Introduction

The purpose of this guide is to help you understand why we gather your receipts, how we follow up with missing information and what happens if you lose a receipt. Plus, we’ll let you know what our commitment is to you when it comes to protecting your time (hint: we won’t ask you the same question twice) and what we expect from you.

Why We Gather Receipts

We gather your receipts in order to be compliant with Canadian Tax Law. You are required to provide evidence of your expenses if the CRA requests it. If you’re not able to provide the requested information, you could lose out on those deductions.  Keeping receipts helps you pay only your fair share of tax.

Digital receipts are the best method for evidence as we can attach them directly to transactions within Xero. If you are ever audited by CRA, we will be able to efficiently respond to the audit requests without (in many cases) an auditor needing to visit your business premises.

Digital Receipts

Digital receipts are sufficient evidence for your expenses. You do not need to keep a hard copy of your receipts. Once you capture your receipt with Dext, you can safely recycle it. We use Dext to capture your receipts and then we publish those receipts to Xero, your accounting software, so each transaction has the required evidence in case of audit. Bank and credit card statements are not sufficient supporting documents.

Catch-up Bookkeeping and Documentation

We understand with the nature of catch-up bookkeeping, it is not always possible to have documentation or receipts for transactions from the catch-up period. The process of digitizing a backlog of receipts can be extremely satisfying, but it is also time intensive and tedious! So we won’t require or request you to upload receipts from the catch-up period if you would rather retain your paper copies. In these instances, we will use our best judgment to categorize your expenses and purchases appropriately. For larger dollar transactions, or any purchases we are unfamiliar with - we will always request documentation or clarification from you in order to ensure amounts are categorized correctly. 

Receipt Exceptions

We don’t always follow up on receipts. Here are a few examples where we don’t usually follow up.

• Well-known suppliers where the receipts would be easy to gather in case of audit, such as recurring software fees
• Bank or transaction fees
• Utilities and internet/telephone bills that are recurring in nature

If you would like us to follow up on every receipt, please let us know!

Business Accounts

We work under the assumption that all transactions within your business bank and credit accounts are related to the business, and are not personal in nature.

If there are personal transactions within your business accounts, we rely on you to let us know so that we can categorize it accordingly.

Our Follow Up Policy

Each month, as part of our bookkeeping process, we will follow up with you about missing receipts or unknown transactions. It is really important for you to respond to these questions in a prompt manner so that we can learn about your suppliers and maintain proper records for your transactions. 

We will follow up with you about receipts twice. If we have not received a response from you by the end of the third week in the month, we will proceed in the following manner:

1. If the receipt is for less than $30, we will claim the expense and associated GST/HST based on our knowledge of the supplier (if known).
2. If the receipt is greater than $30, but less than $250, we will claim the expense, but NOT the GST/HST. You will miss out on input tax credits for these transactions.
3. If the receipt is greater than $250, we will leave the item as unreconciled and carry-forward our question to the following month. This will impact your reports as you will have unreconciled transactions in your account.

We will allow for exceptions to the above for your year-end or if the transaction will materially affect a tax filing. We will inform you if this is the case and will expect a prompt response to resolve the issue in these cases.

Responses From You

When we follow up on missing receipts or unknown transactions, you will usually need to respond in a few ways:

1. “Receipt Forwarded to Dext” - you may have missed uploading the receipt, but have now done so, please just let us know so we can go look for it in Dext.
2. “Receipt Lost” - that’s okay! We can still claim the expense, although it may be disallowed on audit if we can not find a replacement. We’ll let you know if it’s worth following up with your supplier now or later.
3. “This expense was for… “ It won’t always be clear what your purchase was for. If you let us know the account you want it to go to or just the nature of the transaction, that will help us (plus we’ll know for next time). You may also have to let us know if it was a personal transaction.

Our Commitment to You

1. We understand that you are busy and can’t always respond to our questions right away. We will follow up in a courteous manner.
2. We endeavour to not ask you the same question twice - we will build knowledge of your transactions over time and will reach out to the Internet and our colleagues before asking you. Rest assured that the questions on your list are for information only you can provide.

Your Commitment to Us

1. You will respond to our questions in a timely manner.
2. You will understand that we make mistakes sometimes.

Here’s one of the best ways to reduce your monthly questions: if you know an expense will be new to us or will not be apparent or obvious for us to code, please make a note on your receipt or send us a quick message via email. Future you will thank you.

Our Escalation Policy

Our commitment to you is to keep your records up to date, but we need your help to do so. If we have questions that are not answered over 3 months, we will begin our escalation process.

1. We will contact you to let you know that we are not receiving the information we need to provide you with the services you are paying for. We will ask you if there is a better way to contact you and gather the information from you.
2. We will follow up with you 3 times to resolve the issue.
3. Hopefully this resolves the issue, but if we continue to experience non-responsiveness, we reserve the right to withdraw from our engagement with you.

Our escalation process is a last resort. The purpose is to open communication, identify the issue and provide mutually beneficial outcomes. We will always approach the issue in a collaborative manner.

Summary

As with most things, communication is key. We want you to run a thriving business and we’ll make it very clear about what we need from you to keep everything running smoothly. If you are having issues keeping up with everything, let us know! We want the system to work for you.