One of our clients told me that she felt like she was handing over her dirty laundry when she gave me her receipts the first time we got together to talk about bookkeeping. She was worried because they weren't particularly well organised, some were missing, and some of them were dated so long ago she couldn’t remember what they were for. I wasn't fazed because I've seen it all before, and her receipts were nothing like the worst example of accounting records I've seen.
That said, if your receipts are organised, you’re going to save a lot of time and money if you're outsourcing your bookkeeping or doing it yourself. Here are my suggestions for the best way to file your receipts.
1. Record them immediately
It takes discipline, but the best way to stay on top of your receipts is to record them straight away. Receipts are often lost when you're out and about, so I suggest using your phone to take a photo of a receipt the moment you're handed one. Ideally you'll upload your receipt directly into your accounting system through an app but if you don't fancy that or that's one step too far, you could take photos on your phone and transfer them to an electronic folder weekly or monthly.
2. Use clever software
If you really have got a lot of receipts and not a lot of time or patience to organise them, you might like to look at software like Receipt Bank. It costs a bit but that small investment can be so valuable when you have a lot of transactions to quickly get on top of. Software like this works by reading data from the receipts you scan and sends the information to your accounting system. It's really quite fantastic and that’s why we provide all of our monthly bookkeeping clients with a complimentary Receipt Bank account.
3. Keep records by date
Whether you're doing your own books or paying a bookkeeper or accountant to do them for you, someone should be working through your accounts every week or month, chronologically. For this reason, I suggest keeping your receipts in date order. One method which works well for clients is to keep one folder or envelope for each calendar month, or week if you have lots of transactions. This means if you are prone to leaving your bookkeeping to a rainy day in 8 months time, at least it will be fairly easy to find the receipts that match the transactions as you work through them. There is a special joy in trying to find a specific Staples receipt when you've shopped there 40 times in the past year.
4. Don't worry about suppliers too much
I sometimes see clients filing receipts by supplier. I’d advise caution here. If your records are kept by supplier, you or your bookkeeper will be constantly opening and closing files as they work through your transactions, taking much longer than is necessary. By all means file your receipts by supplier within your month folder (i.e. Month>Supplier), but recording by supplier first and then by month can be a bit of a headache.
If you'd like to know more about how But the Books can help you with monthly bookkeeping packages, tax returns or anything else bookkeeping related, email us: firstname.lastname@example.org or call 0117 287 2807