Updated on February 19, 2024
Many companies are slow to change their payment methods. However, this is a major issue affecting their productivity.
The sooner your organization embraces this transformation, the sooner you will gain productivity and be equipped against threats to your data security. However, with so many available solutions, a clear strategy is needed.
Cheques, an outdated payment method
Even today, many organizations still issue cheques as payment. However, this method is expensive. According to some studies by Payments Canada, it costs between $15 and $20 to issue a single cheque. Furthermore, according to the Association for Financial Professionals (AFP), cheque fraud accounted for 66% of total fraud in 2021.
Despite the facts and studies on the subject, organizations continue to operate with this archaic payment method, under the false impression that any change would be too complex to implement.
Efficient strategy to avoid risk
Other companies have gone electronic, but without a clear enterprise-wide strategy. The result is redundant payment solutions and multiple, sometimes incompatible, processes within the same organization. This approach creates confusion, puts data security at risk and fosters fraud.
Additionally, the lack of interaction between the different systems requires numerous manual processes that hinder controls and productivity and increase the possibility of errors.
Optimized processes that will make you less vulnerable
In this situation, your company’s maturity is determined by how it complies with industry best practices in terms of payments and payment security.
To assess it, you need to analyze your processes and determine your vulnerabilities by asking yourself these important questions:
- Is the use of cheques still predominant in your company?
- Do you operate with manual processes and controls?
- Are there several payment solution providers, including banks, in your organization?
- Do you have processes in place for payments to providers, payroll and others?
- Is it easy to trace back the complete cycle of a specific payment (reason for payment, approval, issue, receipt, reconciliation)?
- How long would it take to detect a case of fraud?
- Do you have any measures to protect your providers’ banking data?
A technological solution for implementing best practices
For payment digitization, optimization and automation, the payment factory is simply the most recommended solution for most businesses.
A payment factory is a technological solution that meets all the abovementioned challenges. It allows for:
Centralization
A payment center is the bridge between the different systems and the financial institutions. It centralizes the processing of payments from the various internal systems.
Increased controls
The payment factory allows for flexibility in approval models and potential fraud detection. For example: three or more levels of approvals for payments with a non-standard value, or additional authorization for a first payment to a new provider.
Automation
The payment factory makes it possible to automate several steps in the payment cycle. For example: the payment notification to the beneficiary or reconciling payments by posting accounting entries.
Integration
Interfacing between different systems and financial institutions is key. It eliminates manual data entry, optimizes the entire process and helps achieve the desired efficiency. It also ensures increased security when information flows from one system to another.
As a technological solution, a payment factory would be the foundation for future payment solutions such as Interac for Business, real-time payments and many others.
In short, the payment factory will allow you to eliminate or reduce your vulnerabilities, as well as accelerate your business processes so that you can spend more time on profitable business activities.
03 Feb 2023 | Written by :
Louis-Étienne Bérubé is a management consulting expert at Raymond Chabot Grant Thornton.
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The Grant Thornton International IFRS team has published the 2023 edition of Navigating the changes to International Financial Reporting Standards: A briefing for preparers of IFRS financial statements. The publication is designed to give preparers a high-level awareness of recent changes that will affect companies’ future financial reporting.
This publication covers both new standards and interpretations that have been issued as well as amendments made to existing ones, giving a brief description of each. The 2023 edition of the publication has been updated to include changes to International Financial Reporting Standards (IFRS) that have been published between January 1, 2022 and December 31, 2022.
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As at December 31, 2022, there were eleven countries around the world whose economies were considered hyperinflationary. Entities whose functional currency is the currency of one of these countries and that have December 31, 2022, reporting requirements have to reflect the requirements of IAS 29, Financial Reporting in Hyperinflationary Economies, in their IFRS financial statements.
Recent IFRIC decisions relating to hyperinflation
The IFRS Interpretations Committee (IFRIC) recently considered a number of accounting issues in relation to hyperinflation. They included:
- translating a hyperinflationary foreign operation and presenting exchange differences;
- accounting for cumulative exchange differences before a foreign operation becomes hyperinflationary;
- presenting comparative amounts when a foreign operation first becomes hyperinflationary.
We encourage careful consideration of not only the IAS 29 issues noted above but also an issue they considered earlier this year, which was how to consolidate a non-hyperinflationary subsidiary by a hyperinflationary parent.
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Updated on February 19, 2024
As winter approaches, many dream of buying a property by the sea in Florida or a golf course in Arizona. But what happens at the time of death?
Owning real estate in the United States requires proper estate planning to avoid unpleasant surprises, hassles and excessive costs for the estate.
The first common error is assuming that the will is the final authority and that the property will automatically pass to the beneficiaries. This is not always the case.
A will drawn up and notarized in Canada is valid in the United States. It is not necessary to make one specifically for the U.S. However, U.S. laws stipulate that on the death of the Canadian owner of a residence in the United States, the will notarized in Canada must be probated by the U.S. authorities. This process must be completed before the property can be transferred to the estate.
Probating the will: high costs and delays
Even though it is a simple formality, this process involves significant costs, based on a certain percentage of the value of the estate or an hourly rate. In addition, the time needed to obtain probate can be quite long, ranging from six to twelve months.
If the will is not in English, it will also have to be translated, which will cause further delays and additional costs. It would be helpful to file an English version of your will here in Canada.
How can I avoid probate?
There are, however, legal instruments or ways of holding a residence in the U.S. that make it possible to avoid probate of a will in that country. This makes it easier to transfer property to the estate.
Joint Tenancy With a Right of Survivorship
In estate law, Joint Tenancy With a Right of Survivorship allows a couple, for example, to share a property with the same equal right to retain or dispose of the property. Simply put, the surviving spouse automatically inherits the property without having to go through the probate process.
Lady Bird Deed and Life Estate
A Lady Bird Deed and Life Estate are tools that facilitate the transfer of the deceased’s property to the heirs while ensuring that the use, control and ownership of the property are maintained during the deceased’s lifetime.
Revocable trust
Lastly, setting up a revocable trust to transfer ownership also allows beneficiaries to avoid the inconvenience of probate proceedings. However, it is important to be careful when using such a vehicle. In some cases, the trust may be subject to the 21-year deemed disposition rule. If so, it could be deemed to have sold and reacquired the property after that time. The accrued gains would then be taxed, even if the property is not sold. While a revocable trust may be useful in some cases, it’s not always appropriate.
Better safe than sorry
In all cases, it is important to ensure that the will provisions do not conflict with the legal status chosen to ensure the transfer of property.
Anyone wishing to purchase property in the United States would be well advised to plan such an acquisition carefully in order to facilitate the transfer of title to the heirs, and at a lower cost.
25 Jan 2023 | Written by :
Mr. Jean-François Poulin is a partner at Raymond Chabot Grant Thornton. He is your expert in...
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