5 steps to great record keeping
July’s finally here and it’s a time when you often find yourself asking this question: Where are all my receipts hiding?
It’s too late for me to give any advice because if you haven’t kept track of them, you’re just going to find me annoying.
By this time, you’re probably wondering whether you need to start ransacking your home, car and office to find all the missing receipts.
This year, I’d like you to start a new resolution. Firstly, concentrate on gathering all the records of the last financial year. Remember to review your emails as many suppliers now send bills electronically. Create a folder for them.
By completing your September, December and March BAS, these records are three-quarters of your year. If you have them in hand, then the information you need to find is only for the last quarter, which is from April to June. Now, doesn’t that feel less stressful?
Regular record keeping
These tips help you keep a record of all your business transactions easily.
1. Gather all your receipts and bills
- Empty your desk drawers
- Search your wallet for cash receipts
- Search folders for paid bills
- Review your emails
- Review your quarterly BAS statements
2. Start sorting
- You may like to group them together in the type of expenses they are: Advertising, Motor Vehicle expenses, Insurance, Legal, Office, Travel etc.
- You can also file them in the order they were paid, by a monthly or quarterly basis
- A good filing system will help you distinguish between paid and unpaid bills. According to the ATO, you can keep your records on paper or digitally
3. Pick a system and stick with it
- For paper records, store your folders in a safe place
- If you’re trying to go paperless, scan every bill and receipt. Store them by year, and then by alphabetical order
4. Make sure your records contain enough information.
- Tax invoices should contain all the required information by the ATO
- Cross-reference your records
- When you pay bills, write the invoice number on the cheque butt & the cheque number on the invoice
- When you pay electronically, add notes that will remind you later of how and when it was paid
- Add notes for special circumstances. For example, if you bought ink cartridges off the internet and paid with a personal account, you don’t want to forget that business expense
- Make sure your records can be understood by anyone. This is an ATO requirement
5. Use accounting software
Are you using accounting software for your business? Do you record your transactions regularly? Take advantage of modern accounting software. With MYOB Essentials, the majority of your receipts can be entered directly and securely into the software when you link your bank account.
You don’t need to be an accountant to get MYOB Essentials up and running. There is no software to install or update as it is browser based. It is super easy to set up and start keeping track of your business.
Ask for help before things get out of control. Talk to a bookkeeper. They can help with data entry, sorting your records, and setting you on the right track. The key to success lies in committing to a system that makes record keeping more like a daily habit than a chore.
So, let’s talk again next year. Hopefully, you will be able to tell me how successful you have been at keeping track of your receipts.