5th December 2020

What to do with all those business receipts

a system for filling business receiptsThis is always a problem when you are running your own business. They can quickly turn into a big pile of unorganised paperwork. It may be tempting to put them into a large envelope or plastic bag to give to your accountant, but don’t! it will cost dearly in the long run especially if your accountant/bookkeeper charges by the hour.

Don’t throw them away or just dump them into a box or large bag. Here is a simple system my clients have found works for them (and saves me time). It is easy to do and only takes a few minutes. By using this system you will also have all your receipts in one place should the dreaded taxman come knocking!

What you need before you start.

  • You will need at least 12 plastic wallets (the type that will fit into a ring binder) and label them with each month.
  • A ring binder
  • Blank pieces of paper
  • Stapler
  • Highlighter pen

Step 1: Organising your receipts

  1. Write on the receipts ‘cash’ or ‘chq’, ‘bacs’ , ‘credit card’, ‘PayPal’ – whatever method of payment you used.
  2. Underline the date and highlight the VAT (if you are VAT registered) – this helps to save you time (or your accountant) when making the up the accounts.
  3. If the receipt is missing use a piece of paper to write on the amounts and details as to what the expense was, the date, the name of the person/business paid, and method of payment.
  4. If a receipt is online then print it out and mark it up as above (and file the online version in a folder for the appropriate month)
  5. simply add the receipts to the wallet for the month, in your ring binder.

Step 2: Process the receipts

This is where you will either input them yourself into your accounts package/spreadsheet or send them to your accountant for them to process for you.

Step 3: Filing and storing your receipts

Once they have been processed, file them in you ring binder in alphabetical order in a section marked ‘complete’. I suggest alphabetical as they are then easy to find should you need to refer back to them.

Small receipts from a till roll can be clipped to an a4 sheet of used paper – Several can be attached to the same sheet (for example, fuel receipts from Sainsbury’s can be stapled to one piece of paper and filed under F for Fuel).

This system is keeping you organised, and also you know which receipts have been processed and those that have not. Should a receipt turn up later in the year it can be put into the correct wallet and not be muddled with other receipts.

You can also adapt this system for larger quantities of receipts – simply expand the number of wallets and maybe even have more than one ring binder.

What about invoices where you have 30 days (or more) credit?

You may have a number of invoices that you do not need to pay immediately as you have 30 or more day’s credit. These would need to be filed in date order and once paid put into the system outlined above. This will allow you to have a quick reference to any outstanding invoices and can be looked at on a weekly, monthly interval to ensure they get paid on time.

Why you (and your accountant) will love this system

This system will take a little of your time but in the long term will save you and your accountant’s time (save money), ensure that every receipt is claimed as an expense (saving more money) , give you accurate records and improve your cash flow figures.

It also ensure invoices are paid on time (save fines and keeps your suppliers happy), gives you better credit ratings and removes anxiety.

You will therefore make more money and have less stress …….

Please get in touch if you would like some down to earth accounting help.