3.3 Financial Organization

Elements of Organizing Financials

In this final section of module three, you will consider organizing the financial side of a business or organization involves careful planning, management, and ongoing monitoring to ensure sustainability and success. 

As stated in 3.2, the first step to creating a budget is to outline anticipated income and expenses, while also planning fluctuations in income or expenses. You need to consider how will you cover the costs if all your childcare spaces are not full or if parents are unable to pay. It is important to have a reserve for months such as these.

Payment policies

Creating clear policies that outline when and how payments need to be made helps to mitigate late payments. Decide if you will have fees for late payments and what steps will be taken for non-payment. Having an easy way for parents to receive a fee invoice, make a payment and receive a receipt can not only minimize late payments from parents, but save you time. 

Payroll and Taxes

Ensuring that your staff are paid correctly, and on time is very important. Decide on a payroll system that ensures staff are paid accurately and on time, while complying with employment standards. There are a variety of payroll software that calculate taxes, benefits, and other deductions, as well as keep track of all your payroll. You will need to provide your employees accurate T4 statements, by the deadline each year. 

As a business or organization administrator, it is important to stay informed about tax requirements. Ensure that you have all staff fill out required payroll tax forms. You will need to ensure you understand how and when to remit taxes when required and set aside funds for tax payments required. It is highly recommended that you work with an accountant to prepare and file taxes accurately and on time. 

In Canada, employers are responsible for remitting taxes and filing T4 slips (Statement of Remuneration Paid)  with the Canada Revenue Agency (CRA) for each employee they paid during the tax year. Here’s a breakdown of their key responsibilities:

Remit Payroll Deductions on Time

Throughout the year, employers must deduct and remit:

• Income tax
• Canada Pension Plan (CPP) contributions
• Employment Insurance (EI) premiums

These remittances must be sent on time (usually monthly or semi-monthly, depending on business size).

Provide each employee with a T4 slip by the last day of February following the end of the tax year. 

The T4 should include:

• Total employment income
• Deductions (CPP, EI, income tax)
• Other taxable benefits (e.g., health benefits, allowances)
• Pension adjustments, union dues, etc.
• Employees must receive their copies electronically or in paper format.

• Online through CRA’s My Business Account or Represent a Client
• Through payroll software that supports XML internet file transfer
• On paper (if filing fewer than 50 slips, though online is encouraged)

• Incorrect income or deduction amounts
• Misclassification of taxable benefits
• Omitting terminated employees or those who only worked part of the year

Activity 3.3 | Financial Accountability

In this final activity of module three, you will reflect on who in your centre will handle expense approvals or purchases. 

Consider how materials are bought, how petty cash is managed and reimbursement processes if staff needs to buy things out of their pocket.

It is essential for everyone to be transparent and accountable and for checks and balances to be established. 

• How can you ensure that there are checks and balances in the accounting? 
• How will you be transparent with your team about expenses/costs? How would you start these conversations with staff about why you can or cannot spend in a specific area?