It’s the beginning of the month and the perfect time to organize last month’s receipts. It’s a good idea to spend a few hours each month keeping your finances organized, saving you the headache of scrambling for tax time. There is no one-solution -fits-all for how to do this, it all depends on how many receipts you have each month, how you keep track of them and if you do it yourself or not.
Regardless of your size and volume, here are some of my tips for how to make this a painless monthly task:
1. Schedule the time – if it’s not in your calendar, it doesn’t exist, right? So block a recurring 1-2 hours per month and commit to the task. It can be at any time of the month, so don’t feel pressured to do it on the 1st.
2. Find all your receipts – if they are in your inbox, designate a folder to transfer those emails to. If you’re savvy enough you can set inbox rules to automatically transfer them, otherwise click and drag. If they are physical receipts, empty your wallet/pockets/purse. Drop Box is a great place to keep all those soft copies and can be shared with your Bookkeeper. Name the files something understandable so that you can easily find them again (ie 2018-04-30-Staples-Office-Supplies).
3. Input your receipts – how you do this depends on what platform you use. Accounting software like QuickBooks will connect to your bank account, making it easy to match your expenses. Snapping a pic of hardcopy receipts through an app is an easy way to attach those receipts (and can easily be done in front of the tv, without without wine). If you are handing off to a bookkeeper, talk to them about the best way to get that information.
4. Reconcile your accounts – this isn’t as scary as it seems. It’s a good idea to go through your banking and credit card statements once a month to make sure you’ve captured all those expenses (even if your accounts are hooked up to your accounting system…sometimes not everything is picked up).
5. Filing – by this point your soft copy receipts are nicely organized, but find a safe place to store your hardcopy receipts. This might be an accordion file or hanging folder in your filing cabinet.
If you want an even easier monthly process, consider apps like Receipt Bank or Hubdoc. They come at a cost, but by automatically reading your bills and receipts and inputting them into your accounting system (QuickBooks, Freshbooks, Xero, etc.), most of the work is done for you.
By spending a small amount of time each month, not only will you actually know how much you are making, you will be preparing yourself for a smooth year-end.