Let me preface this by saying that I am not an accountant nor do I claim to be. It is always in your best interest to consult with your tax professional for confirmation and advice, but this post may prove very useful for all the small business and home-based business owners in the audience.

What happens when you purchase something for the purposes of your business, but you do not have a receipt to record the purchase? Can you still “write it off” like any other expense that your business may incur over the course of its daily operations? The short answer appears to be yes, but it comes with several caveats. It is always easiest if you are able to get some sort of proof of purchase, even if it is just a hand-written receipt from the seller, but this isn’t always possible.

In order to “write off” this expense, you have to ensure that the transaction is properly recorded in your books. Note the date of the purchase, the name of the seller (whether it is an individual or a business), the contact information of the seller (if available), the product or service being purchased, the effective sale price, and any other information related to the transaction. You can hand-write a note to document this, as well as entering it into your books.

If you take care to note as much as possible about the transaction, you can then show this information to the government in case you get audited. This information can also be forwarded along to your accountant, who can then have it included as part of your annual tax files.