Every transaction in your business has to be accounted for. In the nonstop world of a small business owner, it can be a real challenge to keep up with receipts. You either forget to enter the expense in your accounting software, or you just guess at the amount. Either way it’s a mess. That’s why we’ve put together a list of tools that help make it easier.
Why You Need to Keep Up With Receipts
Before we explore how to keep up with receipts, let’s talk about why it’s so important.
Receipts are a big deal because:
- The IRS says so. If you are ever audited, the IRS will expect you to be able to show proof of your company’s purchases and expenses. The IRS web page that details what kind of records you should keep explains: “It is important to keep these documents because they support the entries in your books and on your tax return.”
- They can help you discover reconciliation errors. Few things in life are more frustrating than trying to balance the books when the numbers just won’t add up. You know that an important piece of information is missing, but you can’t find it anywhere. Imagine how much better those moments would be if you had all of your receipts. By having the documents you need when you need them, you save yourself lots of valuable time and money.
- They might help you find a tax deduction. When tax time comes, would you like the chance to save some money? You just might if you keep your receipts and have them organized in a way that lets your CPA find deductions that you didn’t know about. Think of it as getting paid to keep up with receipts!
How to Keep Up With Receipts
Not that long ago, businesses had to keep financial records organized in large boxes. Often entire storage rooms would be dedicated to all of the receipts and records involved in running the company…just in case they were ever needed.
The headache of organizing everything and the stress of hoping nothing happened to it all–like theft, a fire, or water damage–was enough to drive a small business owner crazy!
While there are still good reasons to have physical copies of some of your financial records on hand, thankfully, most things today can be safely stored in a digital format. You not only save a lot of space, you can sleep easier with the peace of mind that your files are secure…if you do it right. Don’t forget to protect your business data!
Here are the steps we recommend for managing your receipts:
- Find a method and stick with it. You could know all kinds of whiz-bang tips and tricks for managing your finances, but unless you consistently do them it doesn’t matter. When it comes to receipts, it doesn’t matter how you organize them (by date, vendor, type, etc.). It only matters that you do it the same way every time. Make sure your entire team is trained on how your business organizes receipts so that you’ll have the peace of consistency if there’s ever a particular receipt you need to track down.
- Write on your receipts. Once a vendor gives you a receipt, it’s yours to do with as you please. Don’t be afraid to mark it up! Write notes, circle items, draw arrows…whatever you need to do so that when you come across that receipt again months or years later, you’ll be able to easily remember what it was for.
- Go digital. It’s easier than ever now to scan your receipts directly into your accounting software or to your accounting firm. Take advantage of the ability to use technology to declutter your workspace and simplify your record keeping processes.
Recommended Receipt Scanners
Small business resource site, The Balance, recently did a review of “The 8 Best Receipt Scanners of 2021”, and we think it’s a pretty solid list. Options range from as little as $100 for portable units to as much as $650 for a wireless option with all the bells and whistles. Depending on your budget, needs, and operating system, one of these 8 will help you begin to keep up with your receipts like a pro.
How to Partner with a Pro
Ultimately, you are responsible for your business. But at some point, keeping up with complicated financial requirements can get overwhelming. We get it. We’re CPAs, but we’re a small business, too. We deal with the same things you do.
Since we’ve been working with small business owners for over 40 years, we understand the value of partnering with a pro. And since we eat, sleep, and breathe small business finances, we know how to help you navigate the numbers with ease.
Helping you keep up with receipts better is just one of the many ways our team can help your business succeed and grow. While most CPA firms focus on taxes, we believe you should expect more. That’s why we share tips like this one.
It’s why we offer monthly bookkeeping services (or quarterly…whatever you need).
And it’s why we put together a free PDF called “9 Simple Accounting Mistakes That Are Costing Your Business Money.” Download your free copy today and start saving money! (P.S. – You’ve just read about one of the mistakes here: Failing to Keep Receipts. So click below to learn about the other 8!)
When you’re ready to partner with a team of finance experts who are interested in helping your small business win, schedule a call with us and learn how we can help.
