We have the best ways how to organize receipts for your business! No matter the size of your business, you must get organized to make tax season a breeze.
Whether it is tax time or you want to get a better grasp of your numbers, you may be looking for a solution to organizing receipts for your business. We are sharing the best ways to have a filing system for your receipts that may make you much more prepared when you need to get a handle on your business expenses.
How to Organize Receipts for Your Business
Everyone handles this differently, so we will share with you various ways we have done so in the past with our paper receipts, e-receipts, and the great way we have things organized now. That way, you can have options for what works to not only keep track of your receipts but to have everything in line for tax purposes.
Take it from us, when the Internal Revenue Service comes calling, you want to be able to access a specific receipt, or proof of tax deductions easily.
How to Organize Receipts for Your Business- Physical Receipts
You are having a coffee meeting for a business purpose, or you purchase something for your small business, and you receive a paper receipt. Do you roll your eyes the way we do? Ughhh! It’s just more paper clutter for you to keep track of. Let’s go through some best practices when it comes to organizing paper receipts.
1. Refuse Paper Receipts
When you can, ask or opt for an email receipt. Not only is this a good idea because, hello, waste, but second, the chances of you keeping that receipt in a safe place where it will not get lost are pretty low. Even if you are super organized, keeping track of receipts in your wallet or your work tote is not foolproof. The best receipts are electronic receipts.
2. Digitalize the Receipt, Immediately
Snap pics or scan your receipts with your cell phone. Apps like Quickbooks have an option for them to be categorized immediately. If you want an option with no frills, just take the photo and email it to yourself. Even better, go ahead and put in the body of the email what the expense type is. Having a picture of the receipt is a sure way to always have it.
We often take a photo or scan receipts, and if we are in a hurry, we know that they are backed up on our Google Photos. It’s a good practice to have a regularly scheduled time to make sure your expenses and receipts match and are accounted for.
A scanning app is a great idea and is always handy. It’s an easy solution and there are free versions available like TurboScan, if you don’t want the additional expense.
3. File Folders and Labels
If you are old school, and just don’t want to go the digital route, create labeled folders for each expense category. Drop the receipts in the folder it belongs to, and go through your receipt organization regularly.
We don’t recommend this route because you are just going to end up with a stack of receipts you have to go through.
How to Organize Receipts for Your Business- Digital Receipts
Yay! You are all digital with your receipts, but how should you organize them? We’ll share some ways that have worked for us.
1. Accounting Apps
As we mentioned, Quickbooks or other accounting apps are a great way to store your digital receipts. Small business owners and even larger companies rely upon a digital platform to store their financial documents.
Despite fears around security, the good news is that security has come a long way over the years. Besides, your financial statements are more secure digitally, than paper floating around. Digitizing is how to organize your receipts for your business.
2. Spreadsheets
Whether you are a Google Sheets fan or Excel, sheets are always a reliable source when keeping accurate financial records. They can be used to track personal expenses, credit card expenses, and what category the expense falls under.
3. Cloud Store and Organization
Again, with Google… we love Google Drive for all of our digital organization. We keep all of our credit card statements, bank statements, expense reports, store receipts, and anything you can think of when it comes to finances in a folder.
This way, when it comes time to work on our tax returns, the digital folders are like our easy-to-access filing cabinet. We know everything is there, and usually have an automation that has linked expenses to our spreadsheet, or our accounting app.
Since we do everything online, we wanted to share our process. Digital receipts are usually emailed to us, so we save the online receipts in a folder on our desktop that is meant to be uploaded to Google Drive for the expense, month, date, etc.
Categorizing Your Expenses
Depending on your business industry, you may have different ways that you would categorize your expenses. Whether you are using a column in Google Sheets, or tags in accounting software, here are some frequently used categories for tax purposes.
- Payroll or Contract Labor Expenses
- Advertising and Marketing Expenses
- Business Startup Costs
- Business Vehicles
- Business Materials and Office Supplies
- Rent and Leases
- Utilities
- Telephone
- Travel Expenses
- Meals and Entertainment
Be sure you document everything thoroughly. When you traveled, what was it for? When you had meals and entertainment expenses, who was it with? What was the meeting about? All of this should be notated in a spreadsheet or your accounting app.
How to Stay on Top of Expenses
The best thing small businesses can do is to stay on top of their financial records. There are some ways you can make sure your business transactions are accounted for. Everyone works in different ways, so we will share a few ways that we recommend you choose from for your record keeping.
1. Weekly Roundup
We love a money meeting. We have our household money meeting every Sunday. With this, we can go through our receipt management, determine if we are missing receipts, look at our cash flow, etc. This same routine can be used, no matter the size of your business.
2. Monthly Meetups
Similarly to the weekly roundup, schedule a meeting to review your receipts at the end of each month. Review, organize, and make sure everything’s going the way you want it to go.
Embrace Good Record-Keeping – Go Digital!
In the realm of running a successful business, the systematic organization of receipts stands as a pivotal practice for mental security and clarity. Being meticulous with receipt organization will help you as you approach tax season.
The commitment to order with your business records not only fosters operational ease but also lays the groundwork for informed decision-making.
Just a quick heads up – while we love sharing our own experiences with managing business expenses, we’re not tax professionals or advisors. Our insights are more like friendly campfire stories than professional advice. Always remember to seek assistance from a qualified professional for your specific tax needs. Your financial adventure deserves the expertise of a seasoned guide. See our Terms and Conditions for more information.
FAQs | Frequently Asked Questions
We use an app called MileIQ. Of the mobile apps out there, we like it best. It allows you to export your mileage at the end of the month on a spreadsheet for record keeping.
We recommend having a separate bank account or credit card account to use for business expenses. If you do not have a business account, we always recommend you scan or take photos of the receipts immediately. You are more likely to lose receipts while traveling, so be sure to digitize them.
You can set up one email address to receive all of your electronic or digitized receipts. A digital copy will always be accessible in the email inbox. You can also set up automation using Zapier to send email information to whatever platform you use to keep track of expenses or banking. The most effective way to automate is the best way that works for you and your platforms.
