Having organized and keeping track records of purchases is essential to operating a small business. So before you pull out your hair this tax season, take some time to organize your expenses and follow these quick steps to track better your business receipts.
STEP 1: Gather all your receipts.
This is the most tedious part of the process and requires a good deal of time and patience. Look for all your loose receipts. Check your car, purse, wallet, or other places you stash a receipt.
STEP 2: Separate business and pleasure.
It is important to have an independent bank account for all expenses of activity. Do not pay any personal expenses from this account. If you need money from your company for personal expense, then I suggest yourself a check.
STEP 3: Set up a filing system.
Discover a system that works for you. If a little accordion organizer isolated into the 12 months of a year lives up to expectations for you, then stick to it. The thought is to keep all costs in one easy area that will be anything but difficult to discover at a later date.
STEP 4: Make a list of receipt categories.
On your scratch pad, make a rundown of receipt categories that apply to your circumstances, for example, utilities, phone/cell, foodstuffs, auto repair, fuel, dress, entertainment, medical, home upgrades, travel, costs of doing business, childcare costs, advances, protection, contract installments, veterinary costs, substantial buys (i.e. PC framework, machines, and so on.), and internet services. Obviously, this rundown is in no way, shape or form comprehensive, and your specific classifications may vary.
You should have an envelope for your receipts separating them by category. It is helpful to have them label using a marker and masking tape.
STEP 5: Separate receipts from time to time.
Once you have the receipts divided by category, divide it by time; week or month. Anything not in the current date or year should be set aside and should also have their envelope.
Sealed each envelope that you have filled in and store in a safe place.
STEP6: Quickly file your receipts.
It is a very hard work and time-consuming on running a business, but it is important to record your business receipt as soon as possible. It can be a good habit to present your receipt at least once a week if you can’t in a day. Don’t just stuff them in your desk drawer and plan to tackle them later. It won’t happen.
Every time you get a receipt, file in its appropriate category as much as possible. Once you have organized the receipt you already have, keep all new receipt organized, too.
STEP 7: Provide its details.
Maintaining a small business is stressful, so recalling every purchase is about an impossible undertaking task. Before you document every receipt, take the time to staple a little bit of paper and after that record: the date, area, and why you made the purchase.
STEP 8: Never forget travel.
At the point when going to business, it is anything but difficult to free, lose, or neglect to acquire receipts with your purchase. Thankfully, there are a vast number of mobile applications to help you arrange all business travel expenditure. For those not very tech-smart, an great system is to keep an envelope framework for all travel receipts. When you return, make certain to record them immediately.
STEP 9: Always remember this while you’re out.
If you’re going out somewhere, keep an envelope on your car. Place the receipt in the envelope so you can’t lose it and file it away immediately when your home.
STEP 10: Have an extra patience.
Before placing your receipts in their respective business envelopes at the end of each month, you may want to add up the totals and mark them on the front of the company envelope.It is also helpful if you have a hard time keeping track of your budget as it will give you a clear indication at the end of each month exactly where your money is going.
STEP 11: Redo.
Continue the process from Step 1 to 9 for the rest of the year so by the end of the year, you’ll have all your receipts categorized and clearly labeled.
In conclusion, the key to organizing your receipts for your small business is making sure there’s a common sense workflow either with the software tools you’re using or your filing cabinet.