Which document supports which entry
Think of a source document as the evidence behind a line in the books. A sales invoice or contract supports income. A purchase receipt or supplier bill supports an expense. A bank statement or deposit slip supports a cash movement. Payroll entries rely on records such as hours worked, amounts withheld and Form TD1.
A bank statement shows that money moved but not why. Pair it with the invoice or receipt that explains the purpose.
An illustrative example
A business pays $300 for supplies. The supplier invoice, the card statement line and a note about the job are three pieces of the same story. The entry records the expense and the payment. If the CRA later asks about the cost, the invoice shows what was bought and from whom, and the statement shows it was paid.
Without the invoice, the card line alone does not show whether the purchase was for the business. The amount is illustrative and ignores sales tax.
What a receipt should show
The CRA says business receipts should show the date, the name and address of the seller and the buyer, and a full description of the goods or services. For GST/HST registrants, the vendor’s business number is expected when the price is $100 or more before tax. If a cash register tape lacks a description, write one on it or in your expense journal.
If you claim input tax credits, you must keep your purchase invoices or receipts, which must include specific information.
Format, location and retention
Paper documents can be kept as accurate electronic images if they follow CRA conditions, while records created electronically must stay in a readable electronic form. The CRA generally expects records and supporting documents to be 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 are kept at your place of business or residence in Canada unless the CRA gives written permission otherwise.
Electronic records should let someone follow the audit trail from the supporting document to the summarized accounts. Ask your accountant how receipts are captured, who matches them to entries, and how to scan and store them. Inactive corporations and holding companies still have to keep records.
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
- GST/HST and payroll recordsCanada Revenue Agency
- Review of business systems and keeping audit trails of business transactionsCanada 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.