Data is critical for calibration, verification, validation, and assessment of both short-term and long-term analytics to help a business uncover valuable insights within their financials, identify process improvements that can increase efficiency, and better manage risk. Without adequate data to verify and assess an owner cannot make suitable decisions about their business.
Let’s first talk about what pieces of information are needed then we get into how we receive that data.
Every transaction that occurs within your day-to-day existence, for which there is a dollar value available, is part of the accounting equation and generates some paper trail called a source document. The source document is an essential part of the process as it is evidence that a financial transaction has occurred but more importantly, it plays a major role if an audit was to happen.
Now that I have brought up the dreadful word AUDIT! Let’s talk about what the CRA requires for sufficient documentation for ITC’s under $100.00. They would want to see Vendor’s or intermediary’s business/trading name, Date GST/HST paid or payable and the total amount paid or Payable. For documentation from $100.00 - $499.00 they would want to see the same as under $100.00 plus items subject to GST/HST or the total amount of GST/ HST number and for items over $500.00 they would want all over the above plus Purchaser’s name or trade name, description of supplies & terms of payment.
Now for how we receive the source documents. Luckily paper receipts are now becoming a thing of the past. I am sure most of you are now using digital capture and storage of invoices, receipts, and bank statements. Technology makes it easy for the client to capture documents and upload them to the cloud and makes it even easier for the person looking after the books to retrieve these documents or have a team member access the client's documents from the office or from home if that is where they work. Nowadays even most businesses tend to send receipts electronically. Here are a few receipt scanner apps that may help your business. AutoEntry, Zoho Expense, QuickBooks Online, Dext Prepare, Neat & Receipt Bot.
In closing the next time your client asks or gives you a hard time, maybe you will want to educate them on the importance of the data we need from them or at the very least give them something to think about if they don’t give us the correct documents.