Keeping track of your receipts is crucial for having an accurate view of the financial position of your business. Without your receipts, you have no way of confirming how much it costs to run your business and you cannot claim any expenses for write-offs come tax time.
Here are four ways to ensure that you never lose track of a receipt again:
1. Use a receipt capture app, like Dext
A receipt capture app such as Dext allows you to store your receipts electronically. Not only does this make it easier to find your receipts in the future, but it also ensures that you have a record of your receipts in the best condition possible. Paper receipts degrade over time. Depending on how they are being stored, may become entirely illegible. This could cause a great deal of stress if you were to be audited by the Canada Revenue Agency (CRA) only to find that you can no longer read your receipts. Dext allows you to take images of your receipt via the Dext mobile app. This way you can file your receipts electronically right when you get them.
2. Create a system
Create a system that works for your business. This might look like having a labelled envelope that you put all your fuel receipts in after uploading them to Dext, or a filing cabinet in the office that is labelled by different categories and/or months and years. It could even be stapling a receipt to the relevant paperwork after uploading it to your electronic filing system. Whatever your system may be, make sure that it is working for you and that you aren’t working for it.
3. Make notes on your receipts
Write notes and reminders on your receipts before you forget any relevant information. Having lunch with a client? Write down their name and what you spoke about on the receipt. This will help your books stay in order and help you answer questions if you get audited.
4. Be consistent
At the end of the day, it doesn’t matter what you decide to do if you aren’t consistent. If you are audited by the CRA, you want to be confident in knowing how to find every single one of your receipts. This is something you want to consider when building your system.
If you’re unsure what system will work best for your business, try consulting with your bookkeeper and accountant to see what they recommend. If you are doing your own bookkeeping, try consulting with other business owners who work in a similar industry to yours or even discuss with your own employees to see if they have any suggestions for how they would prefer to handle their receipts.