Ignoring Receipts? Why It Could Cost You Big Time!

Receipts…

Love ’em or hate ’em, they’re a big deal when running a successful business. But let’s be real—keeping track of those little slips of paper can feel like trying to catch confetti in a windstorm.

Sound familiar?

OR, maybe you’ve experienced this wonderful sense of panic: you’re wrapping up the year, looking over your business expenses, getting ready for tax time, and suddenly, it hits you—half the receipts you need are missing!

Let’s meet two small business owners who feel your pain:

First, there’s Maggie, who runs a thriving coffee shop, always on the go, meeting suppliers and testing new coffee blends. She’s diligent about paying for everything on her business card but rarely keeps receipts, and when she does, she has a bad habit of tossing them into random drawers.

When tax season rolls around, she’s frantically tearing through her office, hunting for proof of her expenses. The few receipts she does find are faded and unusable, leaving her with possible deductions she can’t take and definitely deductions she can’t support in the event of an audit.

Then we have Sam, who owns a local landscaping business. Sam drives from one client’s property to another all day, racking up gas expenses. Instead of receipts, Sam figures his bank statements will suffice during tax season. Spoiler alert: they won’t (more on this below)!

Without receipts, Sam can’t prove his business expenses for tax deductions. So now, instead of focusing on growing his business, he spends valuable hours hunting down duplicates—or worse, accepting that he’ll miss out on valuable deductions. And if he does take the deductions without proof, there are those possible fines in case of an IRS audit.

Now Maggie and Sam are stressed out, wishing they had a magic wand to organize it all. But hey, there’s a better way! Let’s dive in.

But…What’s the Big Whup? Do Receipts Really Matter?

Receipts are your golden tickets for tax deductions. They prove your expenses are legit, which keeps Uncle Sam happy. But here’s the kicker: if you don’t have them, you’re not just risking lost deductions—you could also face penalties if audited.

And don’t think you’re safe because you’ve never been audited. Audits are like a surprise pop quiz—nobody expects them, but you’ve got to be ready. Without receipts, it’s like showing up to the quiz without a pencil (and we all know that kid in school who wasn’t prepared – unless it was you, and then we’re talking about a different kid LOL).

“But I’ve got my bank statements—can’t I just use those?” It’s a common question! Unfortunately, the IRS says no-go. Bank statements only show the transaction amount and where it happened, not what you bought. Without proper documentation, you’re walking a tightrope when it comes to tax deductions. The risk? Audits, fines, or paying more taxes than necessary. No thanks.

The solution is simpler than you might think.

The Stress-Free Way to Handle Receipts

Here’s the good news: you don’t need to drown in paper piles or cram your glovebox with faded receipts. Ever heard, “There’s an app for that?”

I know, I know—please, not another app! But stick with me. A digital receipt tracking system can turn this overwhelming task into a seamless, no-fuss process. Think of it as your business’s personal assistant, quietly filing and organizing while you focus on what you do best.

Here’s a simple 3-step system to save your sanity:

1. Snap a Photo 📸
   Right after you make a purchase, snap a quick pic of the receipt. If it’s for a meal or entertainment, jot down a note on the receipt about who was there and the business purpose, then snap the pic. The IRS requires those little details.
2. Store It Safely 🗂️
   File the photo in a cloud-based app or folder. Many apps let you organize receipts by category or year, making them easy to find later. Once the receipt is safely stored, feel free to toss (or shred) the original. No more faded ink or crumpled paper clutter!
3. Access with Ease 🖥️
   When tax season comes around, your receipts are already sorted and waiting. No last-minute scrambling, no headaches—just a smooth process that saves you money.

Doesn’t that sound like a game-changer?

Need Some Receipt Management Recommendations?

Ready to ditch the stress? Here are some tools to help make tracking receipts a breeze (we make zero commission off the links below):

• Google Drive: Free, easy to use, and accessible from anywhere. Snap and upload receipts from your phone, then organize them in folders. While it’s not receipt-specific, there’s a good chance you already use this app for other storage.
• OneDrive: Another free option for Microsoft fans. Simple, secure, and perfect for keeping everything in one place.
• HubDoc: A paid app that does the heavy lifting for you. It automatically imports and categorizes receipts and integrates with QuickBooks Online if you’re using it. This is a really robust app and is usually a good fit for larger businesses.
• Veryfi: Specific for receipts and business documents. There is a free option for smaller businesses.
• Shoeboxed: this is a paid solution, but they send you envelopes, and you mail them your receipts to handle the digitizing.

Not into apps? No problem. Keep an envelope or folder handy in your car, office, or desk to collect receipts. Just remember, going digital saves time and protects you from issues like ink fading or lost papers.

Think those small expenses don’t matter? Think again. Let’s say you spend $50 a month on office supplies, $30 on coffee meetings, and $100 on gas for business trips. That’s $2,160 a year in potential deductions!

Without receipts, that’s money potentially left on the table. Don’t let it slip away. 💸

Let’s Make Your Life Easier!

Don’t let receipts be your arch-nemesis. With the right system, managing them can be as easy as snapping a selfie. If you’re overwhelmed, we’ve got your back.

At Abundant Life Bookkeeping, we specialize in helping small business owners like you create systems that work. Whether you need advice or hands-on help, we’re here to make your life easier.

👉 Let us help you keep more of your hard-earned money. Contact us today to help you get things in order so you can focus on what you do best—growing your business! 😉

Amanda Wylie – Certified QuickBooks Online ProAdvisor

Owner/CEO

I love the Lord and live way out in the country with my wonderful husband and my 8 children still at home. Besides everything bookkeeping, my passions and interests include gardening, chickens, herbal remedies, coffee and learning new things!

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