VESMA Bookkeeping

4 TIPS for KEEPING YOUR RECEIPTS FOR CRA AUDIT 1.Digital copy versus physical copy of receipts. Usually people hate paperwork. It take a lot of time to organiz...e it, valuable time which we could spend playing with our kids, watching movies, or just have a nice cup of coffee with your friends. Besides, we need space to keep it somewhere. The best solution is to scan your receipts to computer, meaning digitize them. For years, Canada Revenue Agency (CRA) did not accept the digital copies of receipts. Recently they changed their rules. Now they do allow taxpayers to keep all receipts in digital format within Canada, provided that the digital copies of the receipts are legible. Truthfully, some of my client’s physical copies of receipts actually faded over half a year. Having a digital copy of these receipts are actually a lot more accurate than guessing what was written on the physical copies of the receipts. 2. Credit card statements are NOT sufficient. You are more than welcome to summarize all your expenses using credit card statements. Let’s face it. How often do you pay for your expenses by cash? When almost every Credit card has its perks: Cash back, Points Collection, Discounts, Additional Insurance etc. paying by cash is a dinosaur habit. Most of my clients and me, we pay for all our expenses using a credit card, except for places where you have to pay by cash (and I hate them with all my heart). It’s handy to use them to summarize your expenses, but they are not proper record in the eyes of CRA. 3. Remedies if you lost your receipts. We are all human beings. We make mistakes and we misplace some receipts. In a perfect world, the answer is to go back to the vendor, and ask for a duplicate copy of the receipts. Unfortunately, this is not always feasible. Now what? Let’s hope that you don’t get selected for an audit. If you do, the next best thing you can provide to the auditors is your credit card statements or bank statements that you show the transactions. It sounds like it is a contradiction with a tip number 2??? But because we are unable to find the receipts, having the backup credit card statements or bank statements are your best shot. It doesn’t mean that CRA is going to agree on it. Depending on the nature of the audit, the amount of the deductions and the documentation you’ve provided for the other expenses, they may allow it as an exception. If they still don’t, at least you’ve given your best shot. As for the misplaced receipts that you paid by cash, you may just have to lose the deductions. 4. Keep up your records on a regular basis. The best thing to do, to give your Bookkeeper all receipts once a month or at least quarterly. A digital copy is fine. Yes, the kijiji receipts are available in your inbox anytime. But to find the particular receipts 5 years from now when you get audited, it is a lot harder than making sure that receipt is in place on an annual basis. Some of the free email service providers only provide storage service with a limited time period. We are required to keep our records for 7 years. Are you sure you are going to use this email account for 7 years from now??? ***Cherry Chan, CPA, CA, 5 Tips to help yourself keep proper records for Canada Revenue Agency. HTTP://REALESTATETAXTIPS.CA/5-TIPS-TO-HELP-YOURSELF-KEEP-P/

If you have any questions about Bookkeeping, do not hesitate to contact me. I can be reached out at 613-407-8720. Looking forward to hearing from you soon.

Tax season not that far away. What you need to know regarding Employment Expenses. Employment conditions: To deduct the expenses you paid to earn commission inc...ome, you have to meet all of the following conditions: 1. Under your contract of employment, you had to pay your own expenses. Note You are not considered to have paid your own motor vehicle expenses if your employer reimburses you or you refuse a reimbursement or reasonable allowance from your employer. 2. You were normally required to work away from your employer’s place of business. 3. You were paid in whole or in part by commissions or similar amounts. These payments were based on the volume of sales made or the contracts negotiated. 4. You did not receive a non-taxable allowance for travelling expenses. Generally, an allowance is non-taxable as long as it is a reasonable amount. For example, an allowance for the use of a motor vehicle is usually non-taxable when it is based solely on a reasonable per-kilometre rate. 5. You keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed and signed by your employer. For more information, see Interpretation Bulletin IT-522, Vehicle, Travel and Sales Expenses of Employees. See more

TOP FIVE REASONS A BOOKKEEPER IS IMPORTANT FOR YOUR BUSINESS When it comes to running your business, the easiest mistake you can make is to underestimate the im...portance of good bookkeeping. Bookkeeping is the accurate and organized maintenance of a business’s accounts and other financial document. The records that must be kept cover tax remittance forms, worker’s compensation forms, pension contribution forms, and other government documents. They can be kept in either paper or electronic format. Most importantly, the financial records should completely account for the business’s daily income and expenses. Here are the top five reasons why investing in a bookkeeper will be key to the success of your growing business: 1. Business Performance Periodic financial reports on your firm will reveal the ‘health’ status of your business. Key measures, such as margin, return on investment, and revenue growth can indicate how your business is performing. Insights can be revealed only if the records are organized, accurate, and up-to-date. 2. Tax Laws The Canada Revenue Agency requires a complete account of all records and supporting documents to be kept for a minimum of six years from the end of the last tax year to which they pertain. With the complexity of tax laws and their constant revision, businesses run the risk of improper record keeping. A bookkeeper will have the up-to-date skills to assemble all the necessary documentation in that is required by the government. 3. Keeping up with Technology While both paper and electronic formats are acceptable ways of keeping records, the use of accounting software can significantly increase the efficiency with which your business maintains records. A bookkeeper can help transfer paper documentation into electronic format, which can lead to better organization and increased speed in your financial reporting. A bookkeeper can also show you how to use the applicable software, which is a relevant skill in today’s marketplace. 4. Obtaining Financing Holding records in the right format will be critical if you are planning on securing financing from a lending institution. When applying for a loan or a grant, institutions want to see a prepared and sensible proposal. A bookkeeper can produce a comprehensive set of financials that will increase your business’s reputation and likelihood of obtaining the financing. 5. Long Term Success Good record-keeping is a must because you will be in the informed position to make reasonable forecasts for your firm’s performance. Financial reports can reveal strengths in your business operations, as well as indicate points of weakness where your firm can improve. The only way to have an idea about your firm’s future performance is founded in its past and current performance. Most importantly, once a bookkeeper gets to know your business, they become a valuable resource to your business beyond their bookkeeping function, because they can provide you with insights and guidance that is tailored to your firm’s situation. So, whether you are a small start-up business or you are well along the track of growth, a bookkeeper is an important element in the organization of accounts and records that you will surely need to succeed. See more