Organizing your business receipts for taxes

Organizing your business receipts for tax time.
Whether you are preparing to do your own taxes or sending them off to a professional service, it is always a good practice to keep all of your receipts in order on a regular basis as this will save you time, money, and the agony of doing this at the last minute. Develop a method and follow it diligently, this will ease the burden at the end of the year or around tax time.
You have many options today to help you organize those receipts and time and effort will be the deciding factor as to what system you will adopt. You can set up a manual filing system, create an electronic document filing system and scan your documents, or outsource the task.
Small receipts are unavoidable such as cash register slips, store receipts, or credit card slips. They are not always clearly defined as to what was purchased and the dates can cause some concern over the month and day depending on the convention used such as 2011/07/08, is it July or August? Most retail stores in Canada work with day, month and year. Begin with writing the date on the receipt and the item you purchased. If you are folding the receipt, fold it with the printed side open to view especially when traveling, it takes very little to mistake it for just an old piece of paper. I always put all my travel receipts in an envelope and take care of writing down the information immediately until I scan them. You can also take a photo of the receipt and send it to your office in case of loss. However, the copy should be clear and easily read. Keep all your paper receipts. You may want to verify that all is entered in your system properly.
Basic System:
To organize a manual filing system for your receipts, you can do this by purchasing coloured hanging folders with each category written on each tab, which can help you with quick filing or you can also slip them in an accordion file by main categories under each tab. Add up your receipts monthly and attach the subtotal to the receipts by month.
EXCEL:
If using Excel, create the main categories and enter your receipts with all pertinent information, date, item, store or company, notes, category and sub total for every month or at the end of the year. You can simply file them in their appropriate folder by category with the monthly sub total. A bit more tedious and does require discipline.
Scanning and creating electronic folders:
If creating electronic folders, create the categories, scan the documents, rename the image and drop them into the correct folder. Keep the paper copies and calculate the monthly or quarterly total. Send the attachment to your email or mail your lists organized by category with total amounts for each category.

Categories:
Major categories to consider when developing your folders: assets, associations/memberships, auto/fuel catering , bank/checks, CD and books, conference and meetings, entertainment/restaurants, invoices paid, gifts, marketing material, office equipment, professional courses and training, professional services, purchase for resale, seminars and workshops, shipping and postage, travel expenses, utilities etc.
Outsourcing:
For the small business owner, time can be a factor and for others, it may simply be that they prefer to put everything in a box and leave it to someone else to work on it.
You can select a service and outsource the task. The documents are usually mailed to be scanned and returned to you within a short period of time. However, inquire as to what type of tracking system is in place, does the company provide a tracking file of your parcel or envelope or is it tracked by the postal service? If you are concerned with the loss of receipts and documents by sending them off in the mail to a service, find someone who may be able to do this for you in your own business community.
Portable scanners:
Today, there are wonderful choices for scanners with a software program included, which saves a lot of time with setting up categories. Find out if they allow you add and tailor the categories for filing. In most cases, the software program is compatible with various accounting software programs. Ask your accountant or bookkeeper for the accounting software program they consider to be the best.
You can also purchase a small scanner if you prefer and scan each receipt immediately at your office. If you have a small portable scanner, you can scan your receipts and send immediately to your office when traveling or after meetings outside your office.
Portable scanner:
Visit this Website for some of the tips and more information on selecting a portable scanner.
Source: http://www.squidoo.com/travel-scanner#

Francine Renaud Records Management Consultant http://www.timeouttoorganize.com/
Tel: 250-763-3988