The first step in effectively keeping track of business receipts is in knowing what qualifies as a business expense.
Check your country’s revenue or small business site for examples of qualifying business expenses. For those of you living in the US, see this page for some examples of small business tax deductions.
Tips on Efficiently Tracking Receipts
OK…now let’s look at ways to set up a workable system for keeping track of business receipts:
- Know what type of supporting documents you need to keep. See this page for a list of those business records such as canceled checks, cash register tape receipts, and credit card sales slips.
- Keep personal and business expenses separate. When I pick up office supplies along with other personal items, I always ask the clerk to ring up my business purchases separate from my other purchases. It is a lot easier that trying to highlight my business expenses purchases on a cash register tape receipt and then figuring what portion of the sales tax should be applied. I also use a separate checking account or credit card to pay for those business expenses.
- Always look at your business receipt as soon as you get it and make sure it printed off okay and all imperative information can be seen clearly. As soon as possible, circle the date on the business receipt. If it was for a business meal, turn the receipt over and write the name of the client or business associate and purpose of meeting on back.
- Another important step in tracking your business receipts is getting into a habit of organizing receipts as soon as possible. If it was an online receipt create a folder for it or put in folder named business expenses. Print it out as soon as possible and file in the appropriate place.
See seven business management tips for keeping track of business receipts.
Besides paying more than your fair share in taxes, you also can not accurately analyze how well your small business is doing without tracking those business receipts.
So get into the habit of always doing something with that business receipt each and every time. It’s worth the little bit of effort!