Tag Archives: Receipt

How to Handle your Business Expenses

Accounting and paperwork are scary to a lot of business owners, but it is a part of life. By setting up a system, you will make your life a lot easier.

Receipt Please

Receipt Please (Photo credit: Peter π)

For most people, accounting is not a priority in their business, but when month end or tax time comes, they are scrambling to find all their documents and prepare things. But if you take a bit of time each week or month to track your expenses, you will be ahead of the game and you will not have to look all over the place to find your paperwork.

One Location – First things first, put all your receipts in one location. This way, even if you do not have time to deal with it right now, you will know where to find it.

Make Notes – Mark your receipt with any relevant notes such as you were mailing a parcel to Jane or you took Joan out for coffee to discuss why your business would be a great fit with hers. These receipts are easy to forget their purpose.

Legibility – Make sure that the receipt is legible. If it is not, you can ask the location to write you a written receipt. If it is on the glossy till paper, you may want to photocopy or scan it, as those tend to fade over time.

Keep Current – Try to work on your books every week or at a minimum, once a month if you do not have a lot of transactions. This will save you a lot of time and headaches down the road.

Filing – Have a filing system that makes sense and you can keep up with. Challenge yourself to see how fast you can find something; if you have to go through multiple folders then it is not the right system for you.

Credit Cards – A great way to keep track of your spending is to put everything onto a credit card or debit card where you get a statement listing the expense. You won’t forget about it this way. Do not use the same card for your business as you do for your personal spending, as this can be very confusing and cause issues at tax time, especially if you are audited.

Envelopes/Folders – Envelopes and folders are a great way to organize your paperwork. Put unrecorded receipts in one until you record it, and then move to the appropriate folder once it’s recorded. You may choose to organize these by month or by type of expense; whichever works better for you and makes more sense.

One of the best reasons for keeping your expenses current and tracked is that you can see at a glance how well your business is doing and where you may be spending too much money. This is very important for a small business owner.

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I’m in Receipt Hell! What do I do?

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A lot of receipts and you don’t know what to do with them?  Find a few envelopes and we will get you square in no time!

You need to sort your receipts into different piles so you know what is what.  Here are a few suggestions – you may find you need different categories.

  • Supplies
  • Giveaways
  • Training
  • Meetings – Team members, Potential team members, customers, fundraisers
  • Utilities
  • Car Expenses

If you have a lot of receipts in a pile, then you likely want to create it an envelope for itself.  If you only have a few, then you can combine it.  You could also smaller envelopes for each category and then put them all into a larger envelope.

Label each envelope with whatever is inside it as well as the time frame.  If your receipts are all for one year, you can label it “Car Expenses – 2011” or “Giveaways/Training/Meetings – November 2011”, whatever method works for you.

Once everything is sorted and in its envelope, you need to put it somewhere so that you can input it into your accounting system.  If you do not input anything, but give it all to your accountant, then they may advise you how they would like the receipts sorted.

 

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Tax Tips for Your Business Today

I've started so I'll finish

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Are you one of those who wait until March to gather all of your bank statement, credit card statements, receipts, invoices, and bill statements? Do you wait until your accountant has called you repeatedly asking if you are going to make your appointment this year? Well stop. Chances are you might be missing something very important by waiting until the last minute. Being rushed puts stress on the body. Stress puts the brain into high access mode and you are not thinking clearly. No one wants to forget an expense or other important piece of tax information. Here are some simple tips for your business that you can get started on today to save you the stress headache during the next tax season.

Set up a file system

Most people don’t like to keep a paper trail. I can certainly understand why. It takes time to set up a file system and it takes up space to keep papers. In the world of taxes, it is always better to be safe than sorry. If an audit should ever arise you will want to be armed with your papers as proof of your deductions.

