Many small
business owners pay for business expenses out of their own pocket and
forget about recording them in their financial books. This is a
problem because for an owner to maintain good financial records, he
needs to keep track of ALL expenses. The consequences of lost or
incomplete records can be dire: incomplete records can mean thousands
of dollars in lost tax deductions.
To avoid
committing this bookkeeping no-no, you need to keep all your receipts
and tax invoices. Here are tips to help you do so:
Keep an
envelope
One way to
keep receipts organized is to keep them in an envelope and store it
in a strategic place. You should then set aside a schedule when you
will enter your receipts into your accounting program.
Take a
photo of your receipts
If you
prefer to pay with cash, make an effort to whip out your phone each
time you purchase something and take a photo of the receipt. Save
these photos in a separate folder to avoid deleting them
unintentionally. You can name the folder ‘2014 tax time’ so you
can identify the folder easily and to remind you of what you intend
to use it for.
Use an
app
There are
smartphone apps that can help you scan and store your receipts. Try
to test at least three apps, choose one that works best for you, and
start using it.
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