It may seem like a small part of your bookkeeping duties, but filing receipts is a mammoth task if left to the end of the tax year! We share our tops tips to make organising your expenditures easy.
1. Keep every single receipt
And we mean every single one! Any shred of evidence is worth keeping should your accounts have to be gone through with a fine-toothed comb.
2. Make notes on your receipts
Especially if it isn’t an obvious business purchase. It may have been a lunch with a client for example. Just make a note of what business purpose it related to to make tracing expenditures easier down the line.
3. File receipts logically
This could be as simple as using a bulldog clip and then popping in an envelope with the correct month and year written on the front. Whatever you do, don’t just chuck all your receipts in one big box that will need sorting through at the end of the year!
4. Scan receipts for digital filing
Or take pictures on your phone. The idea is to create digital evidence that is easy to share with your bookkeeper or accountant. It is recommended that these files are kept for a few years as evidence should any old accounts issues arise.
5. Keep your calendar up to date
You might be thinking what has this got to do with receipts? but it is a great way to easily please an auditor should the need arise. If you are claiming business travel expenses, and business lunches, it stands to reason that an auditor should be able to locate these events in a business diary. It is part of the good housekeeping that can make everything run much more smoothly.
6. Don’t rely on bank statements
Just because you can prove you spent £X at your local stationary shop, it does not mean it went on printer paper, ink cartridges and staples. It is essential to keep the receipts for every transaction, regardless of whether you think a bank or credit card statement will be enough proof.
7. Avoid cash transactions
Cash is hard to trace, and cash transactions can be difficult to reconcile with receipts. If you are paying by card, the receipt along with the statement is solid evidence in the event of an audit that all is above board.
Remember – good bookkeeping is about being better prepared should you be required to provide evidence about your financial affairs. Plus there is the added benefit that you will find it easier to understand where your money goes in your business, and how you could refine your spending to increase your profit.
If you require any advice about utilising the services of a Virtual Office Assistant, contact one of our team today!