PART 4

EXPENSE REPORTS:
KEEP IT REAL (To KEEP
IT DEDUCTIBLE).

TIP #31: RECEIPTS MATTER.

Proof of an expense requires a receipt, an explanation for the

expense and proof of payment. Never (ever) trust your memory.
When it comes to the Canada Revenue Agency, the best offense begins with
a great defense. Since few novice investors really understand what they
need to do when it comes to documenting receipts, we’ll walk you through
the process of documenting a restaurant meal with your banker.
First, get the receipt from the restaurant. It identifies the number of
people and the type of food ordered, plus the date and time. Now write on
that receipt the name of the person with whom you dined, as well as the
purpose of the meeting. It can be a PR meeting, no problem. Put that receipt
into the appropriate file or envelope, and then staple your credit card
statement to the file along with a copy of the cheque paid to the credit card
company or the bank receipt.
The biggest mistake investors make is when they do not put detailed
notes on receipts. When you make a purchase, make sure you document
what it’s for. Also include notes for your bookkeeper/document filer,
instructing her as to where the receipt should be filed and how you want
him or her to create a report. To speed up the filing process, only keep
relevant receipts. You do not want to pay someone to sort through your
business and personal receipts!
Also, remember that the CRA can ask you to sort out your receipts and
provide proof of your deductions. They will not do your bookkeeping for