When you run a business, especially when it’s your home-based business, you will face some unforeseen challenges big companies do not. One of the greatest challenges in running your own business is the receipt department. We hear about it all the time. We hear it in conversations, at business seminars, at networking events, and yes, even from our family members.
“Hold on to your receipts!”
But why are receipts such a big deal?
And, just what are receipts anyway, and what’s their value?
Receipts are a written or printed account of an acknowledgment that X amount of money has been exchanged for X item(s). But why are they a big deal? Receipts are a big deal because when it comes time to prove your accountability for your business, receipts play a major role. The value in your receipts is that they are your financial credibility building blocks for your home-based business, and every one of them counts!
Now there are a few problems I’ve encountered with holding on to receipts for a whole year. Some, not all, do fade. The inks on some of those receipts are biodegradable and will fade by tax time, at least mine have.
Following are just two, of several, receipt-storing techniques I’ve learned from running my own business and I’d like to share them with you.
- Photocopy – if you are still using the older version of receipt storage called the file box, that’s great too. However, before placing those proofs of payment notes in your file box, you will want to make photocopies. You may collect them for a week or two and arrange them on the copy machine in the best manner where they are visible and all facing the same direction. Like putting a jig-saw puzzle together but allowing enough space between the slips for writing notes, or enough space to cut and sort if you plan to file alphabetically or numerically.
- Scan and Store – if you’re comfortable with using a scanner and electronic storage devices, you will be able to save paper and ink and store without a file box. This method allows you a variety of ways to scan your receipts. You can scan several at once or you may scan one at a time for different file categories. Whether you store on an external drive, a flash drive, or a jump drive, etc., or even on your computer, remember to give your file a tag for easier retrieval when tax time preparation knocks at the door. Tags are handy scan and store tools too.
Yes, I was surprised one year when I went to pull out my receipts for my accountant and they were literally blank. The look on my face was blank too. In the spirit of saving you the embarrassment and frustration with some receipts to prove your business expenses, you’d be wise to implement some of these receipt-storing techniques. They work wonders.