Updated Checked by the Tax-Services.ca editorial team How we check
OCR (optical character recognition) reads the text on a scanned receipt or invoice and turns it into data your bookkeeping can use. In Canada it saves typing, but it doesn’t change the rules. You still keep your records for six years, keep them in Canada unless the CRA agrees otherwise, and stay responsible for every number the software reads wrong.
Does the CRA accept scanned receipts?
Yes, if the scan does the job of the paper. The CRA’s page on acceptable formats and imaging paper documents says the image must be an accurate reproduction meant to take the place of the paper, must give the same information, and must not hide significant details because of resolution, tonality or colour. It also points to Canadian General Standards Board standards. If your process meets them, the images become the permanent records and the paper can go. If it can’t, keep the originals, and if you have any doubt, get advice before you shred anything.
Location matters too. Records belong at your place of business or your home in Canada, unless the CRA gives you written permission to keep them elsewhere. The CRA may allow electronic records to be kept outside Canada, but they must be available in readable form in Canada when asked. That matters for OCR services, because many store your files on servers in other countries. Ask any provider where the files live before you upload a year of receipts.
How do you set up an OCR routine that holds up?
Start small. Pick one stream of paper, such as supplier invoices, and run it for a month before adding the rest. A short routine that a tired person can follow at the end of a long week beats an ambitious one that nobody keeps up past the second month, and that goes double for a small team with no dedicated bookkeeper.
| Step | What to check |
|---|---|
| Scan or photograph | Flat, well lit, all four edges visible, no cut-off totals |
| Read | Supplier name, date, subtotal, tax and total captured as separate fields |
| Review | A person looks at each item before it’s posted |
| Match | Compare to the bank or card line |
| Store | File the image with the entry, named by date and supplier |
The review step is the one people skip, and it’s the one that matters. OCR is quick, but it confuses 3 and 8, 1 and 7, and it may read a decimal point as a comma.
How do you catch a bad read?
Check the tax. Sales tax is a fixed share of the price, so a receipt can prove itself. Say the software reads a total of $113.00 on an Ontario purchase. The GST/HST calculator says a $100.00 price carries $13.00 of HST, for a $113.00 total. If the OCR shows $13.00 of tax and a total of $118.00, one of those numbers is wrong.
When you only have the total, the HST reverse calculator splits it back into price and tax. It takes ten seconds. It protects your input tax credit claim. That claim needs the purchase invoice or receipt behind it, so a garbled scan costs you real money.
A second habit costs nothing. Sort the month’s entries by amount and look at the biggest ten. Errors on large items do the most damage. A stray extra zero turns $85.00 into $850.00, and nobody spots it until the bank rec won’t balance.
What does OCR do to your tax figures?
Everything downstream inherits the input. If you’re self-employed, expenses feed the self-employed tax calculator, and a receipt read at ten times its value can flip a profit into a loss on paper. For an incorporated business, the same data drives the corporate tax calculator, so a clean ledger is what makes the estimate worth anything.
Also think about the categories. OCR reads text. It doesn’t know if a $60 dinner was a client meeting or a family night out. You decide that, and the CRA can ask you to explain it.
What mistakes and limits should you expect?
Thermal paper receipts fade, so scan those the day you get them. Even a double-double receipt from the coffee run turns blank in a drawer within months. Handwritten notes and crumpled paper come out badly. Foreign currency receipts need the exchange rate recorded by you, not guessed by the tool.
Don’t destroy the paper on the day you scan it without knowing the rules. The six year clock still runs, and records can’t be destroyed early without the CRA’s permission (Form T137). If the original matters, keep it until you’ve checked that your scans meet the standard above.
We couldn’t confirm anything about privacy law for these services, and we make no claims about any product’s accuracy, price or features. Judge a tool on a sample of your own receipts, the messy ones included.
Can you just photograph receipts with your phone?
For many small businesses, yes, as long as the photo is sharp enough to meet the same tests: same information, nothing obscured. Take it flat, in daylight, before the receipt goes into a pocket. Sam, a plumber in Regina, snaps each supplier slip in the truck and drops it into a folder named by month. The routine takes him maybe thirty seconds a receipt, and nothing gets lost under the seat. Back up that folder too, because a lost phone with the only copy is the same as lost paper.
Where we got these figures
Retention, location and imaging rules are from the Canada Revenue Agency‘s guidance on keeping records, read in October 2026. The HST figures come from the 13% Ontario rate in this site’s calculator. No government body is behind this site.
Frequently asked questions
Can I throw away paper receipts after scanning them?
Not automatically. The CRA points to IC05-1 for electronic record rules, and destroying records before six years needs its permission.
How long do I keep scanned receipts?
Six years from the end of the last tax year they relate to, the same as paper.
Can my scanned files be stored outside Canada?
Only with CRA permission, and the copies must be certified, readable and detailed enough to support your returns.
How do I check an OCR reading?
Recalculate the tax. In Ontario, HST is 13% of the price, so a $113.00 total should show $13.00 of tax.
Does OCR replace a bookkeeper?
No. It captures text, but a person still decides categories and checks totals before anything is filed.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST