Best Ways to Store Your Receipts and Keep Them Organized

Are you frustrated with the piles of receipts taking up your desk space? Have you ever felt stressed when you couldn’t find an important receipt? Or have you ever lost money just because you threw away your past receipts? It doesn’t have to be like this!

This article will share the best ways to store your receipts effectively, so you’ll never have to worry about them! 

Why should you store and organize your receipts?  

Do I really need to store my receipts? 

This question has probably popped up in your mind many times. You may think once a transaction is successful, there’s no reason to hang on to its receipt.  

But, the answer is yes! Here are the top three reasons why you should store your receipts and keep them organized: 

  1. To get ready for the tax season 

As a business owner, it’s in your best interest to lower your taxable income and increase your potential for a tax refund. The good news is most of your business expenses qualify as deductions with the IRS. However, the IRS will want to see receipts and other related documents to verify that your declared expenses were truly spent for business purposes. That means no receipt, no tax refund! 

See also: Understanding the IRS’s Tax Underpayment Penalty and How to Avoid It.

  1. To reimburse expenses correctly 

Often your employees have to use their own money to pay for something on behalf of your company. They then fill in an expense report to get reimbursement. How can you verify if their claims are genuine or not? Receipts can help you! They let you know exactly when and where the transaction took place. Most importantly, receipts tell you the exact amount you need to compensate. This prevents fraud and unwanted disputes in your workplace. 

  1. To stay on top of your spending 

Sticking to your budget is not an easy job. One effective way to do so is to accurately maintain records of every transaction. By doing this, you can have a clear vision of how much you have spent, what to cut out, and which expenses were not worth the money. Consequently, your overall cost and cash flow management will also become more efficient. 

Receipts are indispensable items to ensure your recordings are correct. They are solid supporting evidence for every bookkeeping entry, providing error-free financial reports and helping you stay in control of your expenses. 

See also: How To Track Business Expenses 15 Best Tips & Tools.

How do you store receipts? 

Now that you understand the importance of keeping your receipts, we will show you the best ways to store them. 

There are two common approaches to storing your receipts: traditional and digital. We will go through each method in detail, and hopefully, you will find the solution you are looking for! Let’s go! 

Storing your receipts traditionally 

Traditionally here means you want to collect and organize the paper copies of your original receipts. Here is what you may want to do: 

  1. Buy stationery organizers 

Buying stationery organizers to store your receipts is never a bad investment. File folders, storage cabinets, tab dividers, binders, sheet protectors, colored pens, etc., are all great tools to keep your paper receipts organized. 

A binder is the most suitable choice if you don’t have many receipts. Place sheet protectors in the binder, then slide the receipts into the protectors. If you have a lot of receipts to keep, get storage cabinets.

  1. Categorize your receipts 

Create a system to sort different kinds of receipts. It’s best to categorize based on the type of expense. For example, keep your utility receipts in one separate folder and office supplies in another. Inside your utility receipts folder, you can create subfolders like gas, electricity, water, etc. 

This will save you lots of time when filing taxes because your tax form breaks down the expenses section into different sub-categories, too. 

Consider adding numerical or colored codes to each receipt to classify expenses (e.g., using a prefix of 111 or using the color red to signify utility expenses). Placing the receipts in chronological order is also highly recommended! All these extra steps can quicken your process of categorizing and finding receipts.  

  1. Avoid piling up your receipts  

Schedule a convenient, regular time to sort your receipts. If you usually accumulate a large number of receipts every month, you may want to spend some time every Friday afternoon to go through your receipts. If you have a small volume of receipts, you can wait until the end of each month. 

Regardless, don’t put the task off and let your receipts pile up!

Storing your receipts digitally  

If you want to leverage technology to store your receipts, Shoeboxed is your best option. Shoeboxed stores your receipts and saves you valuable time. 

Just scan your paper receipts, and the Shoeboxed app will automatically extract all of the important data and categorize them. A team of data experts will verify your extracted data and make immediate corrections if there is an error. Your newly categorized receipt data is then available to check and search anytime, anywhere you want.  

Super easy, right? Quick, secure, and accurate; Shoeboxed definitely changes the game in how businesses store receipts. 

Final thoughts 

Storing receipts and keeping them organized is essential for business expense management. Whether you choose to use traditional or digital methods, make sure you always keep tabs on your receipts. 

And if you want to go digital and save time and hassle, click HERE to save 25% off all Shoeboxed plans for a limited time! 

What You Should Know about Operating Activities

Operating activities are the tasks and duties a business has to perform on an ongoing basis to earn an income. They are the core activities of a business and as a result, they affect the cash flow coming in and out, and determine the business’ net income. 

In today’s article, we’ll discuss the types of operating activities, what to include in operating activities, and how operating activities and the cash flow statement are related. 

What are the types of operating activities?

Operating activities are directly associated with a business’s various functions, such as manufacturing, selling, marketing, etc. Here are the types of operating activities:

Revenue-generating activities: Generating revenue is one of  the chief goals of a business; therefore, the majority of business activities are activities that produce income. There are two primary activities that bring revenue to the business: selling products and providing services.

Marketing and advertising activities: These types of activities refer to your business’ actions regarding the promotion and advertising of goods and services. For example, you could hire a graphic designer to create promotional labels or packages. Or, if you want to push the promotions of your products, you’d need to hire a digital marketer to run a new ad campaign. 

