This month’s tip is about the value of having backup for both sales invoices and vendor invoices.
The value of having backup, that would be vendor invoices and receipts, can save you from over paying HST. In this case it was by the thousands.
The file showed an amount owing of $9000.00 for HST in the quarter to be filed. The client paid a common vendor $12000.00 but did not provide the invoice as backup. The client could not provide a copy. As a result, with the client’s permission, the vendor was called directly. There were an additional 5 invoices that were issued that the client did not send. Although the invoices were not paid, they were for that quarter. This explains why the client could not find the invoice that reflected the payment for $12000.00. As a result of picking up the extra invoices, his amount owing decreased from $9000.00 to $330.04!
Although this example is using supplier invoices, the same applies with sales invoices. Ensure you provide details of your deposits including sales invoices if applicable. It is important to note when a deposit is not from a sale.