Bookkeeper's Guide - Creating an Audit Trail - Fintech-solutions

Bookkeeper’s Guide – Creating an Audit Trail

Income Tax Brackets – T1(Personal) – 2021
May 8, 2021
Corporate Tax – Active Income vs. Passive Income
May 26, 2021

Keep ALL Your Receipts for an Audit Trail

legitimate business receipt for CRA purposes must contain:

  1. Sales under $30
    • Name of the business
    • Their address
    • Their phone number
    • The transaction date
    • The total amount of the transaction
  2. Sales between $30 and $150
    • All of the above plus
    • An indication that you have paid the amount shown
    • An indication of which items are taxable and which rate
    • Their GST/HST number, if they are registered
  3. Sales $150 and more
    • All of the above plus
    • Buyer’s name
    • A description of your purchase

Although the above list shows the invoice/receipt doesn’t need a description unless the purchase is over $150, the auditor could still ask you to prove it was a business expense.

For example, sometimes till receipts do not have a description of your purchase. In these instances, write on the back what the purchase was for. The auditor needs to know it was related to your business … and I guarantee you won’t have clue come audit time if you haven’t followed this habit.

CRA does allow some exceptions to invoice requirements

The consequences of not having receipts for an audit are simple … no receipt – no deduction.

What is NOT a Legitimate Receipt for Tax Purposes

A question often asked is, “Are credit card statements valid receipts?”. The short answer is no …

Let’s look at why a credit card statement is not the same as a receipt.

Let’s say you purchased gas for your vehicle on your credit card. It shows up on your statement. How can CRA have a problem with that?

Hmmm, have you ever bought candy bars, chips, smokes, lotto tickets when paying for your gas? Was the gas for your car … or your spouse’s vehicle?

You can see that just having an expense from a gas station on your credit card statement does not mean you purchased only gas for your vehicle … and therefore a credit card receipt is not an acceptable audit trail to determine if gas was purchased for your business trip. But hold on … don’t throw it out!

What’s important here is to not confuse proof of payment with a valid receipt which shows proof of purchase … you NEED BOTH for an adequate audit trail!

This means that your credit card slips and debit card slips are not valid receipts on their own. They only show payment of the amount … which is only one item on the list of criteria … so don’t throw them away! Each payment slip should be attached to the actual receipt.

Some cash register receipts show what you purchased and how you paid for it on the same receipt. I really love the businesses that have this system in place.

 

Common Audit Triggers

The CRA selects returns to audit based on a range of factors such as the likelihood for errors related to certain credits or deductions you have claimed. The agency also compares returns to previous years or to similar companies or lines of business as per your industry (SIC) code. They also randomly check people so you could also fall into that pile.

If you file a return and claim unusually more or less deductions or credits than you have in previous years, your return may be flagged for an audit.

Similarly, excessive home office claims, writing off 100% of your vehicle expenses for business or claiming significantly less income than your neighbors, or claiming recurring losses from rental or self-employment may also trigger the audit process.

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    Harsh is an excellent Teacher. He made the workshop thoroughly enjoyable and very informative. I took away alot of information that will help me further my career. I recommend this workshop to anyone interested in Quickbooks.

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    Harsh effective way of teaching which keeps you attentive throughout 6 hours long session is incredible. He is very knowledgable person in Quickbooks.

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    I did the May 2018 Workshop. Harsh is a super teacher, the pace and material is just perfect. Absolutely spot on.

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    6. Was the workshop above or below your current skill level?

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    I enjoyed the hands on and the collaboration of the group. We each brought something different to the table that was helpful and made for a pleasant learning experience.

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    6. Was the workshop above or below your current skill level?

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    7. What did you like best or find most useful about the workshop?

    Our program director did a very good job keeping everyone engaged, ensured there was great interaction, sections of the material being covered did not continue until everyone was comfortable moving on.

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    6. Was the workshop above or below your current skill level?

    Just Right


    7. What did you like best or find most useful about the workshop?

    I found Harsh to be very knowledgeable. His manner of teaching was very engaging. Although I have experience with QuickBooks I still was able to take away new skills and learn different features of the program that I was not using beforehand.

    pop up review6

    1. How would you rate the usefulness of the content?


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    6. Was the workshop above or below your current skill level?

    Above


    7. What did you like best or find most useful about the workshop?

    Harsh is an excellent Teacher. He made the workshop thoroughly enjoyable and very informative. I took away alot of information that will help me further my career. I recommend this workshop to anyone interested in Quickbooks.

    pop up review7

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


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    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Just Right


    7. What did you like best or find most useful about the workshop?

    Harsh effective way of teaching which keeps you attentive throughout 6 hours long session is incredible. He is very knowledgable person in Quickbooks.

    pop up review8

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    6. Was the workshop above or below your current skill level?

    Just Right


    7. What did you like best or find most useful about the workshop?

    I did the May 2018 Workshop. Harsh is a super teacher, the pace and material is just perfect. Absolutely spot on.

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    6. Was the workshop above or below your current skill level?

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    7. What did you like best or find most useful about the workshop?

    The most useful things were the practice of entering information ourselves and also learning about the full capabilities of Quickbooks.

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    2. How would you rate the hands-on activities?



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    6. Was the workshop above or below your current skill level?

    Just Right


    7. What did you like best or find most useful about the workshop?

    I enjoyed the hands on and the collaboration of the group. We each brought something different to the table that was helpful and made for a pleasant learning experience.

