If there is a constant in the business world besides taxes, it is the need for documentation of everything. Whether it be an audit or return of an item purchased, there will likely be a need for proof. That leads us to business transactions and the storage of receipts. For those that have ever done an expense report, then you know the importance of keeping receipts, even if it is a five-minute taxi ride.
Luckily, today there are many products that allow individuals to take a snapshot of the receipt and store it on a system. For those of you that are a bit more classic, physical storage of receipts is still an acceptable business practice. Either way, as long as you can pull a copy when requested you are good to go.
First, a reason to store receipts is to document transactions and expenses. It can become easy for a business to spend money and lose sight of where cash is flowing. By keep receipts, you can begin noticing where your cash is flowing and adjust. With the growth of smartphone technology, many applications will sort and store your receipts, allowing you to seamlessly be financially organized. Look into your current accounting system and see if there is the ability to integrate. More times than not, you can find a product to attach to your already existing system.
Secondly, if you still retain the physical receipt, you may want to make copies due to the nature or receipts. They tend to breakdown or wear away as time moves on, and if you are searching for proof of purchase a year later, you may find the print to be illegible. Monthly folders too will allow you to quickly identify time periods instead of searching in a proverbial shoebox for receipts.
Lastly, storage of receipts simply keeps your expenses in order. If you need to charge a client for travel, having a well-documented paper trail will leave your business looking professional. Also, it is important to have this available to your employees, given many business related expenses are expensed to the company. Should you still use the tried and true system of copying, it may benefit upgrading to a system that organizes and stores those for you, saving time and money.
Something that is typically overlooked in the age of technology still plays an important role in the business world. When in doubt, save any documentation of a transaction because you never know when you will need it. Whether it’s digitally or physically, saving these should be in your company’s procedures. Should the taxman or revenue service come around for an audit, they surely are going to require documentation.