With business bookkeeping and basic tax tips for new and old entrepenuers

Tuesday, April 7, 2009

Getting Those Receipts Together

OK, so now we come to receipts. The important thing is, that you make sure your receipts are readable, and if not, or if they tend to fade because of cheap fax paper being used (try the finger rub test, rub the receipt and see if it fades) or any other reason, make sure you write down the date and amount of purchase on the receipt, especially for any big purchases like furniture or computers as this information is needed on the tax return. The other annoying feature on some receipts is the length. Some stores like to give warranty or return information and/or advertising on receipts. I recommend you cut off that portion, unless you need the warranty info to reduce the amount of paper you are sorting.

I recommend that you separate receipts by month, and if there are certain categories that you regularly spend such as office supplies or cleaning supplies, bunch those together in categories. This also makes things easier as bookkeeping is done by categories. The categories depend on the business.

I generally ask my clients to simply stick the receipts in a large envelope by month to give me each month.

If you purchase any items by cash, separate those items from the other receipts. Again I don't recommend you buy too many things with cash because if those are lost or damaged, you have no record of your purchase.

If there are any items you purchased that you did not receive a receipt for, I recommend you make a receipt and put the sellers name and address on it. Sometimes sellers don't want to give a receipt, and that may help him but it doesn't help you, you need a receipt as proof of purchase, so either get one from them or make one and have them sign it at the time of purchase. If they refuse to sign at least make a receipt for your records.

Next, what are the expense categories?