Do Online Businesses Have to Keep Receipts?
We’ve all been to a restaurant and seen those stacks of daily sales receipts stabbed through the center with a nail (or is that only a thing in the greasy spoons of North Carolina?). Or maybe you’ve seen a business manager on tv in a tiny, stuffy office surrounded by piles of paper receipts, easily seeing their frustration as they thumb through them and have to “make sense” of them.
Then you started your online business and realized that’s just not your reality. As an online business you have very few, if any, physical receipts.
You may have even forgotten that keeping receipts is a thing you’re supposed to do as a business owner! And what was that business manager actually doing with those receipts? Is there something you’re supposed to be doing and are clueless about?
Receipts are needed for bookkeeping - truth or myth?
What if I told you receipts are rarely needed for bookkeeping. Would you be surprised?
Back in the day when cash was used most of the time and checks occasionally, credit cards had to be manually copied with a heavy slab of metal, and debit cards weren’t really a thing, yeah, receipts were super important for bookkeeping!
You had to make sure you were capturing every sales receipt for the day and every expense because these might not ever show up on a bank statement.
Today, luckily, this isn’t the case. Most of your sales and expenses happen online and this puts you at an advantage because receipts for you are rarely going to be used for bookkeeping, unless you forget what you bought at Target…
🤔 “Was this $24.53 office supplies or my desk lamp?”
So do I need to organize my receipts somehow or can I just keep forgetting they exist?
I wish I could say, “Poopah, forget about them all!”…but I can’t.
You do need to organize your receipts in case you are ever audited.
In this case, receipts will serve as backup to your bookkeeping records to prove you spent that money on what you said you did.
This is especially needed when spending money in a place where you could be buying something personally and just categorizing it as a business expense, like: Ikea, Target, Walmart, airline travel, Uber or Lyft, meals with clients, etc.
But how do I keep them and organize when I have a mix of physical and online receipts?
The good news is you don’t have to keep physical receipts! Simply snap a picture and now you have a digital image of the receipt that is just as good as the real thing in the IRS’ eyes.
You’ve got a couple of options for organizing these digital receipts and images now.
Google Folder or Other Cloud Storage
This is my personal favorite because it’s very neat and easy to find what you’re looking for, but very easy.
Create a folder called ‘Receipts’. Inside that folder create another folder for the current or previous years if you’re organizing old receipts. Then inside this folder you can either dump them all if you don’t care about organizing further, or you can create folders for each month and dump all receipts for each month in their respective folder.
Receipt Organizing Software
If you have a lot of receipts to keep and organize, you might want to consider an automated receipt organizing software like Hubdoc. You can connect online vendor accounts as well as your bank accounts to automatically pull receipts and bank statements.
You can also drag and drop images of receipts into the software and email receipts to the email address given.
The software will “read” and organize your receipts by vendor, date, or amount. This makes it very helpful when searching for a receipt, but this may be overkill if you only have a few receipts each month.
Email Folder
Save all emailed receipts that come to you in an email folder labeled ‘Receipts.’
Any physical or downloaded receipts can be sent to yourself via email and also moved to the receipt folder.
This is my least favorite option as it’s very disorganized, but it is also very quick to implement and fairly low maintenance.
Notice shoebox full of receipts did not make it on my list because this is a terrible idea! Receipt paper is notorious for degrading after a few years and may be unreadable if you’re ever audited.
Take action!
Decide on a receipt organizing system that fits your style best. Then put it into action! 📂 Set up your system and start sorting so your receipts are easily accessible if you ever need them in the future!
