Avoid Fearing a CRA Audit: Get Your Business Records Audit-Ready

For many small-business owners, the thought of a CRA audit causes immediate anxiety.

It is not always because they have done something wrong. Often, it is because they are unsure whether the records they have kept will be enough to support the expenses claimed on their tax return.

You may have receipts stored in envelopes, boxes, email accounts and online shopping profiles. You may even have accurate bookkeeping records. But if the Canada Revenue Agency asks you to prove an expense, will you be able to quickly find the receipt and explain how the purchase relates to your business?

That is where many business owners struggle.

Bookkeeping Records Are Only Part of the Picture

Most bookkeeping resources explain how to categorize income and expenses. They may tell you that advertising belongs under advertising or that office supplies belong under office expenses.

What they often do not explain is how to create an organized record book containing the receipts, invoices, notes and other supporting documents behind those numbers.

A bookkeeping entry tells you what was recorded. Supporting documentation helps prove that the expense was actually incurred and that it had a legitimate business purpose.

Good records should help answer questions such as:

• What was purchased?

• When was it purchased?

• Who was it purchased from?

• How was it paid?

• Why was it needed for the business?

• Where is the supporting receipt or invoice?

If those answers are scattered among several different places—or were never recorded at all—responding to a CRA review or audit can become stressful and time-consuming.

A Practical Record-Keeping System for Canadian Businesses

I wrote CRA Audit Ready™ to fill in the gaps that many traditional bookkeeping books leave behind.

This book shows Canadian small-business owners how to organize their receipts and supporting documents into a practical record book. The goal is to help you create records that make sense, are easier to maintain and can be used to support the amounts reported on your tax return.

The book covers general business expenses and includes guidance for several types of self-employment and income-producing activities, including:

• Rental properties

• Day homes

• Farming

• Fishing

• Trucking

• Other small businesses and self-employed activities

It also explains the importance of preserving special records and completing an annual review of your documentation.

Being Audit-Ready Does Not Mean Expecting an Audit

Preparing good records does not mean that you expect CRA to audit you. It means you are protecting yourself and your business in case questions are ever asked.

It can also make tax preparation easier. When your documents are properly organized, you are less likely to overlook expenses, lose important receipts or spend hours searching for information at tax time.

Strong record-keeping gives you something every business owner deserves: greater confidence in the numbers being reported.

Get Your Copy of CRA Audit Ready™

If your receipts are sitting in a box—or if you have bookkeeping records but are unsure whether your supporting documents are truly organized—CRA Audit Ready™ can help you build a better system.

The book was written specifically with Canadian small-business owners in mind and is available now on Amazon.

Purchase CRA Audit Ready™ on Amazon CRA Audit Ready™: Build a Clear Paper Trail Behind Your Tax Return: The Official Course Workbook: McArthur, Miss Tammy: 9798188891077: Books - Amazon.ca

Being audit-ready starts long before CRA contacts you. It starts with creating organized, complete and understandable records today.

This book provides general educational information and is not substitute for advice based on your individual tax or legal circumstances.