Tracking your receipts is an essential part of your annual tax preparation and your company’s financial management process. However, as a rushed business owner, it’s critical to find the right system to help keep you organized without taking too much time, effort or extra steps out of your day. From a simple paper-based system to sophisticated smartphone apps that digitize your receipts in a single click, there are a range of solutions to fit every workflow and style. Here is a closer look at different approaches to keeping track of your receipts throughout the year.
The Importance of Receipts
Receipts help business owners track their expenses and are especially vital at tax time. Receipts provide you with the information needed to file your tax returns. In addition, if your tax returns are questioned by the IRS, having your business receipts on hand can quickly and painlessly resolve an audit or request for more information. Producing credit card receipts and your own information may not be enough. During an audit, the IRS will require detailed receipts to understand individual purchases that you made and how they relate to your business.
Receipts aren’t just for tax time, however. They are a critical tool to help you or your accountant manage the finances for your business. Receipts help you better understand your spending patterns at a granular level. Commit the necessary time to find a system that helps you track your receipts, providing you with better financial data and the backup needed to take the maximum tax deductions you’re owed.
Create a Physical System
The best intentions to keep track of receipts can break down when we’re hurried on a business trip, buried in work or distracted by other more urgent priorities – in other words, when spending is most likely to occur! Yet having a system makes it easy to stay on top of retaining receipts, no matter what else is going on. The simplest system is keeping a folder or envelope with you. When you complete a business transaction, slip the receipt into the folder. It’s then possible to go back and digitize it later or hand it off to a bookkeeper as your schedule allows for processing. Simple accordion files are one quick solution, and each pocket can be labeled by type of receipt to make consolidation easier.
Use Your Smartphone and Evernote
If you’re ready to move beyond a paper system but don’t want to invest in a specific app, it’s possible to use the camera on your mobile device. Simply take a picture of each receipt, after you’ve made a brief note on it about the business purpose. The Evernote app makes it easy to categorize these files. Simply enter each photo into the app, along with any notes for future reference. It’s possible to search Evernote by keyword or to tag receipts according to date, expense category or other meaningful information to make it easier to find them or sort through multiple files while doing your taxes, for example.
Invest in a Dedicated Receipt Management App
A number of receipt management apps are on the market that have vastly simplified the process of managing receipts, filing expense reports (if your business uses that practice), and
- Shoeboxed: Shoeboxed is an app that allows users to take a picture of their receipts with their smartphone. An optical character recognition feature then converts the receipt to data which can be used in a number of different ways. Shoeboxed offers different level plans with increasingly sophisticated features. Its services range from the ability to mail in physical receipts and have them processed to your account to GPS-enabled services that make it possible to track mileage.
- Certify: Certify is a travel and expense management application that’s designed with an easy user interface in mind. It works with Android, Apple, Windows and Blackberry. Certify also uses character optical resolution to extract data from receipts. It offers advanced reporting capabilities and integrates with accounting systems such as QuickBooks.
- Receipts: Receipts is an app that integrates with Evernote and makes it easier for users to track their receipts. It’s downloadable from Evernote’s App Center. It offers features that busy business owners need, from easy receipts scanning to keyword-based storage.
Tracking your business expense receipts is important, but it doesn’t need to take up your whole day. Spend time determining what your real needs are and then embrace a system that will streamline your expense management workflow. From a simple receipts folder to fully integrated mobile applications, there are a wide range of options to support your goals and working style.
Are you a busy business owner with a great system for managing your receipts? Let us know what works for you – including your favorite tips and tools – in the comments below. Or join the conversation on one of our social media channels and help other business owners get organized this year!