Can books and records be kept in electronic format?
Yes, but remember
- Electronic records are subject to the same rules and retention periods as hard copy or paper books and records.
- Books and records that are created and maintained in electronic format must be kept in an electronically readable format, even if the charity has paper printouts of the electronic records. An electronically readable format means information supported by a system capable of producing an accessible and useable copy that would allow auditors to process and analyze the electronic records on the CRA’s equipment.
- If any source documents are initially created, transmitted, or received electronically, they must be kept in an electronically readable format.
Scanned images of paper documents, records, or books of account that are maintained in electronic format are acceptable if proper imaging practices are followed and documented.
Books and records maintained outside Canada but accessible electronically in Canada do not meet the requirement of being kept in Canada. See paragraph 9 of the Electronic Record Keeping Information Circular at www.canada.ca/en/revenue-agency/services/forms-publications/publications/ic05-1r1.html for additional information.
I’m a church treasurer and the offering counters are asking if they need to save the offering envelopes. Are church offering envelopes considered a record?
Yes. When the offering envelopes help verify donations, they are considered a record and must be kept for six years following the end of the fiscal period for which they were issued.
On the other hand, if the individual donations are recorded from the envelopes directly into a ledger of some type, you do not need to keep the envelopes.
Starting in 2016 (and including church offering envelopes for the 2015 tax year), church offering envelopes (when used as a source document) need to be kept for six years from the end of the tax year to which the envelope relates. Previously these envelopes were only required to be kept for two years.
More information on CRA’s policies regarding books and records for Canadian registered charities can be found here.
Does a charity need to keep more than one copy of its books and records?
No, but it may be smart to do so. In the event of a fire or other disaster that destroys the charity’s books and records, a second set would be very useful. The Canada Revenue Agency may be able to help a charity re-establish itself after such a disaster by giving them copies of documents they hold on file. This can only partly replace what may have been lost.
It may, therefore, be prudent to keep duplicates of key documents at a separate location. Storing data electronically can also increase the chances of retrieving information, as long as a regular back-up system is in place and the back-ups are kept in a safe place.