Why Alberta Businesses Get CRA Letters — and How Proper Accounting Prevents Them

If you run a business in Alberta, especially around Edmonton, receiving a letter from the Canada Revenue Agency (CRA) can be one of the most stressful experiences you’ll face. The good news? Most of these letters are avoidable. 

For many Alberta business owners, the surprise of a CRA notice doesn’t come from intentional wrongdoing — it comes from compliance gaps, mismanaged accounting, and preventable mistakes. 

At Beatific Accounting, we help Alberta businesses not only stay compliant but also build accounting systems that make audits and compliance stress-free. Below, we explain the most common reasons CRA letters are issued — and how proper accounting prevents them. 

1. Inaccurate GST Filings 

Even though Alberta does not have provincial sales tax (PST), it does require accurate GST (Goods and Services Tax) reporting. Many businesses assume that “simple GST = low risk,” but that’s not true. 

Common GST Triggers: 

• Incorrect GST on sales or services 

• GST claimed on non-eligible items 

• Misapplied Input Tax Credits (ITCs) 

• Late quarterly filings 

When GST is calculated incorrectly, the CRA flags discrepancies and issues review letters. Proper accounting captures every transaction correctly, ensuring GST is remitted in full and on time. 

How Beatific Prevents This: 
✔ Accurate GST classifications 
✔ Automation of GST tracking 
✔ Monthly reconciliation so nothing slips through 

2. Payroll Errors and Non-Compliance 

Payroll is another major area that triggers CRA notices. This includes: 

• Wrong CPP and EI calculations 

• Missed or late source deduction remittances 

• Errors in T4 or ROE filing 

Even a single payroll slip can escalate into a larger compliance issue if left unattended. 

How Beatific Prevents This: 
✔ Payroll automation and proper setup 
✔ Accurate year-end reporting 
✔ Compliance checks before every remittance deadline 

3. Missing or Disorganized Financial Records 

One of the most common notices we see is a request for receipts, invoices, or supporting documentation. 

The CRA will request: 

• Proof of expenses 

• Contracts for subcontractors 

• Bank reconciliations 

• Mileage records for business vehicles 

If these records are incomplete or disorganized, your business can face reassessments and penalties — even if everything you reported was legitimate. 

How Beatific Prevents This: 
✔ Document storage systems 
✔ Organized expense tracking 
✔ Audit-ready bookkeeping 

4. Misclassified Worker Status 

Alberta has a strong contracting ecosystem — trades, IT services, consulting, and more. But misclassifying workers as “contractors” when they should be “employees” is a frequent cause of CRA letters. 

This affects: 

• CPP contributions 

• EI remittances 

• Workers’ compensation reporting 

Improper classification can lead to significant retroactive assessments. 

How Beatific Prevents This: 
✔ Worker classification review 
✔ Proper setup of payroll vs contractor systems 
✔ Guidance on CRA standards 

5. Poor Expense Categorization 

Business owners often overlook how expenses must be categorized for tax purposes. Common issues include: 

• Personal and business expenses mixed together 

• Fuel, meals, and vehicle expenses improperly documented 

• Software or subscription costs misreported 

• No logbook for vehicle usage 

Even legitimate business expenses can be denied if they lack clear documentation or proper accounting treatment. 

How Beatific Prevents This: 
✔ Training owners on documentation 
✔ Monthly categorization checks 
✔ Clear separation of business vs personal 

6. Bad Cash-Flow Planning and Instalments 

Some CRA letters aren’t about errors — they’re about cash-flow mismanagement. 

The CRA sends instalment reminders when:

• Your tax balance is higher than expected 

• You haven’t paid enough throughout the year 

• Your estimated taxes are consistently off 

This often surprises owners who think pending refunds will cover liabilities. 

How Beatific Prevents This: 
✔ Quarterly tax projections 
✔ Estimated liability reviews 
✔ Proactive instalment reminders 

Prevention Starts With Proper Accounting — Not Just Bookkeeping 

A common misconception is that bookkeeping alone will keep a business compliant. But bookkeeping is only the foundation. 
What prevents CRA letters is professional accounting — meaning: 

✔ Strategic review of returns 
✔ Real-time reconciliation 
✔ Projection of tax liabilities 
✔ Understanding changing CRA compliance standards 
✔ Regular communication with clients 

With the right accounting systems in place, CRA letters become rare and manageable — not stressful. 

Why Alberta Business Owners Trust Beatific Accounting 

At Beatific Accounting, we specialize in helping Alberta businesses reduce risk and optimize financial performance. Our approach is: 

• Proactive, not reactive 

• Systematic, not sporadic 

• CRA-ready, not stressful 

We serve businesses across industries — from print and retail to professional services, hospitality, and contractors. Our goal is the same: keep our clients compliant and financially confident. 

Closing Thought 

A CRA letter doesn’t have to be a warning sign of failure. 
In fact, most are signs that a business needs stronger accounting systems — systems that guide decision-making, protect from unnecessary risk, and unlock better financial outcomes. 

Proper accounting doesn’t just prevent CRA issues — it elevates your business.