Handling Business Receipts in Preperation for Tax Season 2012
Tax seasons is just around the corner and most of us (including my self) are starting to prepare for the upcoming tax season. We’re scrambling to gather all the receipts, organize them, and tally up the totals.
I’m one of the semi-organized people. I pile all my receipts into a box, and come tax season I pull the box out to begin the mad scramble of organizing my business receipts. Every year during tax season I promise to change my ways and become more organized. Sadly, that’s yet to come true.
In spirit of changing my ways, becoming more organized and productive, I’ve gathered some tips for handling receipts to keep them organized and prepared for tax season.
1) Info Filler
I established a very good habit early on about filling out my receipts. It took me a while to remember to ask for receipts, but once I got into the habit, everything else came together. For instance, when you buy something, write the date and reason for the receipt.
Feb. 23, 2012 / Lunch meeting w/Alex from Fast Signs
It’s essential to get in to the habit of doing this EVERY time. This way you don’t have to think about what that expense was for. Since you write your self a note, it’s very easy for you or your accountant to cross-reference when filing your taxes.
2) Easy Access
I fold all of my receipts in half. It’s easier to manage them and they take up less space. However, I fold all my receipts with a strategy. Always printed side up. This way the date and the vendor are easily exposed. It’s easier to organize them and all I have to do is unfold the stack once.
Establish a routine with your receipts. I stash my gas and food expense receipts in the car. At the end of every month I take them out of the car and add them to my business filing system.
My larger purchases/rentals or any other major purchase goes directly into my business filing system. This way I ensure that no big purchase gets lost.
4) Staying on top of it
Practice makes perfect and the only way to get better at something is to keep doing it over and over again. Organizing your receipts is no different. Staying on top of you receipt organization is a must.
We’ll always find something more important to do, unless we force ourselves to do keep at it on regular basis.
Lack of organization will only lead us to forget completely and miss out on a valuable business expense or personal tax credit.
I’m not perfect at managing my receipts, but I try to make a continuous effort at keeping my receipts organized. I’ll admit that most days it’s a pain in the ass, and I don’t like doing it. However, when tax season comes around, I’m glad that I was at least somewhat organized.
Readers, do you have a process of how you manage your receipts?