From the report back to the receipt
Every number on a financial statement should be traceable. A sales total comes from entries in the general ledger, those entries come from invoices and payments, and those invoices and bank deposits are the source documents. The audit trail is that path. If you can follow it in either direction, the number can be checked.
Accounting software adds a second layer, often called a change log or activity history. It records who created or edited an entry and when. That helps when an old transaction has been altered or deleted, which is hard to spot from the final balance alone.
An illustrative example
Suppose a $600 expense for equipment repairs shows in your records. A good trail lets you open the ledger entry, see the date and supplier, open the attached invoice, and match the payment to a line on the bank statement. If a month later someone changes the amount to $650, the change log shows who did it and when. Without that history, you would see only the new figure.
The amounts are illustrative and leave out sales tax.
Keeping the trail intact
The Canada Revenue Agency requires records that support the income and expenses you claim, and says original documents should support your entries. Receipts should show the date, the seller, the buyer and a description of what was bought. Records are generally kept for six years from the end of the last tax year they relate to, and for a corporation the tax year is its fiscal period. Records on property acquisitions and disposals must be kept longer.
A trail breaks in ordinary ways. An invoice number is missing from the entry, a receipt sits in someone’s email, or a wrong entry is deleted instead of reversed. Give each entry a reference, attach or link the document, correct mistakes with a reversing entry so the original stays visible, and lock closed periods. Records that began in electronic form stay electronic and readable, and scanned paper must be an accurate reproduction. The related terms on source documents and electronic records cover those rules in detail.
What to discuss with your accountant
Ask where source documents are stored, how they link to ledger entries, and who can edit or delete past transactions. Check that your software keeps its activity history and that you can export it, and that backups can be restored in a usable form.
If you change software, ask what happens to the old file and its history before the old subscription ends.
Sources & editorial notes
Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.
- Business recordsCanada Revenue Agency
- Where and how long to keep recordsCanada Revenue Agency
- Acceptable format, imaging paper documents and backing up electronic filesCanada Revenue Agency
Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.