Understanding CARM Financial StatementsThe Canada Border Services Agency (CBSA) Assessment and Revenue Management (otherwise know as CARM) is a large multi-year project which started in 2016 with the Accounts Receivable Ledger (ARL). With release 2 of CARM, changes will be made to ARL.
What Is ARL?
ARL changed the way importers or their customs brokers were able to see import accounting records. The monthly K84 was replaced with a Statement of Account (SOA) for both importers and third-party service providers.
CBSA under ARL combined multiple transaction types into one statement with Daily Notices (DN) and monthly SOAs. This change enabled account-level management and reconciliation which assisted importers to manage payment due dates.
Importers are eligible to receive their own DNs and SOAs electronically. The Importer simply needs to apply to the CBSA Technical Commercial Unit (TCCU).
What Is Changing With Release 2?
In CARM Release 2, which is scheduled for Spring 2022, there will be changes with the ARL Financial Statements to include:
- SOAs and DNs will be issued to importers/account holders as a PDF on the CARM Client Portal Profile (CCP) and to EDI certified account holders via EDI in XML format.
- The customs broker will have the ability to view their client’s transaction information on the CCP if this work is assigned to them and they have been delegated access.
- SOAs will be issued to importers who have incurred a financial transaction with the CBSA on their account. SOAs will summarize the transactions posted on the Importers account in CARM and for which the importer is liable to make payments.
- The SOA will no longer be transaction based and will instead be account based to provide a summary of all transactions recorded in the billing period.
- Summarized amounts per transaction type included in the SOA:
- Payments received
- Disbursements issued
- Interest and penalties
- New debit items
- New credit items
- Revenue breakdown for declaration based transactions, including customs duties, excise duties, excise tax, SIMA, GST/HST and PST.
- The SOA will be generated and posted to the CCP on the 25th of month 2 for all types:.
- The Importer and customs broker (with delegated access) will have the ability to view the SOA on the CCP as well as receive a copy via EDI if opted.
- CARM will notify the importer and authorized customs broker when the SOA is available.
- The Customs Broker Summary Statement (CBSS) will replace the Customs Broker SOA and will include accounting summaries for all importers which the Customs Broker has submitted import declarations. The CBSS will NOT provide details on the payment amount due and due date as this will only be displayed on the importer’s account. The CBSS will provide a summarized view (count and amount) of import declarations and payment transactions per importer made in the billing period:
- New declarations (count and amount)
- Corrections submitted (count and amount)
- Adjustments submitted (count and amount)
- Adjustments submitted (count and amount)
- No account balance or payment requirements.
- Customs brokers will not be required to pay for any debt associated with import declarations submitted on behalf of an importer’s BN15. Customs brokers will not be responsible to settle the account balance or payment balance for import declarations submitted on behalf of the clients/importers.
- Although CBSA will be expecting payment of the Commercial Accounting Declaration (CAD) from the BN owner on the declaration, a customs broker can still choose to make payment on behalf of their client. The authorized customs broker will need to access the importer’s CCP account to determine the payment amount. Any payment that the customs broker makes on behalf of the importer will be applied to the importer’s account balance and not to individual transactions. For example, the CBSA will use payment allocation rules which means the oldest transactions on the importer’s account will be paid first.
- The Importer/Account Holder is responsible for paying any balances owing on their account.
It is important to stay on top of CARM. If you have any questions, please do not hesitate to reach out for assistance. We are here to help.
Changes to Financial Statements and CBSA Payments Under CARM
Under CARM, CBSA is going to change how financial information is communicated to importers. It is important to know how and where to find your financial statements to keep on top of your taxes and duties owing and avoid penalties.
It is important to note that customs brokers will only have access to their clients’ financial information through CARM if their clients assign this ability to them through their client portal. A Business Account Manager (BAM) for the importer’s CARM Client Portal (CCP) will need to delegate access both to other employees of the importer and third parties outside the company, such as customs brokers. Designating your customs broker as a Program Account Manager (PAM) will empower them to access information about your financial statements, security, and payments. For more information about assigning user roles in the CCP, see our resource guide.
Financial Statements
The current system of financial statements is called the Accounts Receivable Ledger. The ARL was introduced in 2016. Under the ARL, customs brokers are issued Daily Notices (DN) and monthly statements of account (SOA). Under CARM, DNs and SOAs will be issued directly to the importer through the CCP. Customs brokers who have been authorized by their importers will have access to this information, and will also be issued with Customs Broker Summary Statements (CBSS).
The SOA will be generated and posted to the CCP on the 25th of the month for transactions in the previous month. CARM will send a notification to the importer and any authorized customs brokers when the SOA becomes available. By receiving statements directly from CBSA, importers will have increased and easier access to all their financial information in one place, such as itemized revenue breakdowns showing their duty, tax and SIMA payments per month.
The CBSS will contain accounting summaries for all of the broker’s clients for whom they brokered imports in the previous month. These summaries will not include specific information about the payment amounts or due dates for individual importers, as that information is only available through the importers’ own CCPs.
Payments to CBSA
Currently, many customs brokers pay duties and taxes on behalf of their importers. This will change with the introduction of CARM. After CARM Release 2, importers will be responsible for remitting any payables directly to CBSA. However, if your broker has authorization through the CCP, they can still make payments on your behalf through your CCP.
Payment can be made by electronic funds transfer (EFT), electronic data interchange (EDI) payment, credit card, or pre-authorized debit (PAD). CBSA will no longer be accepting payment by cash or cheque.
By Robin Smith, M.A., CCS
– Robin is a trade industry professional based in Victoria, BC.
