Handle missing expense evidence properly: HOLD: Flag incomplete expenses and retain bank records and supplier emails; ATO requires evidence showing cost, supplier, date paid, nature of expense and preparation date; Keep records of how the expense links to income earning and any work-private split
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Handling missing evidence before posting an expense

A missing receipt should have a defined exception path, not an automatic guess.

Desk Accounting Practice · · 3 min read

Use the HOLD–FIND–TEST–LOG–DECIDE process before posting an expense with missing evidence. It separates recording a transaction from deciding whether its evidence supports a tax claim.

The ATO record-keeping rules require records of transactions relating to tax, super and registrations, including business expenses and cash purchases. Records must be in English or readily translatable into English.

For an individual’s work-related tax claim, ATO written evidence must show the cost, supplier’s name, nature of the expense, date paid and date the evidence was prepared. Keep a record of how the expense relates to earning income, how the amount was calculated and any work-and-private split.

HOLD: Flag the item as incomplete and keep the card or bank transaction and supplier correspondence. Do not mark the evidence complete just because a payment appears in the account.

FIND: Ask the spender and, where available, the supplier for the original or a replacement receipt or supplier tax invoice. Check that the document contains the information required for the relevant claim.

TEST: The ATO accepts an electronic image of a paper record if it is a true and clear reproduction of the original and follows record-keeping rules. A bank or credit card statement on its own is not written evidence for a work-related expense because it does not show what was bought.

For an individual’s work-related expenses, a total claim of $300 or less does not require full receipts, but the person must still show the money was spent and how the claim was calculated. This exception does not apply to car expenses, meal allowances, award transport payments or travel allowance expenses.

For work-related expenses of $10 or less each, a diary or phone note can be used instead of a receipt, up to $200 in a year. Laundry of $150 or less can be worked out at $1 a load for the person’s work clothing, or 50 cents where it is mixed with personal washing; this amount is included in the $300 limit.

LOG: Create an internal Missing-evidence register entry with the transaction, missing document, reason, evidence retained, exception relied on, authoriser, follow-up owner and status. Record why the exception was allowed and who authorised it.

DECIDE: The responsible accountant or tax adviser should decide whether the retained evidence or a specific exception is acceptable for that transaction. If evidence is still unresolved, keep the item flagged and follow it up; if a deadline requires a provisional accounting entry, show its status and owner rather than treating it as substantiated.

Keep tax records for five years from the date the return is lodged. Asset records and records relating to an ATO dispute may need to be kept longer.

Review recurring gaps by category and team, then improve the capture workflow where needed. Keep exceptions distinguishable from expenses with complete supporting evidence.

HOLD–FIND–TEST–LOG–DECIDE: Handling Missing Expense Evidence

  1. HOLDFlag the expense as incomplete. Retain bank transaction, supplier correspondence. Do not mark evidence complete just because payment appears.
  2. FINDRequest original or replacement receipt from spender and supplier. Confirm it includes cost, supplier name, nature of expense, date paid, and date prepared.
  3. LOGRecord in Missing-evidence register: transaction, missing document, reason, retained evidence, exception used, authoriser, follow-up owner, status. Document why exception was allowed.
  4. DECIDEAccountant or tax adviser decides if evidence or exception is acceptable. If unresolved, keep flagged. For deadlines, use provisional entry with status and owner — do not treat as substantiated.

Internal Missing-Evidence Register Checklist

  • Transaction detailsInclude amount, date, category
  • Missing documentSpecify what’s missing (e.g., receipt, invoice)
  • Reason for missingSpender lost it, supplier didn’t issue, etc.
  • Evidence retainedBank statement, email, photo, note
  • AuthoriserName and role of person approving the exception
  • Follow-up ownerPerson responsible for resolving missing evidence
  • StatusOpen, Resolved, Pending Review

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