How to Organize Home Business Expenses
All business owners should keep their records in a filing system that can be quickly referenced. A simple filing system will help you organize your expenses so that you can find receipts and other documents when you need them.
- Difficulty:
- Moderately Challenging
Instructions
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1
Divide your yearly expense file into 4 master files, each covering three months of the year. Each master file is divided into sections such as utilities, Internet access, office supplies, insurance and repair costs. The master file can be divided into sections when you set up your system or at the end of your three-month cycle.
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2
File all receipts, utility bills and other deductible expenses as they are paid. Tape store receipts to a sheet of computer paper to prevent the small pieces of paper from being misplaced.
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3
Create a spreadsheet with titles such as utilities, office expenses, mileage and other business related expenditures. Organize your computer files by using a descriptive naming convention.
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4
Record your expenses on the spreadsheet regularly. Note the date the expense was incurred, the amount and the type of expense.
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5
Organize each master file after you have recorded the data. Do not throw away the receipts.
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6
Verify the information contained on your spreadsheet against the actual receipts in your files at years' end. If an expense cannot be verified, delete it from your records.
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7
Bundle your files, including your spreadsheet, and prepare your taxes. Better yet, give the entire packet to an accountant.
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Tips & Warnings
Attach business receipts to used computer paper. Note the amount and type of expense in red ink to make verification easier.
Master files can be organized by using paper clips to separate bills and keep the file organized.
Record mileage and travel expenses in a book kept specifically for that purpose. If you map your appointments on a computer, keep a copy of all appointments and file a printout of your search in your master file.
Review the Internal Revenue Code for a complete list of deductible home business expenses.
