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If you have ever had to file taxes for your business, you know how important it is to keep good records of anything that counts as a business expense. Not only does this help you with the tax return process, but it also gives you an accurate picture of the success (or lack thereof) of your company’s activities throughout the year. A receipt book can seem like one more thing to carry around and manage, but there are ways to make sure everything stays organized and easy to find.
Here are some tips for managing receipts for a small business:
1) Sort them by month or date;
2) Create subcategories such as “office supplies,” “gasoline,” or “restaurant bills” if necessary; depending on where you live, your government tax collection organization should have a guideline on what types of business expenses you can claim against your taxable income. You can organize your receipts in accordance with expense categories suggested by your country’s collection agency.
3) Use a hole puncher to keep everything together;
4) Put them in chronological order;
5) Consider taking photos of receipts instead of carrying around physical copies.
6) If you do choose to keep digital copies, create a well-organized filing system on your computer.
7) Back up all files regularly (if storing receipts digitally on your computer)
With a little bit of effort, you can develop a system for managing receipts that work well for you and your business. Staying organized will save you time and stress in the long run – not to mention, it will make tax season a whole lot easier!
By taking the time to properly organize your receipts, you’ll save yourself a lot of headaches and wasted time down the road.
If you have a lot of expenses, it might make sense to invest in accounting software that will track everything for you. This can save time and energy in the long run, particularly if you have multiple employees and need to keep track of their spending as well. Finally, be sure to hang on to receipts for seven years in case of an audit. The IRS has a statute of limitations of three years for most business audits, so as long as you have proof of your expenses, you should be in the clear.
Table of Contents
How to Organize Paper Receipts for Small Businesses
Envelopes and Shoeboxes
For many people, organizing paper receipts is a difficult and time-consuming task. However, there are a few simple techniques that can make the process much easier. One way to organize paper receipts is to use envelopes. Simply label each envelope with the name of a vendor or type of business expense, and then place the receipts inside. YOu can then file these envelopes inside a shoebox or any type of small box where your envelopes fit. Label each shoebox with the date range of the receipts inside, and then store them in chronological order by year. This method makes it easy to find specific receipts, but it can take up a lot of space. Whichever method you choose, organizing paper receipts is an important step in keeping your business finances in order.
Expanding File Folders
Anothery neat way to stay organized with your receipts is to use expanding file folders. These folders can be labeled by month or year. In most cases, you’ll only need one expandable folder per year. There’s usually a lot of compartments inside an expandable folder, each slot allows for one expense category. You can put your receipts directly inside the slot or you can use envelopes to further organize your file.
These expanding file folders also help to keep receipts in good condition, preventing them from becoming crumpled or lost. Expanding file folders are an essential tool for any business that wants to stay organized and efficient.
How to Organize Business Receipts Digitally
Another way to organize receipts is to store them digitally. This can be done by taking pictures of each receipt with your smartphone, or by scanning them into a computer. Once they are digital, you can save them to a hard drive, USB flash drive, or cloud storage service. This method has the advantage of being much more space-efficient than paper receipts, and it also makes it easy to share receipts with your accountant or bookkeeper. However, it is important to back up your digital files regularly in case of data loss.
Scan & File
Scanning and filing your receipts digitally can save your a lot of time and hassle come tax season, plus you don’t have to deal with faded receipts. It just takes extra effort to scan and file your receipts digitally in a folder on your computer. You can delegate a day each week or every month to scan and file your receipts digitally or you can outsource this task to a family member like your kids or spouse, if applicable.
There are several benefits to using a digital system for organizing your receipts. First, it’s much easier to search for specific receipts when they are stored electronically. Second, you can easily share receipts with your accountant or bookkeeper. And third, you don’t have to worry about losing receipts if they are stored digitally.
You can use a scanner at home or office, or use a receipt scanning and filing mobile app to scan your receipts. There are many different apps available, but some of the most popular include Shoeboxed and Evernote Scannable. Both of these apps allow you to scan and file your receipts quickly and easily.
Receipt and Bookkeeping Automation
Another great way of scanning and filing receipts digitally is by using receipt scanning apps provided by accounting software such as FreshBooks, and Wave.
These platforms make it easy to track expenses, invoices, and payments all in one place. They also offer features like automated expense categorization and receipt scanning, which can save a lot of time. Another option is to use accounting software like QuickBooks or Xero. These programs offer similar features to online bookkeeping services, but they also provide more in-depth reports and analyses.
Whichever solution you choose, automating your bookkeeping will save you time and hassle in the long run.
Conclusion
Whether you’re a small business owner or self-employed, organizing your receipts is essential for staying on top of your finances. There are many different ways to organize and store receipts, but the best method depends on your individual needs and preferences. You may want to try sorting them by month, type of purchase, or vendor. Or you may prefer to scan and file them electronically using a scanner or mobile app. By taking the time to set up a system that works for you, you can save yourself time and hassle down the road.
Digitizing your receipts can save you time and hassle come tax season. Most accounting software programs offer features that make it easy to categorize and track expenses. So not only will you save time by digitizing your receipts, but you’ll also gain a better understanding of where your money is going.
If you prefer to keep paper receipts and a not yet comfortable with digitizing them, two of the best ways to organize your business receipts are the envelope and shoebox system and the expandable folder system. Both are better than simply tossing your receipts in a shoebox.
I hope that you found value in this article. If you think that this information may be helpful to other entrepreneurs, please don’t hesitate to share this on your social circles. An easy way to share this is by clicking or tapping on the image below to share this on Pinterest.
If you have your own way of organizing business receipts that may be helpful to other entrepreneurs, please don’t hesitate to share it in the comments below!
