Expense receipts record keeping mandatory?

[TheRoadAhead]

I was wondering how HK accountants / IRD regards companies with business expenses.

I understand that client invoices are a must in the service industry, but what about expenses (cost of goods sold, software tools etc.)? Is having an invoice or receipt for all these expenses mandatory even if we can see these charges in the company's bank account statements?

[muzzdang]

Yes, for 7 years

https://www.ird.gov.hk/eng/tax/bus_rke.htm

https://www.ird.gov.hk/eng/pdf/51c_pam.pdf

But the IRD said electronic copies are also acceptable, so just scan / keep the original invoice in a google drive, easy peasy

[shri]

Yes - needed in case of audits etc. We digitise all our receipts / invoices / bank statements (already digital) and usually share the digital copies with the auditor.

Easier now with google drive supporting scan and store in their phone apps.

[aquaman]

Yes, for 7 years

https://www.ird.gov.hk/eng/tax/bus_rke.htm

https://www.ird.gov.hk/eng/pdf/51c_pam.pdf

But the IRD said electronic copies are also acceptable, so just scan / keep the original invoice in a google drive, easy peasy

and will ird make you print them out if audited?

[muzzdang]

Books of account and source documents kept in the electronic form are
acceptable to the IRD provided that the requirements set out in paragraph 5 above are
satisfied. As a practical guide, the IRD recommends that the following arrangements
should be in place for retaining electronic records of source documents:

Still talks about CD ROM, USB drive etc, but yeah

https://www.ird.gov.hk/eng/pdf/pam60e.pdf

[shri]

and will ird make you print them out if audited?

Obligatory fax fact - Decades ago, we'd fax ourselves documents and get an email from an HGC fax->email service - because we did not have a scanner

The IRD doc above does mention that you don't need to print electronic statements to scan them. Mind blowing...

[TheRoadAhead]

Yes - needed in case of audits etc. We digitise all our receipts / invoices / bank statements (already digital) and usually share the digital copies with the auditor.

Easier now with google drive supporting scan and store in their phone apps.

Do you include all expenses? I mean large ones I understand, but what about the small ones (such as a a sporadic 50 HKD one off spend for a software tool or taxi ride for example)? It sounds cumbersome to save all these receipts/invoices. I guess scanning in Google Drive works well, but having to name correctly every receipt/invoice. I wonder if there is an easy way to manage this process

[shri]

Do you include all expenses? I mean large ones I understand, but what about the small ones (such as a a sporadic 50 HKD one off spend for a software tool or taxi ride for example)? It sounds cumbersome to save all these receipts/invoices. I guess scanning in Google Drive works well, but having to name correctly every receipt/invoice. I wonder if there is an easy way to manage this process

It's all on the credit card and or email for tools and services.

Does depend on how many transactions you process every month.

Rarely take a cab so don't think I have a single cash or octopus payment.

A folder for each month.. bank statements, expenses and revenue subfolders.