As a business owner, if you want your small business to run smoothly and efficiently, you must have a good organizational system in place. One of the biggest challenges when it comes to organization in a small business is storing business receipts. In order to keep track of your spending, file taxes properly/accurately, survive an audit, and monitor your financial health, it’s critical to find the system that works for you.
You may find that it’s best to hire an accounting firm to handle your finances. This will allow you to focus on other areas of the business. If your business is located in or near Cincinnati, let Orcutt & Co. help. We are a small business and specialize in working with small businesses. We can help you get organized.
8 Receipt Management Options
Below, we’ll explore 7 options for storing business receipts:
Use a Business Bank Account
Many business bank accounts/financial services include features that can help with organizing your finances. The best thing about using a business bank account is that the features are linked and can be mutually beneficial.
For example, some accounts allow you to take photos/scan your receipts and upload them. They are then organized and sent to your accounting software.
Establish A Spend Management Plan with Your Team
When you have employees, you must also be clear with them regarding business expenses and storing business receipts. You must establish rules for organizing expenses including:
- Daily/monthly/quarterly expenses
- Travel expense reports
- Improvement expenses
- Training expenses
- Infrastructure expenses
- Other expenses as appropriate
Establishing a spend management plan with your team allows you to save time, optimize costs, reduce fraud, and remain in compliance with federal regulations. Steps for establishing a spend management plan include:
- Define appropriate expenses, label categories, and set a budget limit.
- Create fair spending allowances for employees
- Keep spend management policy simple and easy
- Update spend management policy as needed
- Remain in compliance with local and federal regulations
- Use software to automate and simplify expenses
Scan/Digitize Your Receipts
There are lots of advantages associated with scanning and digitizing your receipts, including:
- Reduced clutter
- More control over finances
- Increased security
- Improved accuracy
The best way to do this is with your smartphone. Most apps will allow you to link all devices and scanning with your smartphone can be done on the go. Here’s how:
- Take a photo of the receipt with your smartphone’s camera
- Convert to the file type of your choice (jpg, pdf, png, etc)
- Send to your cloud-based storage
Once this is done, you can either destroy the physical receipt or store it in your physical files in case your account is hacked, or the information is lost for any reason.
Establish an Easy-to-Manage Filing System
Your receipt management will depend on your personal preferences. The easiest option is digital storage because you won’t have to worry about keeping up with a bunch of physical receipts.
There are lots of options on the market for digitally managing your receipts. In order to determine the best one, you’ll need to consider the following:
- Do I want the software to automatically organize receipts, or do I want to do it myself?
- Can the software be linked to my finance department/accountant?
- Am I looking for an all-in-one app or just an app that scans receipts?
- Would it be better to scan and store the receipts myself in a cloud-based storage?
Create Back-ups
If you don’t necessarily want to store your receipts online but you don’t want to keep physical copies either, you can scan and save them to a folder on your computer. This will protect your information from cyber threats or other issues.
Regularly Review Receipts
As a business owner, it’s important to have a clear picture of your spending. The best way to do this is to regularly review your receipts. This will also help you prepare your paperwork in the event of an IRS audit. There are a few things to keep in mind when reviewing receipts.
Timely
Reviews should be handled on a routine basis. You can choose to do your reviews monthly or quarterly. This makes it easier to follow up if any information is unclear or missing.
Avoid Rushing
If you rush through the process, a receipt review is pointless. You want to establish a system that is thorough and efficient- and gives each receipt the attention needed.
Level III Data
The most data that can be put on receipts is known as level III. While this won’t be necessary for all transactions, there are certain ones that will require this level of information. Determine the info needed on each transaction and, if you discover missing information, contact the merchant.
Train Employees in Receipt Handling
You may find that your business expands to where you can delegate receipt management to another staff member. Some things to keep in mind if you do this are:
Dedicate a Team/Employee
Dedicate an employee or build a team to receipt management. This will ensure that you have the right people working on the task, as well as increase accuracy.
Ensure They Have What They Need
There is lots of specific information needed for receipt management including company budgets, expense policies, required data levels, and more. Make sure that your finance team has the information they need to ensure accuracy and efficiency.
Implement Automation
The purpose of automating tasks such as this is not to put your finance team out of a job but to make the task easier. Automation can help with keeping track of receipts, incorporating all financial data together, and automating some of your bookkeeping tasks.
Orcutt & Co. Can Handle Your Bookkeeping Needs
As a small business owner, it is critical that you are involved with your business. However, this does not mean that you have to do it all. There are things that you can do when it comes to storing business receipts to make things easier. If your business is located in or near Cincinnati, Orcutt & Co. can help with your business finances including receipt management, payroll, tax prep, and more. We are a small business, so we understand your unique needs.
