Does your wallet look like George Constanza’s? Do you find yourself rifling through a shoebox stuffed with receipts looking for a specific purchase? Do you scrunch up and throw away every receipt you are given?
If you answered yes to any of those questions, then you are in the right place!
Receipt management is a small, but very important aspect of your business bookkeeping. It allows you to prove all your business expenses are real and necessary costs of doing business.
Always keep in mind that the IRS WILL NOT accept your credit card or bank statement as proof. You must have a receipt in order for the expense to be considered valid during an audit.
Managing your receipts can be a nightmare if you don’t set-up the proper systems to help yourself succeed. The 4 simple steps below can take the pain out of receipt management and get you on the way to proper record-keeping!
Take notes
Your receipts need to include 3 pieces of information at a minimum; the date, the vendor name, and the total. This is not a lot of information to jog your memory should you need to recall this purchase in the future.
Most receipts do provide a breakdown of what was purchased, but even that information can be hard to interpret and may not help you remember what the heck you bought. So take a few moments to make yourself some notes. If you are buying office supplies, jot that down. If you had lunch with a client, write down who and what you discussed.
Generally more information is better, but don’t go too crazy with it. You don't need a novel, just a few notes about what you bought and why.
Scan your physical receipts
Apps are a glorious invention. There is an app for everything and you can bet your cookie that there are apps for helping to manage your receipts. I’m not going to get into any specific apps today because the point here is that technology can make scanning your receipts by taking a picture a quick and painless process.
Set aside some time each day or week, depending on how many receipts you have, and scan all your receipts into the app. Then you can throw them away!
Email receipts
Don’t trust yourself to get your receipts scanned on a regular basis? Then make technology improvements work for you.
An even quicker method than scanning your receipts into an app is to simply switch over to digital receipts. Obviously anything that you buy online will generate an email receipt, but many stores will allow you to choose an email receipt over a physical copy when you check-out.
Set-up a specific folder or even an entire email address dedicated solely to collecting receipts. This allows you to easily track and record all of your spending without having to manage a stack of paper receipts too.
Attach in your Bookkeeping software
All good bookkeeping software allows you to attach receipts to the relevant transactions. If your software doesn’t allow this, then you are using the wrong software. The most common bookkeeping programs, QBO and Xero, have apps that will let you take pictures of your receipts and upload them directly into the app.
If you don’t like the interface of the bookkeeping apps, there are many options for outside programs that integrate seamlessly with the bookkeeping software. Find the one that works best for you.
Technology is there to make your life easier. Use it to your full advantage by automating your systems to minimize your input. Reducing the amount that you have to touch a process allows you to focus your energy on what you do best.
Receipt management is a core part of your book and record keeping. Stay prepared for the future by getting the systems in place now.
Having trouble keeping up with your bookkeeping? I can help! Contact me today for a free consultation to determine if a virtual bookkeeper can help you grow your business.