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    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


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    5. How would you rate the pace of the presentation?


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    Hands on approach and discussion with other participants.

    pop up review4

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


    4. How would you rate the presenter’s style of teaching?


    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Above


    7. What did you like best or find most useful about the workshop?

    Our program director did a very good job keeping everyone engaged, ensured there was great interaction, sections of the material being covered did not continue until everyone was comfortable moving on.

    pop up review5

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


    4. How would you rate the presenter’s style of teaching?


    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Just Right


    7. What did you like best or find most useful about the workshop?

    I found Harsh to be very knowledgeable. His manner of teaching was very engaging. Although I have experience with QuickBooks I still was able to take away new skills and learn different features of the program that I was not using beforehand.

    pop up review6

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


    4. How would you rate the presenter’s style of teaching?


    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Above


    7. What did you like best or find most useful about the workshop?

    Harsh is an excellent Teacher. He made the workshop thoroughly enjoyable and very informative. I took away alot of information that will help me further my career. I recommend this workshop to anyone interested in Quickbooks.

    pop up review7

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


    4. How would you rate the presenter’s style of teaching?


    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Just Right


    7. What did you like best or find most useful about the workshop?

    Harsh effective way of teaching which keeps you attentive throughout 6 hours long session is incredible. He is very knowledgable person in Quickbooks.

    pop up review8

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


    4. How would you rate the presenter’s style of teaching?


    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Just Right


    7. What did you like best or find most useful about the workshop?

    I did the May 2018 Workshop. Harsh is a super teacher, the pace and material is just perfect. Absolutely spot on.

    pop up review9

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


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    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

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    2. How would you rate the hands-on activities?



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    5. How would you rate the pace of the presentation?



    6. Was the workshop above or below your current skill level?

    Above


    7. What did you like best or find most useful about the workshop?

    The most useful things were the practice of entering information ourselves and also learning about the full capabilities of Quickbooks.

    Pop up review

    1. How would you rate the usefulness of the content?



    2. How would you rate the hands-on activities?



    3. How would you rate the presenter’s knowledge in the subject?




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  • Workshop Review

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    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Just Right


    7. What did you like best or find most useful about the workshop?

    I enjoyed the hands on and the collaboration of the group. We each brought something different to the table that was helpful and made for a pleasant learning experience.

    pop up review3

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


    4. How would you rate the presenter’s style of teaching?


    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Just Right


    7. What did you like best or find most useful about the workshop?

    Hands on approach and discussion with other participants.

    pop up review4

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


    4. How would you rate the presenter’s style of teaching?


    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Above


    7. What did you like best or find most useful about the workshop?

    Our program director did a very good job keeping everyone engaged, ensured there was great interaction, sections of the material being covered did not continue until everyone was comfortable moving on.

    pop up review5

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


    4. How would you rate the presenter’s style of teaching?


    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Just Right


    7. What did you like best or find most useful about the workshop?

    I found Harsh to be very knowledgeable. His manner of teaching was very engaging. Although I have experience with QuickBooks I still was able to take away new skills and learn different features of the program that I was not using beforehand.

    pop up review6

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


    4. How would you rate the presenter’s style of teaching?


    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Above


    7. What did you like best or find most useful about the workshop?

    Harsh is an excellent Teacher. He made the workshop thoroughly enjoyable and very informative. I took away alot of information that will help me further my career. I recommend this workshop to anyone interested in Quickbooks.

    pop up review7

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


    4. How would you rate the presenter’s style of teaching?


    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Just Right


    7. What did you like best or find most useful about the workshop?

    Harsh effective way of teaching which keeps you attentive throughout 6 hours long session is incredible. He is very knowledgable person in Quickbooks.

    pop up review8

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


    4. How would you rate the presenter’s style of teaching?


    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Just Right


    7. What did you like best or find most useful about the workshop?

    I did the May 2018 Workshop. Harsh is a super teacher, the pace and material is just perfect. Absolutely spot on.

    pop up review9

    1. How would you rate the usefulness of the content?


    2. How would you rate the hands-on activities?


    3. How would you rate the presenter’s knowledge in the subject?


    4. How would you rate the presenter’s style of teaching?


    5. How would you rate the pace of the presentation?


    6. Was the workshop above or below your current skill level?

    Just Right

    pop up review

    1. How would you rate the usefulness of the content?



    2. How would you rate the hands-on activities?



    3. How would you rate the presenter’s knowledge in the subject?



    4. How would you rate the presenter’s style of teaching?



    5. How would you rate the pace of the presentation?



    6. Was the workshop above or below your current skill level?

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    2. How would you rate the hands-on activities?



    3. How would you rate the presenter’s knowledge in the subject?



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    5. How would you rate the pace of the presentation?



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    Pop up review

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    2. How would you rate the hands-on activities?



    3. How would you rate the presenter’s knowledge in the subject?



    4. How would you rate the presenter’s style of teaching?



    5. How would you rate the pace of the presentation?



    6. Was the workshop above or below your current skill level?

    Above


    7. What did you like best or find most useful about the workshop?

    The most useful things were the practice of entering information ourselves and also learning about the full capabilities of Quickbooks.

    Pop up review

    1. How would you rate the usefulness of the content?



    2. How would you rate the hands-on activities?



    3. How would you rate the presenter’s knowledge in the subject?




    4. How would you rate the presenter’s style of teaching?



    5. How would you rate the pace of the presentation?



    6. Was the workshop above or below your current skill level?

    Above


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