Most American business owners do realize the importance of receipts; however, you can observe most Americans saying “No” when they are offered a receipt for their purchases. Do they wish to collect these receipts and save it because they want to forecast market trends? Not really, they want to avoid tax return perils, therefore they keep them collected in one place. Receipts are audit protection and for some, it is a serious concern.
Paul made a number of purchases during the last year and forgot to collect receipts from multiple stores. He went around the world expelling thousands of dollars on travelling, food, entertainment, cellular services and other expenses. What he failed to realize is that he will have to face tax files, paperwork and documentations to financial sectors that they were business related.
Sadly, Paul is one of the many individuals who failed to realize the importance of keeping receipts in one place. Now, he is left with questions to ponder and answers to present to the auditors of expenses, while they are left out in the cold. Gathering receipts can be a tiresome task; however, here is a list of tips and tricks that can help you organize receipts all in one place:
Save All Receipts
Recently, while helping a client, I realized that clients face IRS agent’s inquiries regarding the receipts to support most client traveling expenses. Although, you can defend your position and raise an argue with the agent for showing receipts under $75, but why get into the hassles of unwanted dilemmas? Arguing with IRS agents can get you in deep levels of trouble and the best way to avoid is… Keep all your purchased item receipts with you in one place.
Make Notes About Business Purposes
Buying and purchasing a big product such as a fax machine or a high powered technology computing device can be remembered; however, it is extremely difficult to remember where you had dinner on the night of July 14th and what did you have at the Red Lobsters on the September 27th. It’s really difficult to keep track of such minor expenditures. But you can save yourself the hassle by keeping notes of what or how you did, whatever you did.
Scan Your Receipts
IRS agents are a real nuisance. They can walk in on you at any instance, knock on your doorstep and ask for documentation and audit up to six years. These agents can portray a real danger on your business happenings and concerns. While, the ink hasn’t yet faded from your receipts for a purchase you made years ago is your luck, else it is a whole another issue. Always try to keep a backup to present an alternative on the go! Scan and upload your receipts on an offsite location so they stay safe and you don’t have to tackle the hassles of IRS raids.
Take A Snapshot!
Your cellular phone plays a vital role in today’s world. Instead of putting yourself through the hassles of collecting your receipts and keeping them at one place, you can always go for a greater idea. Click a picture of the receipt, take a note over it and save it on your device. This great idea of assembling information in one place can make your bookkeeping role a whole lote different. Now, you get multiple applications such as Monily, which can help you store receipts in a database of an offsite location. It’s a better alternative.
Maintain a Journal
Although, maintaining a journal sounds like an overkill and an old school approach it always keeps you busy with writing something. If you have a journal at your expense, you can keep a track record of everything you are doing. This can easily help you remember when was the last time you visited the Sahara Hotel. You can easily avoid taxpayer claims as you can also attach receipts in your life diary accordingly.
It’s no secret that audits will continue to only increase and the rules will be only more strictly enforced. The best course of action for small-business owners is to be prepared with a better set of books and receipts for all of their expenses, and Monily can help you do that! Stay ahead on the “tax man” game.