The Canada Border Services Agency (CBSA) Assessment and Revenue Management (otherwise know as CARM) is a large multi-year project which started in 2016 with the Accounts Receivable Ledger (ARL). With release 2 of CARM, changes will be made to ARL.
What Is ARL?
ARL changed the way importers or their customs brokers were able to see import accounting records. The monthly K84 was replaced with a Statement of Account (SOA) for both importers and third-party service providers.
CBSA under ARL combined multiple transaction types into one statement with Daily Notices (DN) and monthly SOAs. This change enabled account-level management and reconciliation which assisted importers to manage payment due dates.
Importers are eligible to receive their own DNs and SOAs electronically. The Importer simply needs to apply to the CBSA Technical Commercial Unit (TCCU).
What Is Changing With Release 2?
In CARM Release 2, which is scheduled for Spring 2022, there will be changes with the ARL Financial Statements to include:
- SOAs and DNs will be issued to importers/account holders as a PDF on the CARM Client Portal Profile (CCP) and to EDI certified account holders via EDI in XML format.
- The customs broker will have the ability to view their client’s transaction information on the CCP if this work is assigned to them and they have been delegated access.
- SOAs will be issued to importers who have incurred a financial transaction with the CBSA on their account. SOAs will summarize the transactions posted on the Importers account in CARM and for which the importer is liable to make payments.
- The SOA will no longer be transaction based and will instead be account based to provide a summary of all transactions recorded in the billing period.
- Summarized amounts per transaction type included in the SOA:
- Payments received
- Disbursements issued
- Interest and penalties
- New debit items
- New credit items
- Revenue breakdown for declaration based transactions, including customs duties, excise duties, excise tax, SIMA, GST/HST and PST.
- The SOA will be generated and posted to the CCP on the 25th of month 2 for all types:.
- The Importer and customs broker (with delegated access) will have the ability to view the SOA on the CCP as well as receive a copy via EDI if opted.
- CARM will notify the importer and authorized customs broker when the SOA is available.
- The Customs Broker Summary Statement (CBSS) will replace the Customs Broker SOA and will include accounting summaries for all importers which the Customs Broker has submitted import declarations. The CBSS will NOT provide details on the payment amount due and due date as this will only be displayed on the importer’s account. The CBSS will provide a summarized view (count and amount) of import declarations and payment transactions per importer made in the billing period:
- New declarations (count and amount)
- Corrections submitted (count and amount)
- Adjustments submitted (count and amount)
- Adjustments submitted (count and amount)
- No account balance or payment requirements.
- Customs brokers will not be required to pay for any debt associated with import declarations submitted on behalf of an importer’s BN15. Customs brokers will not be responsible to settle the account balance or payment balance for import declarations submitted on behalf of the clients/importers.
- Although CBSA will be expecting payment of the Commercial Accounting Declaration (CAD) from the BN owner on the declaration, a customs broker can still choose to make payment on behalf of their client. The authorized customs broker will need to access the importer’s CCP account to determine the payment amount. Any payment that the customs broker makes on behalf of the importer will be applied to the importer’s account balance and not to individual transactions. For example, the CBSA will use payment allocation rules which means the oldest transactions on the importer’s account will be paid first.
- The Importer/Account Holder is responsible for paying any balances owing on their account.
It is important to stay on top of CARM. If you have any questions, please do not hesitate to reach out for assistance. We are here to help.
Changes to Financial Statements and CBSA Payments Under CARM
Under CARM, CBSA is going to change how financial information is communicated to importers. It is important to know how and where to find your financial statements to keep on top of your taxes and duties owing and avoid penalties.
It is important to note that customs brokers will only have access to their clients’ financial information through CARM if their clients assign this ability to them through their client portal. A Business Account Manager (BAM) for the importer’s CARM Client Portal (CCP) will need to delegate access both to other employees of the importer and third parties outside the company, such as customs brokers. Designating your customs broker as a Program Account Manager (PAM) will empower them to access information about your financial statements, security, and payments. For more information about assigning user roles in the CCP, see our resource guide.
Financial Statements
The current system of financial statements is called the Accounts Receivable Ledger. The ARL was introduced in 2016. Under the ARL, customs brokers are issued Daily Notices (DN) and monthly statements of account (SOA). Under CARM, DNs and SOAs will be issued directly to the importer through the CCP. Customs brokers who have been authorized by their importers will have access to this information, and will also be issued with Customs Broker Summary Statements (CBSS).
The SOA will be generated and posted to the CCP on the 25th of the month for transactions in the previous month. CARM will send a notification to the importer and any authorized customs brokers when the SOA becomes available. By receiving statements directly from CBSA, importers will have increased and easier access to all their financial information in one place, such as itemized revenue breakdowns showing their duty, tax and SIMA payments per month.
The CBSS will contain accounting summaries for all of the broker’s clients for whom they brokered imports in the previous month. These summaries will not include specific information about the payment amounts or due dates for individual importers, as that information is only available through the importers’ own CCPs.
Payments to CBSA
Currently, many customs brokers pay duties and taxes on behalf of their importers. This will change with the introduction of CARM. After CARM Release 2, importers will be responsible for remitting any payables directly to CBSA. However, if your broker has authorization through the CCP, they can still make payments on your behalf through your CCP.
Payment can be made by electronic funds transfer (EFT), electronic data interchange (EDI) payment, credit card, or pre-authorized debit (PAD). CBSA will no longer be accepting payment by cash or cheque.
By Robin Smith, M.A., CCS
– Robin is a trade industry professional based in Victoria, BC.
