Income and Expense Records Explained

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You are required by law to keep records of all your transactions to be able to support your business income and expense claims.

A record is defined as:

  • an account

  • an agreement

  • a book

  • a chart or table

  • a diagram

  • a form

  • an image

  • an invoice

  • a letter

  • a map

  • a memorandum

  • a plan

  • a return

  • a statement

  • a telegram

  • a voucher, or

  • any other proof containing information, whether in writing or in any other form.

In this article we will discuss two types of records:

1) Income Records

2) Expense Records

Income Records

It’s important to keep track of the gross income that your business earns. Gross income is defined as the total income before deducting expenses, including those related to goods sold.

Your income records must include the date, amount and source of income.

Original Documents are:

  • Sales invoices

  • Cash register tapes

  • Receipts

  • Bank deposit slips

  • Fee statements

  • Contracts

Expense Records

Always get receipts or other vouchers when you buy something for your business.

Receipts must show the following:

  • The date of the purchase

  • The name and address of the seller or supplier

  • The name and address of the buyer

  • The full description of the goods and/or services

  • The vendors business number if they are a GST/HST registrant