What does substantiation mean?
submitted by pushpinder singh

koalawala

Substantiation just means providing proof that something is true. In accounting, that's probably some documentation, like a receipt. If you've spent money on work expenses, you can substantiate it with a receipt. If you've bought donuts and said you paid for toner, you can't substantiate it.

weirdsalot

In accounting, substantiation is like showing your work. If you're claiming a deduction or a expense in accounting, you've got to have the docs to prove it.

soup_dragon

It's essentially about backing up your claims with solid evidence. It’s got a fancy name because it's one of those foundational principles in accounting.

Some of the supporting documents you'd need are receipts, invoices, bank statements, and contracts. This way, if the IRS or any auditors come knocking, you can show them that your numbers are legitimate.

It's good for you too. If you have proper documentation on everything going on at your office, it's way less likely someone is going to walk off with some cash. At least, not in any significant amounts.

Substantiation is all about keeping a trail of evidence that confirms it really happened and that the amount is correct. It's there to protect you, and it makes it easier for you to find info later.