A source document is the original record that evidences a business transaction — who was involved, what was exchanged, when, and for how much. It is the evidence every accounting entry traces back to. Receipts, supplier and customer invoices, bank and card statements, purchase orders, credit notes, payroll records, contracts and leases, payment confirmations, deposit slips and mileage logs are the common examples.
Document vs entry. The source document is created at the moment of the transaction, usually by the other party — the vendor writes the invoice, the bank produces the statement. The journal entry is your own description of that transaction in debits and credits, written afterwards. One is evidence; the other is bookkeeping. An entry with no document behind it is an assertion.
What each document proves. This is the distinction that causes the most confusion in practice:
- A bank or card statement proves payment — that an amount left the account on a date, naming the counterparty as the bank recorded it (often a payment processor, not the business you bought from).
- A receipt or invoice proves purpose — what was actually bought, and therefore whether it was a business cost at all.
"I have my bank statements" is therefore not the same as "I have my records". The statement can substantiate the amount and date of a deduction while saying nothing about whether it qualifies. Auditors and tax authorities generally want both.
Where they sit in the accounting cycle. Source document → journal entry → ledger account → trial balance → financial statements. Each step compresses, so the only route from a figure on a report back to what it consists of is the document reference the journal entry kept.
Why they matter. They create the audit trail, they substantiate deductions if a return is examined, they let you catch data-entry errors by comparing the entry against the document, and they make fraud harder because every figure has to match a document someone outside the business issued.
How long to keep them. In the United States, IRS Publication 583 (Starting a Business and Keeping Records) says to keep records that support an item of income or deduction until the period of limitations for that return runs out — generally three years, with named situations that run longer. In Canada, the CRA's "Keeping records" guidance is six years from the end of the last tax year the records relate to. Estimates — confirm with your tax professional.
Digital source documents. A scanned or emailed document is a source document on the same terms as paper: a complete and accurate reproduction, legible, and retrievable when asked for. The IRS addresses electronic storage systems in Revenue Procedure 97-22. The medium does not change what the document has to prove.
How ExpenseBot fits. ExpenseBot is spend capture, not a general ledger — it does not keep double-entry books or file anything. It reads receipts and invoices out of Gmail, accepts uploads and Google Drive folders, and extracts vendor, date and amount into a Google Sheet you own. Before an accounting push it classifies documents by type — a receipt becomes a QuickBooks Online Purchase, a supplier invoice becomes a Bill — and attaches the original document image to that QuickBooks record at push time, in the Attachments section of the transaction. The effect is that the source documents arrive already linked to the rows they support.
Full guide: Source documents in accounting