Recording all your receipts and expenses can be a frustrating process if they are not systematically organised. As a tradesmen, you have more important things to worry about than admin, as you can make more money! That’s why it is important to have a process for keeping your business receipts and expenses in order.
The following are some ideas to help you organise your receipts for tax time with your bookkeeper and accountant.
The ATO requires business owners to keep records of all deductions claimed for a minimum of five years. That’s why it’s a good idea to record all the receipts for your business expenses, including keeping up to date records.
You may want to consider scanning your receipts to store them electronically. The ATO accepts electronic records as long as a reasonable person can read them. By storing your receipts electronically, it will help reduce your physical paperwork. Further, it is much easier to create a backup of electronic records. However, as it is easier to backup your data, security measures should be in place to prevent unauthorised access. This can involve having individual logins or having regular backups at all times.
Using cash, and accepting cash, from your customers creates more work when bookkeeping is concerned. Cash can go missing, unrecorded or can be intentionally taken by staff. With modern technology, we have a range of merchant payment options where you can get paid using your smartphone. This makes bookkeeping and admin much smoother for your business.
It is also recommended to use credit or debit cards when paying your expenses. If bank feeds are setup with your accounting software, this will eliminate unnecessary data entry. Similarly, you can use internet banking to pay your suppliers and this will automatically be entered into your cloud accounting file. This way both you, and your suppliers, have a track record of the payments made.
Tradies, by being systematic in your approach you can get more done throughout your day. Processing your receipts a bit at a time, every now and again, not only takes longer, it makes you less productive. This is why it is recommended to complete tasks in bulk. It is best to process all your receipts in one sitting, preferably at the same time each week. By doing this, you can get more things done as you will be more productive.
With the above in mind, you have to be consistent with your processes with keeping your books and records. If you are struggling with this, you may wish to consider outsourcing your requirements. Feel free to get in contact and we can see how we can help you.
Source: Thrive Way
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