To quickly get set up you will need a file box or a filing cabinet for larger businesses. The first section should be invoices. It is up to you whether you want to write PAID and the date on them. It is also up to you to decide whether you want a separate folder for each client. The second section should be bills/expenses. It is here you want to keep the internet or cell phone bill as well as credit card statements (with the expense highlighted). Again it is your choice if you want to put these all in one folder or separate them by company. The final section should be for your bank statements.  When a new one comes in you should highlight work income as deposits and business related deductions as expenses.

What about receipts?

Receipts can be a pain to keep track of but you need them as proof of payment. I carry an envelope in my purse and place my receipts in there. Every few weeks I empty the envelope.  Receipts generally get stapled to the appropriate bill when using a credit card, or filed with the appropriate bank statement.

These are the things you need to pack up and take to your accountant at tax time. The better organized you are, the easier it is for everyone.

At the end of the year you can shred what you don’t need and the rest gets filed with your copy of the tax return.

Set up a form of recordkeeping immediately.

Do not wait until we are half way through the year to pick up a copy of Quickbooks , Quicken Home & Business, or any other accounting software you decide to use.  Unless of course your business is new. In that case, start right away. Having a accounting program at your fingertips will serve as a backup copy to your paper trail and do all of your calculations for you. With accounting programs you can bill clients by sending them invoices, reconcile your bank and credit card statements, place expenses in the appropriate categories and prepare financial statements. With a software program all of your needed numbers are available with the click of a mouse.

Starting these few simple tasks today can put your business on the right track to avoiding any disaster that could occur later. Start with 10 minutes a day preparing your files, and then moving on to sorting the papers. Once those tasks are set up you only need to spend minutes a day entering the bills, invoices, checks, deposits, etc. as they cross your desk.

Chrystal Mahan resides in Michigan. Mahan is a current college student working on a (double major) Bachelors in Accounting and Business, with plans to continue forward with a Masters.

She has 20 years of experience in the Accounting industry and over 10 in the field of Tax.

Mahan has been writing short stories since the age of nine and professionally since 2005. Mahan owns her own freelance business and writing appears on various blogs and websites.

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All About Receipts

Cash rounding receipts from ICA, Karlskrona, S...

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– Guest Post by Chrystal Mahan

Oh receipts. How we love to hate you. Tiny scraps of paper that crumble in our pockets, the bottoms of our purses or bags, or melt away when paired with the tiniest drop of water. You pesky receipts, why must you taunt us so with your date, time, place of business, and the amount we spend, only to fade over time when printed on carbon paper?

Many business owners have a love hate relationship with receipts. They are a necessary evil. Receipts are small enough to be annoying, important enough to help us keep track of financials, or even worse, help us out with an audit.

We don’t want them, but we have to have them. Businesses give them to us and keep a copy of them for their own records. They do this for the same reason we have to keep our own for our records. Proof. That is what it all boils down to. One simple word, proof. We need the proof of the transaction. We need to add the receipt to our paper trails.

One of the easiest things to do with receipts is to set up a filing system. You can label these how you wish: gas, meals, supplies, utilities, insurance, cell phone, and internet. Some business owners prefer to staple them to the appropriate bank or credit card statement.

Got carbons? Be sure to make a copy of those receipts since they can fade over time. Once tax season hits, that receipt will be blank.

  • Don’t have the space for a filing system? There are a few other options.
  • Using a camera take photographs of the receipts and store copies online.
  • Keep an Excel spreadsheet of the receipts, noting date, time, place and amount.
  • Keep extremely accurate notes/records in your business accounting program .
  • Use an online program such as Shoeboxed.com.

Whichever method you choose make sure it is the one that works best for you.

—-

Chrystal Mahan resides in Michigan. Mahan is a current college student working on a (double major) Bachelors in Accounting and Business, with plans to continue forward with a Masters.

She has 20 years of experience in the Accounting industry and over 10 in the field of Tax.

Mahan has been writing short stories since the age of nine and professionally since 2005. Mahan owns her own freelance business and writing appears on various blogs and websites.

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