As entrepreneurs, we all know we’re meant to save out receipts. But I think we also know about the skeleton in the closet here…
Shoeboxes FULL of business receipts.
This might seem like a cliche in the business world, but let me assure you – people really do this.
I want to talk you through the easy steps of storing your receipts digitally, but first – why should you?
The reason you need to save your receipts
Simply, the IRS says you have to. The rule is that you need to be saving receipts for anything to do with your business.
There are three scenarios that they set out:
- If you’re filed a tax return that shows a profit, you need to keep all your receipts for 3 years
- If you’ve filed a tax return that shows a loss, you need to keep your receipts for 7 years
- If you haven’t filed a tax return – well, first, DO IT, and second – keep your receipts indefinitely.
You need to have a way to access the relevant history of business receipts to keep you compliant in case you get audited. Sure, there might be the odd one or two receipts that you’ve lost over the years, but that’s not the end of the world.
If you get audited and can provide receipts for everything else, it likely won’t matter if one is missing.
In fact, chances are you’ll never actually get audited. But you need to have those receipts in place in case you do.
Saving receipts in the 21st Century
First things first – I want you to step away from the shoebox!
You might be a real pen-and-paper person and want to keep your physical receipts. If that’s absolutely your preference, then go for it. But at the very least get a filing system in place for them!
If, however, you’re ready to make your life and business that much easier, wait till you see what you can do online!
As you know, I am a big big fan of Quickbooks Online, and their receipt management system is amazing. I want to show you how easy it is to save receipts digitally in QBO, but it’s probably going to help to also watch my live training here.
A digital management system is going to seriously reduce the clutter and chaos in your desk – and your mind. Honestly, a clear and organized mind is intertwined with a successful and manageable business!
If you just want to stop having a bunch of paper receipts, you can simply snap a photo on your phone and save it to an album with the relevant year or month. To make your life even easier, get into the habit of saving the photos to Google Drive.
But I want to help you even more than that… Let’s get organized with Quickbooks Online!
You can access QBO’s demo page to play around with without needing to sign up for anything. It’s really handy to get a feel for the system, and you can access it here.
If you’re ready to get yourself a QBO account and start getting on top of your business finances, I have a referral link you can use (full disclosure – I do get a commission for this).
How to save your receipts in Quickbooks
QBO offers three methods for saving your receipts, and they can all be accessed by clicking on the ‘banking’ section, and then ‘receipts’.
The first option is to simply upload the image of your receipt from your computer.
The second option is to connect your QBO account with your Google Drive. Remember when I said earlier about getting into the habit of snapping a pic and saving it to your Google Drive? Now you know why!
Businesses that are starting to scale and grow have reported how easy they’ve found the connection between QBO and Google Drive. It saves so much time when adding your receipts into the accounting software.
The third option within QBO is to create a special email address that you send/have all receipts sent to which will automatically upload them into the software.
All of these methods work great, you simply need to choose the one that works best for you and your time.
Whether you do it straight away, or save your receipts and set time in your schedule each week to upload your receipts, make sure you do.
Then your paper copy can go straight in the trash.
My main point here is that you need to have a system. You’ve been in this game long enough to know how important it is to have a process for every aspect of your business. Why should receipt storage be any different?
The beauty of Quickbooks
So, I’ve told you how to store your receipts in QBO – but why should you use this over any other system?
Because QBO does something really incredible.
If you’ve connected your business bank account to your QBO, then once that receipt is stored, the software will automatically find that transaction in your account! Suddenly, that transaction has the receipt attached in your P&L sheet and – BOOM! You’re audit proof!
You’ve saved yourself time and stress.
You’ve got less paper floating around to keep track of.
You can instantly see what your large expenses were for, and keep on top of everything coming into and out of your accounts.
You can make strategic business decisions!
If saving your receipts has become a chore, you’re never going to follow it through. But if you’re able to turn your mindset round and see it as an essential part of running a business? Then, with an easy system like Quickbooks, you’re going to keep on top of it!
How many complicated diets have you followed where you’ve given up because it’s too hard? How much easier is it to follow when you’re using simple ingredients and quick recipes?
That’s the perfect analogy for having a digital system in place for storing your receipts and keeping you on the right side of Uncle Sam!
If you have any questions or thoughts, or just want some advice, please reach out to me in the DMs.
Or if you’re ready to start finally taking control of your business finances, see what we can offer you over at The Chic CFO!