Acceptable Electronic
Record Keeping for CRA
More and more businesses are moving toward a paperless
environment and it is increasingly easy to do so with a cloud storage solution
which is proving to be cheaper and safer than ever before. But are you in
compliance with the Canada Revenue Agency?
Highlights of CRA’s rules regarding record-keeping are as
follows:
·
It is ultimately the taxpayer’s responsibility
to produce the records for inspection regardless of where the records are
located.
·
The records must be in sufficient detail to
allow the CRA to properly determine and verify income.
·
Where the taxpayer is employing the services of
a cloud based accounting software, it is important to document the data entry
procedures, reports produced and to describe any features that alter standard
reports or create new ones. Note that the use of a third party to keep his
records does not relieve the taxpayer of his responsibility to produce his
records for the CRA.
·
Taxpayers who keep electronic records are still required
to retain source documents such as invoices, receipts, written contracts and
agreements, credit card statements, cheques, bank statements and tax returns.
·
In the event a taxpayer’s records are lost or
destroyed, this event must be reported to the CRA and the records recreated in
a reasonable time.
·
Failure to keep proper records can result in
fines and penalties so if in doubt contact the CRA for clarification.
The Accounting Practice
Cloud based Accounting
