Are you constantly shuffling through your receipts in your purse or do you have a drawer full of invoices and papers? Are you trying to get rid of them? How about just ending the clutter once and for all and start managing them appropriately?
Keeping track of your expenses can be a challenging task, whether you are a business owner or managing your household budget. Generally, businesses hire an outside source for bookkeeping. However, if you are running a household, hiring a professional might not be an option for you, which is perfectly fine. Some may think that these small pieces of paper are nothing more than trash. However, when it’s time to do your taxes, these pieces of paper can help you tremendously.
After doing a little research, we will discuss a few tips and ideas on how you can end the clutter and be more organized with your receipts.
Mobile Apps/Online Services
We all know that technology has taken over the world. Our life has become so dependent on phones and computers that we cannot fathom living without them. To your benefit, you can download apps that will help you organize your receipts and invoices. Online services like the Cloud are also very useful. Some apps allow you to migrate all of your information to online services that can save you from hassle. If you are a tech-savvy person, this might be the best option for you.
Tracking your business expenses can be difficult, especially when you have to report specific information. For example, you plan a dinner for your employees and spent $200. When sharing this information for bookkeeping purposes, you have to be very accurate with the information such as how many employees were there, what their job title is, date, and place of the dinner. You can simply write this information on the bill/receipt or get a journal to write the information down in and attach the bill with it.
It’s an old-school style, but if you plan to claim your expenses from the IRS, you definitely need receipts for the record. You can make a separate folder and place your receipts in them. Receipts that are months old may fade away with time. Or, if for any other reason, you are unable to read your bills/receipts, what is your alternative? Always make sure to keep a hard and soft copy of your invoices. Take a picture from your phone or scan your receipts. Make a backup folder in case your system crashes.
Categorize Your Receipts
Categorizing your receipts is another good way to organize them. Let us say that you have a credit card that is used solely for business purposes. Whatever transactions you make on that card, keep the bills according to the specific items; credit card statements just give you the numbers in a lump sum. For example, you purchased office supplies three times in a month and purchased furniture twice a month, keep the bills separate. It is going to make your life easier if you categorize your individual purchases because, if you plan to show it to the IRS, they will want to see the details rather than just a credit card statement.
As mentioned above, managing your expenses is not an easy task. Even if you manage a monthly budget for your home, start organizing your receipts. Do not throw them in your wallet or drawers, as they will end up cluttered and untidy. You do not have to be perfect. Just get yourself a folder, categorize it using tabs such as grocery, utilities, etc., and every time you make a purchase just keep your bills/invoices/receipts in it.
There are many different options for organizing your receipts; it is up to you to decide which one works best for you.
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