A buisness’s failure to track its money transactions is not far from collapsing. This is especially true when it comes to most startup and small businesses.
But how can you have a smoother and more organized expense tracking?
Through your receipts! We have listed down the ultimate guide to receipt managing and expense tracking.
Receipts may be a pain and it’s easier to just let them spin out of control. But whether you’re a brand new business or already an S-Corp, good recordkeeping means you should keep your receipts well-organized.
Keeping a record of your receipts will help you monitor your expenses and gain. From here, it should be easier for you to determine how your business progressed.
In your record, prepare your financial statements, list down the sources of income/profit, trace your deductible expenses, prepare your tax returns and support items reported on your tax returns.
But not all receipts should be kept for these tracking.
As a small business owner, here are the important receipts that you should keep for your expense-tracking:
You should keep all inventory receipts from buying goods you are to re-sell or materials you will use to make your products. This kind of receipt should have details of the payee, the amount, and proof of payment for the items. If for some reason you can’t get a receipt, make an invoice that the supplier should sign.
Since you are starting, you need to keep track of all your initial expenses. This will later dictate if you already earned your ROI. Your assets include the property you own and use in your business like furniture, computers, vehicles or machinery, building or rented commercial space. This will also be important when you do an upgrade or should you sell one of your assets.
Most of your receipts will likely come from your expenses other than your assets and inventory.
The needs of every business may be different but there are common purchases that each might mke. This includes:
- Advertising – web hosting, business cards, ads in magazines or online, billboards, etc.
- Car and Truck Expenses – including gas and maintenance
- Education Expenses – training for trend or technology updates
- Networking – conference, tradeshows, summits, parties
- Office Supplies – Printer paper, staples, paper clips
- Professional Services/Contractors – contracts with third party service providers like a graphic designer to design a new logo
- Travel Expenses – plane, cab, bus, train, ship, etc. paid for a client visit s well as hotel rooms, food, etc when attending a conference.
These might seem few but as you go on for a year of operation, you’ll be surprised how it can be a lot to keep.
One smart way of eliminating the papers while still keeping your relative expenses well-monitored, is going paperless.
The trend in every business today is to go paperless. Hard copies are being scanned to get digital copies of any paper documents. This can also be efficient in managing receipts. With the boom of technology, we can just hit on CTRL+F on our desktops and we can easily find the receipts we are trying to look for.
- Scan your receipts, save them on your company drive or cloud and keep them at least six years.
However, it’s probably a good idea to back-up stored receipts because if your hard drive crashes, the auditors won’t care.
- Take a picture of receipts and comple them on an excel file. You can even use your protected cloud to store thedocument. You can even insert comments for important notes.
- Instead of storing your captured or scanned receipts in a drive or cloud, you can have them emailed to you too.
- Avoid cash and use credit and debit cards so you can later get a detailed monthly statement from the bank.
- Get an accounting software – other than Excel – to handle your small business expense tracking needs. Professional accounting solutions providers usually have their own software they use so research and choose the most reliable and user-friendly one.
Paper Receipts Plus a Bookkeeper
You can opt to keep your paper receipts too but you will need to consider hiring a bookkeeper to have them properly organized and documented.
If accurately tracking all your company’s expenses starts becoming a burden to your schedule or if you can’t seem to get a handle on it, consideroutsourcing a bookkeeper who will spend time every month going over your receipts and invoices. A good bookkeeper is worth the cost if they keep you out of trouble with auditors.
Free yourself from the stresses of losing important receipts that will keep you out of trouble with auditors. Manage your receipts well. Need more business tips? Contact us today at https://ecommercecorporation.biz/.