How Long Does My Business Have To Keep Records In Canada?
As experienced accountants, we get asked this question all the time: how long does my business have to keep records in Canada? Here’s the answer.
In a recent survey, 24% entrepreneurs admit to spending at least 120 work hours on their taxes alone. That is a startling amount of time spent on tax preparation alone. Moreover, it’s time that is not spent doing other things that drive revenue into the business. However, the good news is, with proper organization and planning, you can drastically cut down on the number of hours you spend preparing taxes. Then, you can use that time more productively to draw more revenue into your business.
Keep for 1 Month
- Bank withdraw or deposit slips (only throw away if they are reconciled)
- Receipts from monthly transactions (expenses)
Keep for 1 Year
- Monthly Broker/Mutual Fund Statements (reconcile these with your own files then SHRED)
- Monthly Mortgage Statements (reconcile the statements you receive with the files your company keeps then SHRED)
- Pay Stubs (reconcile with the company T4 and SHRED)
- Utility Bills (keep all utility bills for the current tax year)
- Monthly Bank Statements
- Monthly Credit Card Statements
Keep For 6 Years
- Monthly Bank Statements (if the owner of the business)
- Monthly Credit Card Statements (if the owner of the business)
- Utility Bills (i.e. internet, cable, phone, etc. – if the owner of the business)
- Tax Returns (this is far back as Canada checks in their tax system keep the forms on hand to prove you have been filing taxes faithfully)
- All 4T Forms (proves your payroll expenses for that same period of time)
- Annual Mortgage Statements
- Receipts & Statements From Tax Returns (further proof that you have filed and paid your taxes on time)
NEVER Throw Away
- Auto Records (keep long as you own the company vehicle)
- Company Investment Records
- Employee Pension Plan Records (same with other benefit records for yourself and employees)
- Real Estate Paperwork For Business Properties
Our final tips on how to best keep records in Canada? Make sure you copy as much as you can and keep it stored in the cloud. For hard copies, be sure to store all vital documentation in a cool, dry place, organized so you can easily pull the correct documentation in the future. If you need something from these files, inevitably you need it in a hurry.
For more information on keeping all of your financial paperwork in order for your small business please feel free to contact us.