This tax season may have been an eye opener, if you are looking to make some changes to the way you are preparing for your taxes here are some tips to ensure its not so hard next time around
Say yes to receipts
Credit and debit statements only tell part of the story. Receipts are proof that the items you purchased are related to your business. For example, your credit card statement may show that you spent $500 at Costco but without out a receipt we don’t know if that $500 was spent on groceries or office supplies. Make a habit of accepting receipts wherever you go and decide later whether or not you actually need all of them. It can be extremely difficult and most times impossible to get a duplicate receipt after the initial day of your purchase.
Keep notes on receipts
Keep all of your notes about your purchase on the back of your receipts so that the information stays together and you’re not scrambling to find it or remember it later.
Store your receipts
The ink on receipts tends to fade. A great way to ensure that your receipts are kept safe is to scan them into your computer. This is totally acceptable for the CRA to use and it’s easy for you to keep them on hand for the next 6 years in case of an audit.
Use technology to your advantage
Take advantage of that one thing you carry around everywhere you go- your phone! If the idea of keeping receipts in your wallet is unappealing, take a picture of your receipts. There are also a ton of great apps on the market for the sole purpose of storing receipt information.
The power of the calendar
As mentioned in some of our earlier posts a calendar is a great way to create a business journal. By utilizing your calendar you are essentially keeping a record of your business related activities. This will come in handy if you’re ever looking back at your records or being audited, your calendar, receipts and statements help tell a story.
Say no to cash
Cash is the worst method of payment. Your transaction is essentially non existent when making a cash purchase because there is no way to reconcile your purchase. Cash is bookkeeping’s worst nightmare. So try your very best to stay away fro using cash for business expenses.
We hope this helps you out with your receipt keeping! Happy tax season!