If your business isn’t keeping accurate records of all expenses, you’re missing out on a huge tax savings! Business expenses can be used to minimize your taxes owing at the end of the year.
Here are 4 common questions we get asked about tracking business expenses:
- What information do I need on receipts? Make sure your receipts contain the date of purchase, name and address of the seller and buyer, full description of the goods or services, and the vendor’s business number if they charge you GST or HST.
- What if I only have a register tape receipt? Some vendors don’t provide all this information on their receipts, in that case, take whatever receipt you get (even if it’s just a cash register tape receipt) and write in all the missing information on the back.
- Is a shoebox of receipts good enough? We don’t recommend the shoebox-method of expense receipt record keeping. Make sure you set aside time every day or week to enter your expenses into a spreadsheet or your accounting software. After they’re recorded, you can store them in a shoebox if you feel so inclined, but your accountant would prefer they be organized by date or expense type to make them easier to find in case of an audit.
- Is buying property an expense? Yes! Be sure to record who sold you the property, the price you paid, and the date you bought it. You’ll need this to calculate your capital cost allowances.
Once you get your bookkeeping system in place, entering your receipts will become second nature. If you have all your expenses in order before handing them over to your accounting team, they’ll surely thank you for it.
If you have any questions about tracking your business expenses, our accounting team at Dayna Holland and Associates can help. Contact us to learn more about how we can help you become financially independent.