Is the government agency responsible for administering tax laws in Canada, including collecting taxes and providing services related to taxation and benefits.
Cash flow management
This is the process of monitoring, analyzing, and controlling the inflow and outflow of cash within a business or personal finances to ensure there is enough liquidity to cover expenses, meet financial obligations, and make strategic investments while avoiding cash shortages.
Compliance
Refers to adhering to laws, regulations, and standards relevant to a particular industry or activity, ensuring that an individual or organization is following legal requirements.
Cost savings
Refers to the reduction of expenses or expenditures in a business or personal financial context, resulting in lower overall costs and greater efficiency. This can be achieved through various means, such as streamlining operations, negotiating better deals, or cutting unnecessary expenses.
D
Deductions
These are expenses or allowances that reduce taxable income, potentially lowering the amount of taxes owed. They can include items like business expenses, charitable contributions, or tax credits.
E
Employment income
Includes all compensation, such as wages, salaries, and bonuses, earned through work performed for an employer.
Employment Insurance (EI)
This is a program in Canada that provides temporary financial assistance to individuals who are temporarily unemployed or unable to work due to specific reasons, such as illness or maternity leave.
Estate planning
Involves creating a comprehensive strategy for the management and distribution of your assets and wealth after your passing, including considerations for wills, trusts, and tax implications.
F
Financial statements
Are formal reports that present the financial performance and position of a company, typically consisting of the balance sheet, income statement, and cash flow statement. These statements provide a snapshot of a company’s financial health and are essential for assessing its profitability, solvency, and overall financial condition.
I
Interest charges
Represent the additional cost incurred when borrowing money, using credit, or financing a purchase. These charges are typically calculated as a percentage of the principal amount borrowed and are paid to the lender as compensation for the use of their funds.
Investments
Involve allocating capital or resources with the expectation of generating a financial return, whether through income, capital appreciation, or both, in the future. The goal of investments is to increase wealth or achieve specific financial objectives.
M
Managing finances
Refers to the process of overseeing and controlling your monetary resources, including budgeting, saving, investing, and making financial decisions to achieve your financial goals and ensure financial stability.
P
Penalties
These are financial sanctions or punitive measures imposed on individuals or organizations for failing to comply with rules, regulations, or legal obligations.
R
Retirement planning
This is the process of strategically managing your finances and assets to ensure a secure and financially comfortable retirement. It involves saving and investing during your working years to achieve the desired income and lifestyle during retirement, considering factors such as pensions, savings, and investments.
T
Taxable benefits
These are non-cash advantages or perks provided by an employer to employees, such as company cars or housing, which are subject to income tax.
Tax audits
These are examinations conducted by tax authorities to review an individual’s or business’s financial records, ensuring accurate reporting and compliance with tax laws.
Tax liabilities
Represent the amount of taxes an individual or business owes to the government based on their income, transactions, and financial activities.
Tax Preparation
Is the process of collecting, organizing, and accurately completing the necessary documents and calculations required to file your income tax return with the government, ensuring compliance with tax laws and regulations while maximizing potential deductions and credits.
T4 form
This is a statement of earnings and deductions provided to Canadian employees by their employers, which is used for income tax reporting.
T4 & T4 Summary
In Canada, T4 and T4 Summary forms are used for reporting employment income and deductions for employees. T4 summarizes income and deductions, while T4 Summary provides totals for all T4s issued.
V
Vacation pay
This is a form of compensation provided to employees for their time off work, ensuring they receive income while on vacation or taking paid time off.
W
Wages
Are a type of employment income, representing regular payments made to employees for their work, typically on an hourly or salary basis.
