Receipts!!! Those pesky receipts!!! They are everywhere and then when you need one, you can't find the little bugger. You do your best to keep them in a shoe box or manila folder but they do escape lol. You ask yourself "Why do I have to keep these? We never get audited."
I can tell you why.
When you make a purchase, whether it is with cash, a check, a debit or credit card, you are given a receipt. This is an ITEMIZED listing of the good and services you purchased. This listing WILL NOT show up on your bank statement and therefore, that little piece of paper has just become an important financial document for your business.
To illustrate why it is so important, imagine the following scenario:
You are in an office supply store. There you purchase the following:
- 2 - 10 pack reams of paper
- 3 - CMYB Toners for your Printer
- 10 - 12 Tul Pens
- A car phone charger
- 2 - 20 oz Mountain Dews
All totaling $345 (estimating for the scenario). This includes Sales Tax. Imagine you have just now tossed this receipt.
It is not month end and you are downloading your bank information into your accounting software. You see this purchase from the office supply store and you categorize it all to Office Supplies expense. You have now, erroneously increased your tax deduction for this expense and it can add up which will then trigger an audit. The earbuds you bought were for personal use as well as the charger and the Mountain Dews. This over $100 in personal expenses that the company needs to be reimbursed for and the Office Supplies expense account needs to be adjusted.
Now, imagine this happening with multiple expense accounts.
You can now see why that little piece of paper is so IMPORTANT.
"How do I keep track of them? I have so many!" There are dozens of receipt management apps out there. These applications allow you to scan your receipts barcode or QR code, or simply snap a photo of it. Once the photo is taken, you can upload it to the application's cloud based folder under your email address or simply email it to your bookkeeper.
This can be done without the use of an app, however there are some benefits to utilizing an application. For more info on receipt management or to incorporate the application that works best for you, click HERE to schedule your 15 minute Discovery Call.