Finances| Money| Bookkeeping| Self Employed| Small Business| Entrepreneur

I have a deep, dark secret: my wallet is a disgrace. I wish I was one of those people with a neat and orderly wallet- but I’m not. I have a million different debit cards shoved in random spots, half used loyalty cards in my coin purse, and a bunch of gift cards with a balance of $0.78. The only thing that I’m even remotely proud of is my business receipts.

I’m the first to admit that sometimes my business receipts stay a little too long in my wallet. BUT they are the one thing in there with a dedicated place that I can find whenever I need them.

Because, true story, receipt clutter is a headache that no one needs.

And it isn’t even the physical annoyance of having tiny pieces of paper floating around your purse, wallet, coat pocket, and desk drawer. It’s also the emotional burden feeling like you should be more organized. Neater. More on top of it. A better business owner. 

It spirals quickly. All because of those damn business receipts!

So let’s get those business receipts under control, shall we? Let’s finally conquer those little pieces of self-doubt so you can embrace that fact that, you are indeed, a super rad business owner.

Here are 3 receipt management systems for your business receipts:

Accordion File System

How it works: This is the simplest system to implement and one that can transform that pile of receipts on your desk into an orderly system in less than an hour. You use an accordion file with 12 dividers as a mini filing system for your business receipts.

Each divider is labeled with a month and you throw all your receipts for that month into that section. At the end of the year, after you’ve filed your taxes, move all the receipts into one folder (labeled with the year) and start over.

And…..that’s it. It’s a really that quick and easy.

Pros: The biggest pro of this system is it’s the easiest to set up and implement. Sorting your receipts by month doesn’t take very long and can be done in less than a day. In ONE DAY you can have all your receipts organized. Pretty juicy huh?

Cons: The accordion file system requires physical space for you store the accordion file and the files of previous years’ receipts. If you have a small office or are going for a paper-free office, this isn’t the system for you.

How long you have to keep it: Hard copies of your receipts must be kept for 3 years.

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Digital Photos

How it works: Let’s talk digital. The easiest way to get started with digital receipt management is by photographing your receipts with your phone and saving them digitally. Just like the accordion file system, every year you make monthly folders and save the corresponding receipts to the folder.

If you save them to Dropbox or Google Drive, you’ll be able to upload the photos directly from your phone, cutting out the step of uploading the photos to your computer.

Pros: Digitizing your receipts means that you don’t take up precious space in your office with paper clutter. Some people feel lighter just by having less paper to store. Also, this method can be done on the fly- which means you don’t have to wait until you get home to organize your receipts.

If you’re using Dropbox or Google Drive, you have the peace of mind of knowing that you’ll never lose copies of your receipts.

Cons: It’s more time-consuming than just throwing your receipts into a physical folder. Also, if you have a lot of receipts to digitize, it can be a bit tedious.

How long you have to keep it: Like physical receipts, you should keep copies of your digital receipts for 3 years. Once you digitize the receipts, however, you can immediately throw away the physical copies.

Receipt Apps

How it works: Receipt scanning apps take digitized receipts one step further by creating an organized infrastructure for your receipts. You take a picture of your receipt and the app will prompt you to fill out key information.

Most popular accounting programs include apps that will scan your receipts. These apps sync with your bookkeeping and will match your receipts with transactions downloaded from your bank.

Here are my favorite receipt scanning apps:

Pros: Receipt scanning apps ensure that any important information is stored with the receipt. Since they require you enter in some info, finding receipts later is a breeze. Most receipt apps are cloud-based which means your receipts are automatically backed up.

Using an app that syncs with your accounting program streamlines your bookkeeping and keeps your financial data in one place.

Cons: Receipt apps are the most time-consuming to use. That doesn’t mean they take a TON of time, but typing out info on your tiny phone key board isn’t the speediest. Batch processing receipts with an app is tedious.

How long you have to keep it: Receipt apps will store you receipts indefinitely, which is much longer than the 3-year requirement! Physical receipts can be tossed after they are digitized.

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Business Receipts Best Practices

Regardless of what method you choose, here are some best practices for your business receipt management:

  • Keep receipts for all your purchase: The transaction on your bank or credit card statement is NOT enough. You need itemized records of what you bought, which is why you need to keep your receipts. A trip to Costco could be printer ink or groceries. Only an itemized receipt will prove that the purchase is a tax write off.
  • Make a home for your receipts: Choose ONE place in your wallet or purse to keep your business receipt. ONLY put your receipts in this one place- this ensures you don’t lose any receipts.
  • Memo your receipts: Write a short memo on all receipts about what you bought and why. It doesn’t have to be a novel, but it does need to have some context like “Fall 2017 Workshop Supplies.” Trust me- in 2 years you’re not going to remember this stuff.
  • Write who you ate out with: For Meals and Entertainment, receipts write a note about WHO you took out to eat and WHAT you discussed. Again, it doesn’t have to be long but it does need to be contextual. Here’s an example: Jenna, Teaching in her program
  • Save email receipts to a folder: For receipts that come in via email, you have two options. First, you can make a folder in your email program called [YEAR] Business Receipts and move digital receipts there. Alternately, you can save these receipts as a PDF to the receipt folders you have set up on your computer.
  • Use a descriptive name for your receipts: Instead of saving your digital receipts with a generic name like IMG009876, rename your receipts with a standard and descriptive name. I like to use NAME OF VENDOR_DATE (example: Amazon_7.31.17).

Which receipt management system and you going to use with your business receipts?