We’ve all heard the horror stories: its tax time, and frazzled business owners arrive at the office of their bookkeeper at the last minute with shoeboxes full of receipts that need to be collected and entered for the annual tax return. Of course you should keep all of your business receipts.
- You’ll need them for tax purposes, and according to the IRS for the U.S. tax rules, you should hold on to your receipts for seven years.
- If your business has employees who have reimbursable expenses, they will need to keep records of their expenses, and you as the business owner will need those records to substantiate the reimbursements.
- You will, at some time or another, have to return or exchange equipment or supplies that you have purchased. You’ll need those receipts.
- If you run your business out of your home, it is especially important that you document all of your expenses in order to ensure that your home office deductions are correct for the percentage of your home used exclusively for your business activities.
- If you or your business makes charitable donations, either physical or in-kind, you will need to be able to document the fair market value of those donations.
- You really want to keep your bookkeeper happy, and nothing makes your bookkeeper happier than for you to have organized records.
If you find yourself drowning in paper and you are wondering whatever happened to the paperless office we were promised decades ago, there are solutions today to bring your closer to that goal.
First, get all of those receipts and cheque stubs out of the shoeboxes and file cabinets. It’s time to really digitize your paperwork; it’s time to move into the cloud. The first task is to select a simple, yet comprehensive online document management software application to upload all of that paper. You can start with LedgerDocs with a totally free trial see how to make your office paperless with a secure document management system especially designed for bookkeepers, accountants, and businesses.
Next, within the LedgerDocs software, create folders and subfolders that match those dog-eared hanging files in that big metal file cabinet in the corner of your office. You can customise your online filing system for the exact needs of your business.
Finally, start uploading your receipts, invoices, bills, cheque stubs, and all supporting documents. You will be able to find everything you need with LedgerDocs search and browse function. You and your employees and contractors will even be able to snap a picture of a receipt right at the moment of the transaction and email it to LedgerDocs. How easy is that? If you hurry, you can still get all of your receipts and documents uploaded in time to share securely with your accountant before tax time!