Electronic banking is a time saver and we have no problem recommending that Canadian small business owners use online banking. However, the bank statements must still be downloaded and kept somewhere.
When you get that email saying your bank statement is ready for download this should inspire you to take action. The statements can be printed out – that still works as a filing method. Alternatively the bank statements can be downloaded and saved as a file on your computer. If you have a bookkeeper you can share the computer file. Someone should also be looking at the bank statements. If that someone is not going to be you, then make sure your bookkeeper looks at them promptly! Banks won’t fix mistakes that are more than 30 days ago.
Now that many business owners are receiving their bank statements electronically we see more cases where when it is time for us to do year-end income taxes and/or HST, the business owner does not have the bank statements.
Bank statements are an excellent source of information about a business and Canada Revenue Agency will want to see them if you are audited. Generally, CRA audits three years at a time – If you have to request additional copies of bank statements from your bank for prior years there is often a fee.
Avoid additional bank fees and know what is going on in your bank account by downloading your electronic bank statements and saving them either on paper or on a computer file that gets back up regularly.