Monday’s= Small Business
Do you know that if you keep your records electronically that Canada Revenue Agency (CRA) has to be able to search these records electronically?
What this means is that they will ask you to provide a copy of your records and the software to run them. This is a higher standard for computer users. A business that only keeps paper records does not need to provide electronic copies!
If you are using a software package to maintain your accounting records then you have to be able to give CRA a backup of your records including the software that they can run. If you change accounting software programs you still have to have a copy of the program available to you. This is not a big problem if you are using a program that was resident on your computer. It is a problem if you were using cloud based software and you no longer have the subscription to this software.
You know that you are required to keep your receipts for 6 years after you file the returns for that year. You also have to have access to your accounting records for this same time period.
When you sign up for any software, find out about the backup and storage requirements. If you use a cloud based software package for a year and then switch, you might have to pay the monthly fee for the next six years so that you have electronic access to these records.
This would be expensive.
When you are comparing accounting software, consider the issue of maintaining your records for the time period CRA requires and the costs of retaining records for that time period. It is possible that an accounting program where you actually buy the software would be cheaper than the monthly subscription plan.
No comments yet.