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Itemized receipt example for small businesses

today we will talk about how to organize receipts for a small business let's have a look at the details if you own a small business you likely know that you can deduct most of the expenses you incur running your business however you also need to keep receipts and other documentation of those expenses in case the tax department audits your tax returns or asks for additional information about deductions you've claimed organizing receipts and keeping track of expenses can be a hassle but if you have a convenient and accessible system in place you can make sure you have everything in place to maximize your deductions come tax time the first method is developing a filing system choose a convenient file storage system it's easier to develop a habit of filing receipts immediately if your file storage is easily accessible for most small businesses a basic filing cabinet will suffice organize your receipts by category when you do your taxes you'll have to Total your deductions under specific categories if you file your receipts in these categories you'll have already done this work keep your receipts in chronological order while this isn't specifically necessary it can help you estimate your taxes when you file quarterly taxes it can also help you more easily locate a specific expense schedule a specific time to file your receipts use the system that works best for you and that you can keep up with the second method is documenting expenses note the business purpose of each expense on the receipt keeping in mind that you're going to be keeping receipts for six years something that seems obvious a week after you incur the expense might not be something you remember several years later separate business and personal expenses on the same receipt if you have personal expenses on the same receipt as business expenses underline or highlight the business expenses and calculate a new total for tax purposes match receipt transactions with financial statement entries when you get your business banking and credit card statements each month print them out and compare them to your receipts and the third method is going paperless scan all receipts before you file them even if you're keeping paper files most receipts are printed on thermal paper which degrades over time keep your image files organized and labeled by category and date mimic your paper filing system with your digital filing system creating folders for each category typically your computer or electronic device will save the files chronologically by default use a receipt organizing app on your smartphone there are several smartphone apps that can help small business owners keep track of deductible expenses and organize receipts upload scanned images to a Cloud Server while you may be keeping your scanned images on your computer or smartphone you also want to make sure those files are backed up keep in mind that you have to keep those files for six years ask vendors to email you receipts whenever possible many vendors are willing to email you receipts instead of giving you a physical receipt email receipts are preferable for record keeping since they don't degrade the way physical receipts on thermal paper do thanks for watching this video please don't forget to like And subscribe to our Channel if you like our videos [Music]