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Do I Need to Keep Every Receipt for My Bookkeeper?

Aug 16, 2021 11:45:00 AM Kathy Dise QuickBooks, Small Business, Bookkeeping

save receiptsI’m often asked, “Do I need to keep my receipts for you, my bookkeeper, or are my bank and credit card statements saved through my financial institution enough? If I’m audited, the auditors can surely verify expenses by simply reviewing my QuickBooks or viewing bank records, right?”

The truth is, your bookkeeper doesn’t necessarily need to see your receipts but the IRS does. The IRS requires documentation that proves those transactions and amounts were tied to valid business expenses.

But who has time for that? You do, because it doesn’t take much time at all, and your bookkeeper can help. Plus that way you're prepared in case of an IRS audit.

Tips for saving receipts and documentation

By following these tips, your actions will stand up to an IRS audit and give you peace of mind.

  1. Make a habit of writing the name or purpose of your expense while at the checkout line, in the restaurant, etc.
  2. Keep receipts for cash transactions. As you know, cash transactions can cause further scrutiny. “Impossible to track” means “Impossible to cover your tracks.” Keep the receipt.
  3. Credit card statements and bank statements are only the last chapter of the story. Help yourself out by telling the story along the way on your receipts.

Still struggling to save your receipts?

It's difficult to get in to the habit of saving those receipts. If you find you're having trouble making it part of your routine, here are some easy ideas to adopt that will help.

  • Hold it, stuff it, file it…somewhere, anywhere. Just keep the receipt. I throw all of mine into a file or basket. Some clients have an envelope. You don’t need to keep them in any special order, you just need to keep them. At the end of the year, file your receipts with bank statements and other important financial information.
  • Save a picture of the receipt on your cell phone. Or, better yet, save the receipt in your calendar invite for the meeting or travel-related expense.
  • Like your paper? Keep a file in your car and make a weekly task to scan, save and upload receipts to QuickBooks. And make sure to get PDF receipts emailed to you. Then simply upload the files into QuickBooks for easier recording and saving.

Where should I keep my receipts, and in what format?

  • As hard copies in files, baskets, boxes or envelopes
  • As soft copies in a file on your computer, Dropbox account, etc.
  • As pictures saved by month or year and attached to the transaction in QuickBooks

QuickBooks Attachment Tips: Upload and Don’t Delete Them

QuickBooks Desktop: In QuickBooks, enter a credit card or check. Select the paper clip icon on the SmartVault toolbar to upload the receipt.

QuickBooks Online: Go to the gear icon at the top right, then navigate to Lists and then Attachments.  Or you can attach to each transaction using the paper clip icon at the bottom left.

Note: All files in the attachments directory are stored, scanned and locked. You can find any of your attached documents here and search them by name. QuickBooks actually makes a copy of the attachment and marks it as read-only.  

In short, yes—you need to keep your receipts. It’s not hard to do, so don’t chance it. Make keeping receipts a habit, and consider the practice an investment in growing your business. Help yourself by taking a couple extra seconds to take a few notes or make a few clicks to tell your expense story. And taking these easy extra steps will only help your bookkeeping and CPA partners better legitimize your story in your financial statements.

Need help sorting through your expenses, classifying them or determining if you are profitable? We can help!

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Kathy Dise

Written by Kathy Dise

Kathy has over 30 years experience helping small businesses succeed. As a commercial lender, commercialization expert and now as a QuickBooks diamond level advisor, Kathy understands the challenges small business owners face. Her experience helps business owners quickly accomplish their financial goals. As the owner of BudgetEase, Kathy works with clients to develop a plan to efficiently process 1,000s of small transactions so owners can make informed decisions. She lives in Shaker Heights, OH with her husband Ralph and enjoys golf, curling and walking in Cleveland’s fabulous Metro Parks.