Small business expense receipts hacks-ninja-fu! Help me overcome!
March 21, 2015 9:15 AM Subscribe
Ok so I'm a new small business owner (new solo attorney) and I am CONFUSED about expense receipts. My google searches are pulling up pages and pages of apps, but not much on what I should actually DO (and what the most efficient ninja receipt warriors do!)
What are your best practices for wrangling your business receipts, storing them, scanning/saving PDFs, entering them into your accounting program etc.?
To help you orient to where my head is at here are some of my current questions, but any tips and tricks you have on the general topic would be great. I use a Mac and Evernote, and have an ipad photo to pdf to dropbox app, and a great scanner, so I'm good on how to get a paper receipt scanned. What do I do after that?
1. How do you get a receipt from online purchases from places like Amazon and Staples? They send you an html email about the purchase, but no attachment that you can save to your harddrive. Print the email itself to PDF?
2. Do I even need receipts if I keep my business credit card statement and it says "staples", because obviously that's office supplies? Amazon, however, maybe not?
3. People talk about linking scanned receipts to the expense entry in Quickbooks (which I don't know how to do yet but sounds very ninja-like) - Useful? Unnecessary busywork?
4. What's the best practice - enter each one into Quickbooks? Keep an excel file and just enter the total into Quickbooks? I'll probably end up using quickbooks but don't have it yet, and don't know anything about how it works.
5. When scanning receipts, is there any need to name the individual scans with any particular information, or can I just scan them to one monthly or yearly bucket in case the IRS asks for them later? Scanner can name files automatically with yyyy-mm-dd-mm-ss.pdf format.
6. Do you scan the recepts AS you're typing the info into your receipt-tracking program of choice, or go back and get the info from the scans at the end of the month or year? If you get the info off AS you're scanning the receipts, how do you remember to grab the info and input from the receipts that exist only in digital format? Print the digital ones as they come and put them in the pile with the paper receipts to enter at the appropriate time?
7. What about cash expenditures without real receipts (think Craigslist furniture purchases)? Do I need to make up some sort of self-receipt so I'll remember to enter the expense?
8. What about expenses like office rent and phone bills that don't have receipts? Should I be tracking those as I go somehow, or will I pull those off my bank statements later?
If you have any especially favorite books that helped you climb the "how to do accounting" mountain, I would be very grateful!
To help you orient to where my head is at here are some of my current questions, but any tips and tricks you have on the general topic would be great. I use a Mac and Evernote, and have an ipad photo to pdf to dropbox app, and a great scanner, so I'm good on how to get a paper receipt scanned. What do I do after that?
1. How do you get a receipt from online purchases from places like Amazon and Staples? They send you an html email about the purchase, but no attachment that you can save to your harddrive. Print the email itself to PDF?
2. Do I even need receipts if I keep my business credit card statement and it says "staples", because obviously that's office supplies? Amazon, however, maybe not?
3. People talk about linking scanned receipts to the expense entry in Quickbooks (which I don't know how to do yet but sounds very ninja-like) - Useful? Unnecessary busywork?
4. What's the best practice - enter each one into Quickbooks? Keep an excel file and just enter the total into Quickbooks? I'll probably end up using quickbooks but don't have it yet, and don't know anything about how it works.
5. When scanning receipts, is there any need to name the individual scans with any particular information, or can I just scan them to one monthly or yearly bucket in case the IRS asks for them later? Scanner can name files automatically with yyyy-mm-dd-mm-ss.pdf format.
6. Do you scan the recepts AS you're typing the info into your receipt-tracking program of choice, or go back and get the info from the scans at the end of the month or year? If you get the info off AS you're scanning the receipts, how do you remember to grab the info and input from the receipts that exist only in digital format? Print the digital ones as they come and put them in the pile with the paper receipts to enter at the appropriate time?
7. What about cash expenditures without real receipts (think Craigslist furniture purchases)? Do I need to make up some sort of self-receipt so I'll remember to enter the expense?
8. What about expenses like office rent and phone bills that don't have receipts? Should I be tracking those as I go somehow, or will I pull those off my bank statements later?
If you have any especially favorite books that helped you climb the "how to do accounting" mountain, I would be very grateful!
Seconding Waves for storing the receipts! I just started using it in 2015, but its been great for keeping my paper load manageable. I'm still using a google sheet to record the information. I keep the following columns: Date, Payment Source (Visa, Mastercard, Cash, Check), Amount, Company, Purchase (I keep this brief, like pens and paper, or sheet music since I can refer back to the receipt if I need specifics), and Category (I break it down into: Travel, Meals/Entertainment, Repairs, Supplies, Home Office).
I'm a musician so some of those categories will not make as much sense for you, but Waves has about a million categories and its just not super useful information to me if its broken down that much. I also do a ton of driving, and I have a separate spread sheet to keep track of miles.
Each sheet is a single month with a final sheet that collates all the months at a glance.
posted by lownote at 9:48 AM on March 21, 2015 [1 favorite]
I'm a musician so some of those categories will not make as much sense for you, but Waves has about a million categories and its just not super useful information to me if its broken down that much. I also do a ton of driving, and I have a separate spread sheet to keep track of miles.
