Keeping a record of credit card statements or any business transactions is key to making sound financial decisions especially for business owners. Receipts are proofs of documenting all expenses incurred to facilitate daily operations. Without a properly filed receipt of your business expense, you have lower chances of reducing your tax obligations.
Maintaining a routine in recording transactions can be taxing and complicated but can be very advantageous in more ways than we all can ever imagine.
That is if you are still keeping a bunch of file folders or using a traditional filing system.
1. Keep all receipts.
This point cannot be overstated. Developing a systematic process of filing receipts can save you a lot of time and money if you’re audited.
2. Make notes on receipts about their business purpose.
This is an especially great idea for dining and entertainment expenses. It can be easy to recall why you bought a copier, but without a note, it may be difficult to remember who you went to dinner with and what the business purpose was (in 2011, when it’s 2014).
3. Scan receipts and keep them at least six years.
This is helpful because the ink on a receipt may fade. If the IRS cannot read a receipt, it’s your issue, not theirs. The IRS allows electronically stored receipts. However, it’s probably a good idea to back-up stored receipts because if your hard drive crashes, the IRS won’t care.
4. Take a picture of receipts with your smartphone.
This is a great idea and there are a number of apps that can assist you. With today’s technology, it’s easy to “Make a note on the receipt and then take a picture of it”. But remember to backup thoses app files too.
5. Have your receipts emailed to you, if offered.
This is a great idea and a number of vendors offer this as a service to you.
3. Contact Us
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