Do you know the rules of what needs to be on the invoices or receipts you receive to make sure that your ITCs are not just rejected and you need to pay your whole GST or HST without the ITCs?

check book calculator and pen against a white background

Are you making sure that your invoices and receipts match the rules so your customers can use the ITCs that they are expecting?

I took a training with a CRA GST auditor and the sufficient documentation rules are not what I expected. Most businesses will have their ITCs rejected. So what do you need to do to make sure your ITCs are not rejected in a GST audit?

Over $150 receipt or invoice you need:

Vendor name (this one is usually there but I have seen a few missing)
Date – almost always there
Total amount paid – always there
The terms of payment – normally there
Vendors GST number – watch for this one – it is frequently missing.
Description of items
- This means the breakdown – not the short credit card receipt.
- Meals make sure you have both – the detail and the credit card
- Suppliers – do not take a picture of your credit card receipt covering part of your detail receipt – take 2 pictures
Detailed what is GST applicable
- For example
  - at a grocery store they show how the GST is applied
  - at a gas station there is GST on convenience store items and a separate area that shows the GST on Gas – make sure you have both sections in your picture
- Purchasers Name or trading name
  - This is the one that is almost always missing – is your business name on the receipt
    - If you went to staples and bought a printer it is not on there – that receipt WILL BE rejected in a GST audit.
    - If you order staples printer online and the invoice says your business name you are fine.
  - Note – it being on your Bank or credit card statement does not matter. It needs to be on the invoice or receipt from the VENDOR.
  - It can not be written on – it needs to be part of the original
  - Check that your name was not short formed
    - Your business is Onyxfire online bookkeeping – but they only put Onyxfire get it fixed
- Looking at most receipts from major retailers – the ITCs will be rejected by CRA statndards – so even if you have a receipt the GST ITCs will not stand up in an audit.

Over $30 but under $150

Vendor name (this one is usually there but I have seen a few missing)
Date – almost always there
Total amount paid – always there
Vendors GST number – watch for this one – it is frequently missing.
Description of items
- This means the breakdown – not the short credit card receipt.
- Meals make sure you have both – the detail and the credit card
- Suppliers – do not take a picture of your credit card receipt covering part of your detail receipt – take 2 pictures
Detailed what is GST applicable and GST amount

Under $30

Vendor name (this one is usually there but I have seen a few missing)
Date – almost always there
Total amount paid and total GST

So how can you help your customers?

Make sure that you have all the items needed including their business name on the invoice or detail receipt.
If an employee is being reimbursed for a purchase make sure that the BUSINESS name is on the receipt – not the employee only. Check who the receipt is for ultimately. If the employee puts their name and then hands it in for reimbursement then the business name needs to be on the receipt/ invoice
Offer to email the invoice directly to them and their bookkeeping software for larger/ more frequent customers.
1. Should it go to the owner and Hubdoc or expensify?
2. Make it easier for them to get it into their system – and maybe for you to get paid faster.
Check that you have
1. Your business name
2. Date
3. GST #
4. Items
5. Terms
6. Details with descriptions as needed
  1. GST applicable per line if you have different tax rates or codes
7. Total amount due/ paid
8. Because its important – Customer name
9. NOTE – this is required by the GST regulations

How to protect yourself.

Check receipts for your business name (over $150)
1. If it is missing – ask them to get you a copy with your business name – it can not just be written on afterward – it needs to be part of the original document
2. For businesses like Staples – order online and check the invoice has your name for bigger purchases so that you do not have to get it in the store
  1. Even though it is legally required it is harder to get from chain stores that do not provide it automatically
3. Check for Name, date, GST #, terms, Items …
4. Make sure you take clear pictures for Hubdoc, Autoentry, expensify… whatever your receipt capture program is.
  1. Detail receipts separate from Credit card receipts – Side by side is fine as long as it is clear.
5. For subcontractors or smaller companies
  1. Check the GST number they gave you is valid – same as you check WCB you need to check GST at time of payment. Apparently people are handing out fake GST numbers or signing up for GST and then cancelling it so that they have a number but it is no longer valid. https://www.businessregistration-inscriptionentreprise.gc.ca/ebci/brom/registry/pub/reg_01_Ld.action

For more information talk to your bookkeeper/ accountant or

check the CRA GST documentation

https://www.businessregistration-inscriptionentreprise.gc.ca/ebci/brom/registry/pub/reg_01_Ld.action

this part is under Collecting the GST/HST and then Informing your customer.

Let us help you make sure you are compliant and let us know if you would like to us to check your invoices/ receipts for compliance and a plan of action if wanted.