We get asked the question “do I need to keep my receipts?” at least once a month or more. The answer is yes you should.
Receipts for the CRA
According to the CRA website each expense that goes through your business must have documentation that provides the following:
- date of the purchase
- name and address of the seller or supplier
- name and address of the buyer
- full description of the goods or services
- vendor’s business number if they are a GST/HST registrant
While your credit card statement can provide the date and name of supplier and most CRA agents would accept that “Frank’s Woolly Blankets in Surrey” is selling woolly blankets in Surrey; most will not accept your statement as proof of GST paid.
Clearly, based on the above list you need to keep your receipts; otherwise you are leaving the 3 of the 5 requirements listed up to the discretion of your CRA reviewer. If you’re already paying a professional bookkeeper to help you keep your financial house in order, why would you leave anything to chance to or the whims of a CRA auditor?
Who Else Might Want My Receipts?
Receipts also make dealing with that glitchy phone a whole lot easier. If you are in the habit of keeping your receipts then when that new phone or computer you bought starts having issues in it’s 11th month you will have what you need to get warranty support or exchange / return the item.
So Why is it So Hard???
How many times have you pulled out a receipt and it’s just a blank piece of paper because the ink has faded? How many times have you just given up claiming all of your expenses because you just can’t handle sorting one more piece of paper? The answer is likely ALL THE TIME! Perhaps looking for a system that would make this process simpler is more than overdue.
Keeping Receipts Going Paperless – This is NOT a Joke
In the 80’s we were promised that the advent of computers would mean less work hours and a paperless office. HAHAHAHAHAHA Actually the paperless office is pretty close to a reality – even for us bookkeeping firms. At It’s Your Time we provide a Receipt Bank account at no cost to our bookkeeping clients. This handy little app allows our clients to take a picture of their Prado receipt and then toss it (or better yet – ask the cashier to print only their copy – take a picture and return it). It can fetch bills from larger suppliers and you can easily email in bills from smaller ones. Going paperless with an app like Receipt Bank reduces work on your part because you no longer have to keep track of bits of paper or have that “bookkeeper” folio on their desk anymore; it also eliminates the risk of the faded receipt.
What Does the CRA Think of Electronic Receipts?
The biggest concern from clients when we move them to Receipt Bank is will the CRA find these records acceptable. Not only will CRA accept these electronic records, if all of your receipts are stored in your bookkeeping platform then the time required to go through a GST Review or an audit will be greatly reduced – no more digging in boxes with your fingers crossed that you have everything. Just click on that London Drugs transaction in your books and there’s the receipt.
Oh and that London Drugs receipt you need for returning your computer – no problem – you can just print it off before going to the store.
Resources
We are clearly fans of Receipt Bank at It’s Your Time but it can run a little expensive for individuals wanting to purchase for their own use. Another option is Hubdoc which charges a flat monthly fee. Alternatively if you’re doing your own bookkeeping and don’t need the bells and whistles like fetch etc. then your QuickBooks Online phone app will also let you take a picture of your receipts (you will also have to code the receipt in that moment – no click and go for you).
If you would like to learn more about how you can go paperless or simply improve your workflow reach out a book some time to chat.