Irritated with your mountain of accumulated business receipts? Get your life back with these basic rules
They’re sneaky little things, aren’t they? Those little pieces of paper that seem to creep into the corners of your desk or depths of your purse like the crumbs that collect in your silverware drawer. (Come on, lift your silverware drawer organizer and you’ll find a heap of crumbs lurking in there. You’ll wonder where they came from and why so many!) Business receipts accumulate at a rapid pace, and before you know it, there’s a mountain of them. Receipts are a necessary evil for any business owner. You have to keep them for tax purposes, but it can be a struggle to organize them. Follow a few basic rules to tackle your business receipt pile-up and you will be able to keep them organized. Figure out how you need to categorize your receipts for accounting purposes and tax documentation.
- Do you need to segregate your expenses into various categories like marketing, gas, tolls, office supplies etc.?
- Do you bill expenses back to your clients?
Then determine how frequently you will manually tally up expenses or enter totals into an accounting program like QuickBooks. Will you or an assistant do it monthly, weekly or wait until the end of the year? (Gasp! Yearly is NOT a recommended strategy!) Select a storage option that appeals to you because it will be easy to use. Don’t obsess over finding something that’s colorful or trendy before you find something that is functional. A few options to consider are:
Accordion folders – They come in various sizes, but for business purposes, larger files work best because you don’t have to fold documents you print from your computer. They are portable, don’t take up a lot of space, and you often have the option to customize the label of each section. Accordion files are also available with tabs labeled by month if you prefer to sort your business receipts that way.
- Hanging folders – If the thought of keeping your business receipts within your line of sight makes you cringe, sort them into hanging folders and hide them away in your desk drawer or portable file box.
- Shoeboxes – Cardboard or plastic is fine. I know this storage option wouldn’t work for me because I have space limitations. If you don’t suffer from a lack of space, it’s easy to just dump your business receipts inside.
- mail/literature organizer – You can’t deny that organizers like this make it easy to toss receipts in one of the slots and walk away. They work well in shared office spaces because of the open access. Make sure to label each section. or
- Online software and phone apps – Two of my favorite programs are Shoeboxed and Expensify. Both interface with various accounting programs. You can scan or take a picture of your receipts and upload them directly into the program. If you truly can’t be bothered with the paper, you can even mail your receipts to Shoeboxed in prepaid envelopes and have someone enter the information for you!
Over the years, I have noticed five common business receipt organizing mistakes people make. You can’t afford to make them because every deduction is worth a little bit of money back in your pocket.
- Print your online receipts as soon as your purchase is confirmed. Don’t wait and think that you will remember to do it later.
- As soon as you receive a receipt, make a note on it to help you remember what it is. Did you take a certain client out to lunch? Did you buy folders for a presentation for a particular company? Why did you have to send something via FedEx?
- Drop receipts in your receipt organizer as soon as you return to your office. If they’re scattered in your car, your suitcase, and all over your office, you are guaranteed to lose a few.
- Separate receipts for expenses that are billed back to a client. Write the client’s name on each receipt.
- Resist the urge to purchase personal and business items in the same transaction. It’s much easier to process business receipts if there aren’t any personal items on the receipt.
Have you ever made a mistake trying to organize your business receipts?