Saving receipts for taxes and other expenses allows you to create a budget for your small business. This practice enables you to keep track of where your money is going. You’ll have an idea about which aspects of your operations need more resources. This also allows you to identify possible growth opportunities for your business. However, some small businesses lose their receipts for a variety of reasons. They need to organize these in a way that won’t misplace or lose their receipts.
Here are ways you can organize your business’ receipts.
Organize According to Type
When you are saving receipts for taxes and other reasons, you need to have a consistent way of organizing them. One of the things you can do is to sort them by type. Some examples are sorting them by separating the travel expenses from the office supplies expenses. This makes monitoring where you spent your money easier. You can also sort receipts by business investments, equipment purchases, and others.
Organized receipts allow you to identify which costs you can do without. This enables you to create a budget that saves your small business money. Tracking expenses provides you with information on which aspects of your operations need more resources. Improving marketing efforts, hiring new employees and developing products may require extra funding. These allow your company to grow and reach a wider audience.
One of the ways you can sort your saved receipts is by chronological order. This approach makes it easy to find a specific receipt for certain dates that you want to monitor. This allows you to monitor expenses within a certain month. It enables you to determine where your small business overspent and ways you can cut costs in the coming months.
A general rule of thumb when saving receipts for taxes and business expenses is to keep them for three years. Some small businesses do this because they might need to undergo an audit. You might also be considering a loan. Receipts show you can sustain the profitability and expenses of your small business.
Buy Equipment and Supplies for Sorting
Keeping receipts for taxes and others is important. You can invest in office equipment and supplies to store your business’ receipts. Purchase cabinets, folders and other items that can store and organize receipts. Put labels on the folders and cabinets so that it’s easy to find what you’re looking for.
You also have the option to store your receipts in the cloud or digital folders. You can scan the actual receipts and then upload them or use software to do this. Electronic folders don’t cost as much as purchasing new office equipment nor do they take up as much space.
You can combine storing receipts in a digital platform or office equipment. Make it a point to keep receipts as you get them. This allows you to organize them immediately rather than look for them when you need them.
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