Business Satisfaction with PD7A

Prepared for the:
Canada Revenue Agency
February 2012
Contract # 46558-129146/001/CY
POR 007-11

Prepared by:
Sage Research Corporation

Media Enquiries:
Media Relations
Canada Revenue Agency
4th Floor 555 MacKenzie Avenue
Ottawa ON  K1A 0L5
media.relations@cra-arc.gc.ca


Executive Summary

The Statement of Account for Current Source Deductions (PD7A) is a form that reports the Payroll Remittances – Accounting and Collections balance and includes a remittance voucher to be returned by the employer with his next payment.  The PD7A form is issued by the Canada Revenue Agency (CRA) to eligible regular, quarterly, and accelerated remitters.
The CRA issues 11.5 million of these forms to 1.6 million remitters annually.  In 2009, the cost for issuing the PD7A including paper, envelopes, salaries, and postage was approximately $7.6 million.  Costs have been steadily rising over the past several years.

The overall purpose of the research was to get the opinions of business people from small and medium size enterprises on the potential reduction of the mailing frequency of the PD7As, and the potential impact of this reduction on compliance.  Additional objectives included:

Six focus groups were conducted between September 22 and October 4, 2011, in Quebec City, Toronto and Calgary.  All participants were from small to medium size enterprises, defined as businesses with 1 to 50 employees, including sole proprietors. The qualified participant was the most senior person directly involved in processing payroll deductions and remittances, including handling of the PD7A.  It is important to note that this research was qualitative in nature, not quantitative.  As such, the results provide an indication of participants’ views about the topics explored, but cannot be statistically generalized to the full population.

The project cost was $42,664.11 (HST excluded).

Study Findings

Current Uses of the PD7A

Participants described how they currently use the PD7A, including their usual method of payment.  The following summarizes key findings and implications:

Process Finding Implications for the CRA
Use of the PD7A, including payment, is highly routinized:  the process is well-defined, well-entrenched, simple, and it works well. "Inertia" is a significant obstacle to businesses choosing to go paperless (i.e., to stopping mail delivery of the PD7A and paying electronically).  To get businesses to go paperless, it will be necessary to reach out and inform them of how to go paperless and point out possible advantages.
Just over half the participants the participants viewed the arrival of the PD7A in the mail as having an important "reminder" function that a payment has to be made. Businesses interested in going paperless should be offered the option of receiving some sort of reminder when a payment deadline is coming up.
Process Finding (cont.) Implications for the CRA
Most participants check the financial information on the PD7A, usually to verify whether their last payment was received. Businesses need to be provided an alternative way to access the financial information on the PD7A – a function which is served by My Business Account and the E-PD7A.
Most participants retain the paper PD7A in their files after payment, and consider it to be part of their accounting filing system.  Uses include preparation of the year-end T4 return, and documentation in case of a disagreement with the CRA over payment, or an audit. Businesses may need information on record-keeping requirements and best practices if they don’t receive a paper version.
About two-thirds of participants make their payments using the paper remittance voucher, while the balance pay online.  Somewhat over half of participants use online banking, but a substantial minority do not use online banking at all. Conversion to going paperless will be more challenging for businesses that do not use online banking, because they need to make more changes to internal processes than do businesses that already use online banking, and particularly those already making online payments to the CRA.
Participants who paid by mail (a minority of the focus group participants) used the return envelope that comes with the PD7A.  All the rest of the participants received the envelope but had no use for it. Offer businesses that do not routinely pay by mail the option of discontinuing the return envelope.

My Business Account Website

Navigation:  Participants were given two navigation exercises:

Participant suggestions:  Many participants suggested that a "print" capability should be added to the two web pages giving financial information – Account balance and transactions, and Account transactions.  This was because they anticipated including paper copies of the information in their accounting files.  Some suggested that to truly "go paperless" on the business side, the information should be available as a PDF document or a download.

With regard to this last point, it is worth noting that some participants commented that the use of the phrase "go paperless" (used by the moderator and on the My Business Account website) is one-sided:  it is the CRA that is eliminating paper, not necessarily the business.

Overall reaction to the payroll financial information on My Business Account:  There was widespread positive reaction to the type and quantity of payroll financial information on My Business Account.  It was widely agreed the information is a more than adequate replacement for businesses that choose to stop receiving the PD7A.  This was reassuring and attractive to participants interested in potentially stopping delivery of the PD7A, but for some others it was not enough to convince them to stop receiving the PD7A.  To put this another way, the financial information on My Business Account satisfies a necessary condition for stopping the PD7A (i.e., access to the financial information on the PD7A), but it may not be a sufficient condition for persuading a business to stop the PD7A.

Reactions to the E-PD7A

Overall, about half the participants said that if they were to go paperless, they would also want to receive the E-PD7A in addition to any access they might arrange to My Business Account.  They wanted the E-PD7A not so much for the content but rather because it allows arranging an email or text message reminder.  Most felt that My Business Account gave them the financial information they might want, but what the E-PD7A adds is the ability to set up a reminder.

Several participants questioned why the ability to request a reminder is contingent on using epost.  They suggested the ability to request a reminder should be on My Business Account.

Interest in Going Paperless

The final section of the focus group was a discussion of participants’ interest in "going paperless" – which was defined as both stopping delivery of the PD7A and paying electronically.  This discussion occurred after discussion of their current processes and payment methods, and after participants had seen the information available on My Business Account and learned about the E-PD7A.

Overall, slightly fewer than half the participants expressed interest in going paperless, a relatively small proportion were indifferent, and the rest favoured the status quo of continuing the PD7A.   The following broad factors were at work in terms of driving this outcome on interest in going paperless:

Overall, conversion to going paperless will be easiest among businesspeople who are technologically oriented and who already are using online banking – and particularly those already making online payments to the CRA.  Conversion will be toughest among businesspeople who are not technologically oriented and who are not using online banking.

Participants were asked "If you went paperless, do you think this might increase the risk of sometimes not making your source deduction payments on time, or not really? "Overall, just under half the participants felt that "going paperless" could increase this risk.  Those who perceived increased risk attributed this to the absence of the reminder function served by the PD7A arriving in the mail.  This result emphasizes the importance of offering businesses considering going paperless the option of receiving some sort of reminder of upcoming payment deadlines.

Page details

Date modified: