Do you save every receipt?

[warbuff]

My wife is thinking about getting the neat desk system, but they don't have an option to import into quick books yet. For now I use a credit card (15k limit) for every single business related purchase, we build travel miles too with it. Then down load trans actions to quick books and match them up once a week, I usually spend 90mins on it Sunday nights.. I file the receipts the for week in an envelope so if I need to find something down the line I only have to sift through a weeks worth of receipts to find it. Works out pretty nice especially for material or parts returns. I have separate folders for monthly statements, insurance, 1099's, registrations, vehicle repairs, licenses, investments etc... Haven't been audited yet but my wife is an accountant so she keeps it all neat and ready to go. She audits our books every quarter so we don't get behind and have the massive nightmare we had my first year in business when she had to take a week of from work to figure it all out... Its been five years and she still give me crap about it...

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Last edited by warbuff; 03-22-2013 at 08:09 AM.

[greenscaper123]

Lawn care business tips

Originally Posted by warbuff For now I use a credit card (15k limit) for every single business related purchase, we build travel miles too with it. i've been doing the same thing actually. i guess ill just start saving everything i get. my accountant did my taxes this year and was able to go through my bank statements. anything that said it was purchased at staples, office max, cvs etc. we put into a separate category, same for repairs and equip maintenance and so on. wasn't sure if that was good enough for the IRS or not.

[warbuff]

Originally Posted by greenscaper123

i've been doing the same thing actually.

i guess ill just start saving everything i get. my accountant did my taxes this year and was able to go through my bank statements. anything that said it was purchased at staples, office max, cvs etc. we put into a separate category, same for repairs and equip maintenance and so on. wasn't sure if that was good enough for the IRS or not.

We still save our receipts but having a credit card that is business only is another tool that helps you separate out what you need quickly...

[GreenBlue]

I owned a small advertising company a few years ago, you should save every single receipt no matter what. Let me give you a little story as to why:

3 years ago a friend of mine owned a business, some receipts he saved and some he didn't. Will when it came time for his taxes some of his figures didn't add up and he fudged on his taxes because he couldn't figure out what the amounts were from receipts thrown out previously that year. Long story short, he got audited by the IRS, and since he couldn't provide a receipt for alot of transactions he ended up paying some hefty fines and the fines caused him to have to use a loan to pay which caused him to have to close his business.

Was the stupidest thing I ever heard, mainly because I told him save all of your receipts, and he'd be like it will be okay....yeah it was okay he got caught and lost his business from it. Never take any chances when you are dealing with business expenses and the IRS, because Uncle Sam will get you eventually.

[Steve]

WOW How big of fines are we talking here?

Do you feel your friend wanted out of the business anyway and this just made it easier for him to decide or was this just one big knock out?

[CDLAWNCARE]

Save them all, no matter how small they are. You dont wanna pay taxes on money you spent to run your business. They all add up at the end of the year. Another thing I learned a couple years ago after already being in business for several years is to keep track of your gallons of equipment fuel, I dont know if its the same for every state but I know the in Michigan we get back the money we spent at the pump on road tax. I have my accountant take care of that now but I think its something like .19 cents a gallon you get back, that can really add up at the end of the year.

[GreenBlue]

Originally Posted by Steve

WOW How big of fines are we talking here?

Do you feel your friend wanted out of the business anyway and this just made it easier for him to decide or was this just one big knock out?

Steve, he never told me the amount he had to pay, but I know it was a pretty big fines. I don't think he wanted to quit his business, but he was very very careless in how he ran it. I mean he'd make major purchases and tell me about them, and then he'd throw the receipts away as if it wasn't a big deal. He constantly overdrew his business account, made purchases on personal credit cards, took out payday loans to pay off bills....it was a total disaster. I tried to give him advice, but he learned the hard way because he was so stubborn.

[Steve]

These are good lessons for us all to learn and keep aware of.

[jeffcs]

this is from a system that i use

'Let’s face it, paper receipts are a hassle that quickly get shoved into a wallet, crumpled, and lost. Now that we are in the 21st century and even the IRS accepts digital copies of receipts we are left wondering why anyone gives out paper receipts any more? No matter where you are, Expensify provides the right tool for the job:"

then you don't have to keep them. take a picture of the receipt right away and off you go