Financial statements for Victoria companies

Who asks for statements in Victoria, and why

Very few private companies prepare year-end statements because they want to read them. They prepare them because a public-sector procurement process wants evidence of financial capacity, a surety is setting bonding limits, a bank is renewing a facility, or a landlord is assessing a covenant on a commercial lease. Each of those readers is looking for something different, and the request often arrives worded as “audited financials” when the requester would accept far less. Establishing what is genuinely required before commissioning anything is the single largest cost saving available in this whole area, because the three levels of assurance differ substantially in price.

Compilation, review or audit

A compilation engagement produces statements from information you supply, accompanied by a CPA communication that states plainly that no assurance is provided. A review engagement gives limited assurance based on enquiry and analysis. An audit gives reasonable assurance and involves testing, confirmations and substantially more work. For an owner-managed Canadian private company with no outside investors and no statutory requirement, a compilation is the normal and appropriate choice. Moving up a level should be a response to a genuine requirement, not to an adjective in an email. Which one you actually need works through it.

Prequalifying for public-sector work

Ministries, health authorities, municipalities and Crown corporations run prequalification processes that frequently include a financial capacity test, and Victoria has more suppliers going through them than anywhere else in the province. What the evaluator is usually testing is whether the business can carry the working capital demands of the contract — paying staff and suppliers for months before invoices are settled. That makes the current ratio, the level of shareholder loans and the treatment of deferred revenue far more consequential than the profit figure. A set of statements that is technically correct but presents owner loans confusingly can lose a prequalification that the underlying business would comfortably have passed.

Bonding, for construction and marine contractors

Surety companies set bonding capacity largely from working capital and shareholder equity, and they read statements more carefully than most lenders. Equipment carried at a depreciated value far below what it would sell for, retained earnings reduced by an aggressive dividend policy, and holdback receivable presented as an ordinary receivable all affect the numbers a surety works from. None of those are errors, but each has a presentation consequence, and a contractor whose bonding capacity is limiting the size of work they can bid should have the year end prepared with that reader in mind. Contractor accounting in Victoria covers the rest of that picture.

What a lender reads first

A credit adjudicator goes to working capital, debt service coverage and the quality of the receivables before anything else, and then to the notes. Shareholder loans are the recurring point of friction: money the owner has left in the business strengthens the position if it is properly documented and postponed, and weakens it if it is ambiguous. Deferred revenue is the other, because a balance sheet carrying customer deposits as though they were earned profit does not survive a second reading. Lender readiness sets out what to have in order before the conversation.

The statements and the T2 come from one set of numbers

Schedules 100, 125 and 141 of the corporate return are built from the same trial balance as the statements, which is why having one person prepare both removes a whole category of reconciliation work and inconsistency. Where a company uses one firm for statements and another for tax, the differences surface late, usually in the week the return is due. The year end is one job with two outputs. Corporate tax in Victoria covers the return itself, and bookkeeping in Victoria covers the ledger both are built on.

Remote, from one office in Abbotsford

EverStone is a sole practitioner CPA firm working from a single office at 32615 South Fraser Way in Abbotsford. There is no Victoria office. The year-end file is assembled from the books and the supporting documents through a secure portal, the draft statements are walked through with you on a call before anything is finalised, and the signed set is delivered electronically in a form you can forward to whoever asked for it. Nothing in preparing a set of statements requires being on the same side of the strait.

If the statements exist because someone is assessing the business, the forward numbers usually matter as much as the historical ones — a forecast that gets updated is where that starts.

For fractional CFO in Victoria, where the statements feed a bid or a facility, the scope and the fixed-fee approach are the same.

Companies that also want payroll in Victoria and personal tax in Victoria can have both quoted together.