09/17/2022
So, let’s talk about keeping those business receipts.
You are not alone if you do not have a system for keeping your business receipts.
Many business owners either do not think about keeping their receipts as they had the statements or they just do not have a system to get organized to motivate them to keep those receipts.
Many people think that the credit card statements and bank statements are sufficient enough to back up the purchase of an item.
But let’s think about that for a minute, what information does it tell you on your statement? It tells you where you bought the item, when you bought the item and how much you paid for it.
But it does not tell you what you bought.
It does not say what the item was to show that it was a business expense and not something that you bought for your house or as a gift for someone. How can you prove that the purchase was a business expense if you do not have an itemized receipt?
Some people are good at keeping their receipts, but then they just stuff them into a shoebox!
They put them in the shoebox and wait for the end of the year, then give the box of receipts to the tax professional for them to prepare their tax return.
So, congratulations on keeping your receipts.
That is a great first step. But it is also important to organize those receipts.
Also, have you noticed how the ink on that thermal paper fades overtime?
Can you imagine opening that shoebox at the end of the year and finding 100 pieces of blank paper?
So this is why it is important to either make a photocopy of those receipts or even better, scan them and save them online.
When you scan them online you are creating another backup copy and if you are using a program like QuickBooks Online, then you can attach the receipt to that exact transaction.
There are so many advantages to doing this.
Firstly it means that you have an online, backed up copy of your receipt.
It means that if you ever need to go back and look at that receipt it will be easy to find.
Also it is great for your tax professional to be able to see that receipt to determine if it is a business expense or not at tax time. so keeping the receipt in the first place is the first half of the battle.
If you use QuickBooks then I highly recommend that you scan that receipt at the time of purchase.
When you get back in your car, pull out your phone, put the receipt on your knee and take a photo of it and upload it.
I do this and it is the easiest way I find to keep track of my receipts.
The other way is to have a plastic envelope in your car or your purse and put the receipt in that as soon as you have made that purchase and then organize them at the end of the week or the end of the month.
This needs to be a habit that you get into on a regular basis and do not put it off. now let’s talk about those email receipts that come in. For me I save them to a folder called 2022 receipts. Then my assistant downloads and attaches them to QuickBooks and then files them by month and yeah in my email.
There is also an option in QuickBooks that you can forward that receipt to an email as well.
You have to find the system that works best for you.
So, what can you do today to get organized with your business receipts?
Think about what will work for you best.
Then DO IT!!
