When you drive for work-related reasons, every kilometre counts. The Canadian Revenue Agency (CRA) lets you deduct your mileage when you use your vehicle for business purposes, such as visiting customers or suppliers. Tracking your driving accurately helps you make sure you maximize those deductions for savings at tax time.
Benefits of Tracking Mileage Daily
You know you need to track your time in your vehicle when it relates to business, but it’s easy to let it slip when you’re busy with so many other things. You need an accurate record of the kilometres you drive for work. If you get audited, having that record is important. By making a consistent habit of tracking and recording your travel every day, you ensure you don’t miss any kilometres. Your records are as accurate as possible, and you don’t have to guess or think back to where you drove on each day. You have a ready-to-go record at tax time, which helps you streamline the prep process.
Creating an accurate logbook of your work kilometres doesn’t have to take a lot of time, but you do need to separate your business kilometres from your personal kilometres. You can track business mileage easily with a variety of apps that automatically track where you drive using GPS and log the distances. For example, TripLog offers different tracking methods with the option to invoice clients if you charge mileage. Many of these tracking apps integrate right into your accounting software, such as QuickBooks Online. You can also use the old-fashioned method of writing your mileage on a paper log. Leaving the log in your car helps remind you to track and write down where you drive. The car’s odometer records the distances, which you can then use to record the kilometres on a calendar you keep in the vehicle.
Whether you track your travel on paper or through an app, daily recording increases the accuracy of your finances. With QuickBooks Online, you can organize your business finances, track your expenses and stay ready for tax time. Try it free for 30 days.