Each sheet is a single month with a final sheet that collates all the months at a glance.
posted by lownote at 9:48 AM on March 21, 2015 [1 favorite]
Oh, I forgot, I'll do my accounting most sunday mornings after breakfast. It keeps my mind at ease from trying to do it every time I have a new entry.
posted by lownote at 9:49 AM on March 21, 2015
posted by lownote at 9:49 AM on March 21, 2015
I recommend do it as it happens, touch it once and it's done.
As a busy lawyer you are not going to have time to set aside spare time to organize receipts.
posted by prk60091 at 10:04 AM on March 21, 2015
As a busy lawyer you are not going to have time to set aside spare time to organize receipts.
posted by prk60091 at 10:04 AM on March 21, 2015
Which version of QuickBooks are you using? If it's the old QuickBooks for Mac you won't find any apps that connect to it (they never made an API or SDK). If it's QuickBooks Online or the new QuickBooks Mac App (which is basically QBO in a lightweight desktop app....yes this is confusing!) you might be in luck because they have Intuit App Center and you might find a 3rd party app to help with this.
posted by radioamy at 10:39 AM on March 21, 2015
posted by radioamy at 10:39 AM on March 21, 2015
Whatever methods you end up using, get in the habit of tracking and filing your expenses and doing your billing weekly or bi-weekly at the most. Seriously, the longer you wait the longer it will take and the more painful it will be.
posted by koahiatamadl at 10:57 AM on March 21, 2015 [1 favorite]
posted by koahiatamadl at 10:57 AM on March 21, 2015 [1 favorite]
If you are a solo attorney, Quickbooks might be overkill. You could start out with Quicken Home and Business if you choose to be taxed as a sole proprietor. I would not recommend the complication of an S-corp starting out until you see how big your business becomes in a year or two.
As for receipts, you can waste a lot of time scanning if that's your preference, but for a small business you are unlikely to have hundreds or thousands, so it is much easier to just have a manilla folder for each year and tuck the receipts in the folder. If you are meticulous about your taxes, the odds of an audit are very low and you will never look at those receipts ever. Why waste time computerizing them? After three years you can throw them away.
If you have electronic receipts, put them in computer folder for each year. For paper receipts, put them in a manilla folder for each year. Enter each expense into Quicken as your incur it. Quicken will automatically download credit card expenses. When you do your taxes, you can quickly get an expense summary from Quicken.
One thing that auditors are very picky about is auto expenses. If you are deducting business mileage, make sure you keep records of each trip.
posted by JackFlash at 11:31 AM on March 21, 2015
As for receipts, you can waste a lot of time scanning if that's your preference, but for a small business you are unlikely to have hundreds or thousands, so it is much easier to just have a manilla folder for each year and tuck the receipts in the folder. If you are meticulous about your taxes, the odds of an audit are very low and you will never look at those receipts ever. Why waste time computerizing them? After three years you can throw them away.
If you have electronic receipts, put them in computer folder for each year. For paper receipts, put them in a manilla folder for each year. Enter each expense into Quicken as your incur it. Quicken will automatically download credit card expenses. When you do your taxes, you can quickly get an expense summary from Quicken.
One thing that auditors are very picky about is auto expenses. If you are deducting business mileage, make sure you keep records of each trip.
posted by JackFlash at 11:31 AM on March 21, 2015
Response by poster: Thanks everybody, this is good so far. Especially the votes for "NOT Quickbooks!" :D
JackFlash, the reason I want to scan is that this February when I picked up the receipt for my iPad from a year ago, the ink had totally faded. Conmpletely gone. Couldn't read it at all. Things that are on real paper I don't mind just chucking in a folder though.
posted by bluesky78987 at 2:19 PM on March 21, 2015
JackFlash, the reason I want to scan is that this February when I picked up the receipt for my iPad from a year ago, the ink had totally faded. Conmpletely gone. Couldn't read it at all. Things that are on real paper I don't mind just chucking in a folder though.
posted by bluesky78987 at 2:19 PM on March 21, 2015
Voting for quickbooks online.
It had a massive design overhaul about a year ago making it reallly much more user friendly not the old beast. And you're going to need invoicing anyway. It can pull all your transactions from an account which you can the pretty easily classify. Get a card like a chase ink or starwoods Amex and put all your expenses on that to get points for other things then just link the account to quickbooks to slurp in all the transactions then you just have to classify all the expenses. Then file the receipts in whatever way you want. They're only used at that point if you are audited.
Oh and on Craigslist purchases get a hand written receipt. They're legit.
posted by bitdamaged at 10:10 PM on March 21, 2015
It had a massive design overhaul about a year ago making it reallly much more user friendly not the old beast. And you're going to need invoicing anyway. It can pull all your transactions from an account which you can the pretty easily classify. Get a card like a chase ink or starwoods Amex and put all your expenses on that to get points for other things then just link the account to quickbooks to slurp in all the transactions then you just have to classify all the expenses. Then file the receipts in whatever way you want. They're only used at that point if you are audited.
Oh and on Craigslist purchases get a hand written receipt. They're legit.
posted by bitdamaged at 10:10 PM on March 21, 2015
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posted by DarlingBri at 9:33 AM on March 21, 2015 [1 favorite]