Day to Day Operations of a Business: Paying for Expenses

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As a business owner, you will typically pay for expenses by cash, cheque, debit card or credit card. And if you do pay for an expense, ensure that you get a receipt or invoice. This is extremely important as your bank or credit card statements may not withstand a CRA audit. In the event that your business is selected for an audit, they will typically require you to provide receipts and invoices with details.

Another important thing to remember when paying for business expenses is to pay for them separately from your personal expenses. Keeping your business and personal expenses paid separately will not only ensure accurate records but will also save you a lot of time and money on your bookkeeping and corporate year end. One of the simplest ways to do this is to have a business debit or credit card and a personal debit or credit card with you at all times. Having both cards within reach at all times will ensure that you will be able to pay expenses with the right card – whether it is for business or personal.

Also, always let your business pay for its own expenses even when the company does not have funds to pay. One way to do this is to personal write a cheque or transfer funds to the company and let the business pay for the expense. Remember, this is a shareholder loan!

Have any questions on paying your business expenses? Contact KD today and let our experts help you with your business!
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