Starting a business, doing what you love or have always dreamed of doing? It can be an emotional ride. Congratulations are in order for taking the big step and following your vision! As reality sets in, accurately and adequately juggling all the roles yourself until you can hire people to do it, is ever before you. Especially in building and maintaining a financial system that will sustain you and help you grow. Staying on top of inventory. Managing different accounts, accounts receivables, payables, organizing, collecting, and storing your business’s financial records among other processes...these are activities every good bookkeeper does on a daily basis.
If you are good with numbers and organization, building a receipt management system may be a welcome challenge. Here are some quick tips to get you started, or to use as a measuring stick against what you've already built.
- Avoid major headaches. Ask yourself, do you really want to be that person logging a quarter (or more) of receipts December 28th for your taxes?
- Be disciplined. Managing receipts daily is best, while information is fresh in your mind.
- Establish a routine. Mornings? At end of the day? As you receive them? Routine management makes it a second nature activity, and ultimately painless.
- Create a system for managing. Which tools will you use? On paper, in an Excel workbook, or in a bookkeeping software? Digitize receipts? Store hard copies?
- Develop a process. Where do you put all new receipts? Where will you store tracked receipts? Who has access? How will you report off financial information?
- Categorize receipts appropriately. Calculate mileage as it relates to the receipt. Is it for office expenses? Product related? Retain any pertinent information that will help you analyze the information at the end of your fiscal year. Not only will it satisfy tax requirements for deductions and write-offs, it will also help you solidify budgets, plans for repeat expenses, identify waste, and more.
- Secure, secure, secure. For yourself, or your tax repairer's well being, secure the tracked receipts. As mentioned, whether digitally, or in hard copy format. Natural disasters happen (floods, fires, bad weather), ensure you have what you need when you needed it, for either insurance, tax purposes, or audits. Fireproof storage, under lock and key, is never a bad idea.
Creating a great system and following it daily will eventually give you the kind of intel you need (like when you can afford to hire a bookkeeper) and lets you focus on other things you love about being in business for yourself! And when you are ready for the next step, like hiring an accountant? It will be a great feeling to hand over a solid system to take you to the next level.