Easy Tips to Organize Your Expenses
If you are like every other small business owner out there, you probably started the year off with good intentions of keeping your paperwork and expenses better organized this year. After all, you remember how painful dealing with disorganization can be when it’s time to do your taxes.
Even if you do manage to stay on top of your books, or have a bookkeeper to take care of the day-to-day transactions for you, there are still all of those loose receipts that get in your way. Do you enjoy going through your credit card statements and canceled checks to figure out what each expenditure was for? Probably Not. Here then, are a few tips to help you keep on top of things this year, to avoid the gut-wrenching task of trying to collect and organize your expenses at tax time.
Always Get a Receipt
It’s easy, in the age of tapping to pay, and mobile payments to lose track of some of your legitimate business expenses. Make sure to always get a receipt for everything you purchase. Those small amounts can add up to a lot by the end of the year!
Remember to Make Notes
Take a couple of seconds (that’s literally all it takes) to write a note on the receipt so that you can easily remember what it was for. You don’t really have time to be puzzling over receipts later because you didn’t bother to write it down when you made the purchase.
Take a Picture and File it
Now you have a thousand tiny pieces of paper all over your desk (and on the floor, and in your car, or at the bottom of your purse). Try this instead—snap a picture of the receipt and email or text it to yourself, or simply save the image on your phone or in a cloud storage location with all of the other receipts you’ve snapped. There are plenty of apps for your phone that you can use that help you store receipts electronically however if these tools are more than you need, you can still manage it easily on your own.
Categorize
If you think about it, there are really only a few different types of expenses that your business requires. Take a look back at some of your previous expenses, or work with your accountant or bookkeeper to determine what categories you can break your expenses into to make them more manageable. Then, make a note of the category on your receipts, or create folders to sort the images you’ve snapped.
Be Consistent and Stick With it
Everyone starts out the year with good intentions to be better organized than they were the previous year. When you have a plan and a process it really isn’t that hard to follow through. It just takes a little bit of will power to consistently do the little things like jotting down notes and taking pictures of receipts. You’ll be proud of yourself at the end of the year when all of your expenses are neat and tidy. It may even save you some money in bookkeeping costs and makes tax time much less intimidating.
E&Y Insurance and Tax Agents are dedicated to making tax time easier for our clients, providing expert advice, tax planning and preparation. We also help by providing all kinds of insurance to meet the needs of individuals, families and businesses in Troy, Birmingham, Rochester, Rochester Hills, and Royal Oak, Michigan. Call us ay (248) 362-1313 to talk about your insurance or tax preparation needs.
