Receipt Keeping Tips for Every Small Business Owner
March 6, 2018
When you are a small business owner there are many things you need to consider to ensure you meet all your obligations.
One of the ones that seems to give business owners a headache is keeping documentation of their expenses.
Receipts can come in many forms and perhaps that is one of the reasons we find it so hard, they can be emailed to us, require downloading, give in a hard copy or not given at all.
So, it becomes a bit of an effort to make sure you are on top of them all the time. I want to help you simplify this and get a system working for you that will make this a smooth, manageable process.
Firstly let’s look at what you actually need to keep.
The Australian Tax Office outlines that “In general, you’ll need to keep receipts for all your business expenses. This includes cash purchases, receipts from cheque books and credit card vouchers” {source}
You might be thinking; pretty much everything and you would be correct. Receipts are the documentation that prove that you have in fact incurred an expense so if you are using it on your BAS or your end of year tax, then you need to be able to backup that claim.
These receipts must clearly state:
Who the purchase was made from
The amount and if it includes GST
Proof of payment
There is no requirement for receipts to be in a certain format but it is your responsibility to keep a record. You do not need to keep both a hard and soft copy either is fine for record keeping purposes. Remember ignorance is not an excuse for not complying.
A great place to start with receipt storage is your current accounting program. If you are using something like Xero or MYOB it is possible to store your receipts right there in the relevant transaction. If you are dealing with paper receipts it may be worthwhile looking at something like Receipt Bank so you can scan or take a photo of them and have everything together.
Another option if you don’t have an existing program is to use online storage like Dropbox or Google Drive. This is also handy for your bookkeeper or accountant to access easily.
Whatever system you choose to use there are a few questions to ask yourself:
Can you maintain it easily?
Does it allow you to access your documents quickly and easily if you need to?
Is there enough data storage for future needs?
Does it work for anyone else who needs to access them ie bookkeeper or accountant?
Is it streamlined and helping you create less work in your day?
Receipt keeping is an important aspect of any small business though it is often not considered until you are called on to prove a claim. Take some time today to consider if your receipt keeping system would help you or hinder you if you happened to have an ATO audit? If it would cause you a lot of grief and wasted time then maybe you need to make some changes now.
