As business owners we all know that we need to keep our receipts. We need them to prepare financial information, to confirm the information on our bank statements are correct, to track deductible expenses, to keep a basis for depreciable items, to prepare a tax return, and to support the numbers reported on your tax return.
Many business owners struggle with the best way to wrangle all those receipts. Quite often they turn to what I would call a low-tech way of filing them…in a file folder or envelope sometimes marked with the month & year, sometimes not. And there is nothing wrong with this method if it works for you, and doesn’t take up excess space, then stick with it.
However, if you want a cleaner way to store, organize and reference all those receipts without them cluttering up your filing cabinets, you can go a little higher tech.
There are three ways I personally like for wrangling all those receipts. Before I start on the ways to handle the physical receipts you get, those little pieces of paper, I also wanted to tell you one of my secrets. If one of the stores I go to regularly offers for me to sign up and get my receipts electronically, then I’ve done it. I LOVE hitting that little button on the POS screen and saying email me my receipt. Nothing goes in the purse, or a pocket, or the car console….or anywhere else receipts get stashed.
So, now how to manage the receipts you do get.
The first way is to scan & save the receipts to your hard drive. Create a file folder on your hard drive named Receipts, scan the receipt, name the scan something you’ll understand (Mobil 010115 – for a gas receipt dated Jan 1, 2015) and save the scan to the file. As long as you are consistent in your naming, this can provide an excellent storage solution and you can search for a receipt at a later date. You can even create additional folders; i.e. 2015 Receipts, 2014 Receipts. Or sub-folders that match your bookkeeping accounts (gas, meals, office supplies, etc.) so you can search for something specific at a later date.
The next way is, if you are using QuickBooks (both Desktop & Online versions) you can attach files to individual transactions (pdfs, docs, etc.). In QBD, while in the transaction (Write Check, Deposit, Invoice or Bill screen), click the Attach option on the tool bar and choose the document to be attached. In QBO, in the transaction (same as in QBD), scroll down to the bottom of the screen, click Attachments, click Show existing, and attach the documents you want. By scanning your receipts you can attach them to the corresponding transactions in QB and have them for reference. This is an excellent way to maintain your receipts. As you add documents to your QuickBooks transactions, it will make the file larger, so you should be aware. I tend to only add receipts for large or unusual purchases within QuickBooks.
Both of the above ways require you scheduling time to scan & save your receipts on a regular basis. IF you are going to try either of these, I strongly recommend scheduling time daily or weekly. You risk losing receipts by scheduling it monthly or longer, and the time needed will be substantial. As business owners we know our time is valuable and who wants to spend much more than 10-15 minutes scanning & saving receipts? There are scanners on the market that can make this somewhat automated, but no matter how automated, a month’s worth of receipts will take a bit of time to file.
The next option is using one of the two popular note taking programs, Evernote & One Note. This is my new favorite way to handle my receipts. And for full disclosure, I use One Note. I have many friends & clients who prefer Evernote, and tell me that the process is pretty much the same as it is in One Note. I cannot personally vouch for that, but do know there are a TON of blogs & YouTube videos available for Evernote users to walk you through saving receipts in Evernote. You will need a smart phone and the app for either One Note or Evernote downloaded onto your phone. Then, when you are out and about, and get a receipt, open the One Note app, go to a Notebook (I have one named Receipts), Open a new Page (I open a page per day), and click the plus button on the top of the screen. A camera icon will appear, click the camera, choose Capture a Photo, and take a picture of the receipt. You can have more than one receipt captured per page. When you’re back in your office and sync the One Note app with One Note on your computer, you can make the images searchable, and tag the images for future reference. This isn’t completely seamless, but I have found that I’m more likely to this than to take the time during the week to gather the stack of receipts and scan them in.
It doesn’t matter which way you choose, what matters is you have the back-up needed for future reference, and you feel that it is something you can do consistently.