So many times I have heard different things from different people about accounting advisors telling them whether or not their receipts are necessary.
FBZ takes the solid stance that yes, back up documentation in relation to your business expenses are very necessary; regardless of whether or not there is record of it on a bank or credit card statement. The reasons are simple.
In the event of an audit, the auditor will be looking for those receipts to see if it is a genuine business expenditure. In the past, Credit Card statements were allowed. However, from their standpoint, if you go to a gas station and fill your vehicle up with gas and then proceed to purchase cigarettes, gum or food, that is not a justifiable expense or write off in their eyes. If your business is HST registered, they are looking for the HST registration number printed on your business expense to ensure that you are claiming the correct ITC(Input Tax Credit) amounts and not overstating.
Likewise in accounting and bookkeeping, we are looking at your receipts to ensure that the correct amount is applied in your books. If the receipt is missing especially for something like a restaurant, the HST amount we take off could be different than what is on the receipt!
So protect yourself! Make sure that you keep all business related receipts as is required or your expense will be disallowed, give your receipts monthly to your bookkeeper so that they can ensure they are putting it the correct amount!