How to Organize Business Receipts

Organizing your business receipts will streamline tax preparation.

When running a business, it is vitally important to save receipts for business expenses. Many items are tax deductible if used for business, such as office supplies, equipment and postage. To receive the tax benefits, you must be able to show receipts as proof. Keeping track of business receipts may seem like a daunting task, but creating a system to keep your receipts organized will simplify tax time and reduce stress and anxiety. It also ensures that you do not miss any valuable deductions.

Things You'll Need

• Organization system -- e.g., accordion file or software program
• Business receipts
• Pen

Instructions

1. Determine the right organization system for your business. Smaller businesses or businesses with fewer receipts can use a system as simple as an accordion file. If you have more receipts to manage, purchasing a software program may provide the most benefit. No matter what option you choose, avoid the shoebox method. It is neither organized nor efficient.

2. Write a note on each receipt indicating what the purchase was, if it is not clearly visible on the receipt. Some receipts are vague in the description and at tax time it is important to distinguish what each purchase was for.

3. File your receipts daily, weekly or monthly, depending on the number of receipts you have and what works for you. If you choose to file the receipts less often and use a software program that scans and catalogs the receipts, keep them in an accordion file so you don't lose them. Keep a small accordion file in your purse, briefcase or car to store these receipts so they don't get misplaced.

4. Mark your receipts with a checkmark and the date as you enter them into your software. This simple step will eliminate confusion later in the year if you're not sure what receipts you have entered, in case you missed any.

Tips & Warnings

• Some online companies allow you to mail your receipts to them for scanning onto a password-protected site if you prefer to have someone else do the work for you.

• Consult with your accountant for specifics regarding purchases that are tax deductible as business expenses and those that are not.

References

• Main Street; How to Organize the Receipts You Need to Save; Sean Leviashvili
• The Washington Post; How Do I...Organize Records Needed to do my Taxes?; Sharon McLoone
• The Wall Street Journal; Ways to Keep Track of Your Receipts; Paola Singer
• IRS: Why Should I Keep Records?
• Basic Accounting Help: Seven Business Records Management Tips