Administration activities: Administrative activities are tasks related to maintaining a business. These duties vary widely from workplace to workplace but most often include tasks such as purchasing materials, human resources, and basic accounting. 

Maintenance activities: Maintenance activities are carried out regularly in order to keep your office neat, tidy, and functional. These activities include cleaning, visual inspection, functional tests, lubrication, measurement of operating quantities, and oil tests. 

Customer service activities: Customer service is important to any business as it solidifies the relationship between you and your customers, which results in greater loyalty and more sales. Customer service activities include the support you provide via email, web, text message, and social media. 

What to include in operating activities?

Operating activities are directly associated with a business’ principal goal: to sell its products or services. Through operating activities, businesses are able to generate income and make a profit. Therefore, these activities relate to transactions that affect net income.

The operating activities that result in cash inflows are:

  • Cash receipts from sales
  • Sales of shares
  • Income earned from investment
  • Settlements of lawsuits and insurance claims
  • Collection of accounts receivable
  • Supplier refunds

The operating activities that result in cash outflows are:

  • Employee payments
  • Supplier payments
  • Tax payments
  • Refunds to customers
  • Settlements of fines and lawsuits
  • Interest to creditors
  • Equipment purchase
  • Interest payment on loans and dividends

Operating activities and the cash flow statement

The cash flows from operating activities are one of the most important elements of the cash flow statement. Cash from operating activities is the money generated from the business’ core operations. It is distinct from the cash flows derived from investing and financing activities. 

In contrast to cash from operating activities, cash from investing activities comes from sales and purchase of equipment and assets (tangible or intangible) and other capital expenditures. Cash from financing activities is the money your business gains from the procurement and repayment of short and long-term debt, issuance of equity, purchase/sale of treasury stock, payment of dividends, etc.

The cash flow can be either positive or negative. Having a positive cash flow is a good sign meaning that your business is thriving. On the other hand, having a negative cash flow might indicate that your business is facing trouble. To get an accurate picture of a company’s cash flow from operating activities, accountants add depreciation charges, losses, decreases in current assets, and increases in current liabilities to net income. 

Business managers, owners, and investors review a company’s cash flow from operating activities separately from the other two components of cash flow to see the true source of a company’s money. A positive cash flow from operating activities for a continuous period means the company is going in the right direction and thriving. This is more important than a positive cash flow from investing or financing activities, which are one-time gains from selling assets or stocks. 

Read also: What You Need to Know about Operating Cash Flow Ratio

The bottom line

Operating activities are the business’ core activities to generate income. Operating activities result in operating activities cash flow, the most important element of the cash flow statement.

If you’re interested in entrepreneurship stories, business tips, or productivity tools, find more posts like this on Shoeboxed. Shoeboxed is a cloud-based software that helps businesses turn their piles of paper receipts into digital data. With Shoeboxed, you can do many things such as scan, store and organize receipts; manage business expenses; store business cards and even track mileage for business travelers. It’s simple to install and easy to use.

What is a Bank Transaction Receipt and its Benefits for Your Business

Whenever you visit a bank and make a monetary transaction, such as a deposit or withdrawal, the bank will provide you with a bank transaction receipt. This is how banks keep an accurate and up-to-date record of all financial transactions conducted at a given location by various account holders. 

Since this financial term is used in many situations in daily life, it’s good to have a basic understanding of bank transaction receipts and how your business can benefit from them. 

What is a bank transaction receipt?

A bank transaction receipt (also known as a bank receipt) is a standard form of documentation for most financial transactions. Customers who go to banks or other financial institutions to conduct any monetary transactions should expect to receive a bank receipt for these transactions. 

Besides transactions involving deposit accounts, these receipts are also sent to customers who make loan payments, credit card payments, and conduct other similar types of transactions. Bank transaction receipts are also given to businesses that conduct financial transactions at a given bank or financial institution. 

Banks also keep their own copies of bank transaction receipts. This ensures thorough record-keeping for all financial transactions for each of their various account holders. These receipts are also a form of collateral. If a customer makes a request, the bank will have a detailed record of the transaction to refer back to. Whether a bank employee makes an error or an account holder miscalculates a portion of the transaction, bank transaction receipts make it much easier to resolve disputes. 

In the past, bank transaction receipts were paper slips. However, in recent years, many banks have begun to offer digital copies of receipts (by email,  text message, or other methods). 

Using digital receipts rather than paper receipts enables the bank to save on printing costs. Digital receipts also provide convenience for account holders as they no longer have to keep track of numerous paper receipts. 

Bank transaction receipt details

A bank transaction receipt contains detailed information about a financial transaction conducted at a particular bank. The form of the receipt may vary by bank or institution, but all bank transaction receipts must include these essential details: 

  • Bank account numbers
  • Account holder name(s)
  • Date of transaction
  • The total amount of the transaction

Sometimes a bank transaction receipt will even include detailed information such as the employee number of the bank employee who conducted your transaction. 

How to use bank transaction receipts for bookkeeping

Given the importance of bank receipts to businesses, you can make use of these documents and turn them into a helpful tool for your bookkeeping practices, either for personal or business expenses. In fact, many banks and other financial institutions recommend balancing your account books on a monthly basis and referring to your bank transaction receipts throughout the process. It’s common to go over monthly bank statements and cross-check this information with all of your bank transaction receipts that you have collected for a given month. 

Even if you hire a professional accountant to track your personal or business finances, they will request a copy of your bank transaction receipts. Bookkeepers use this information to track your income, expenses, and other financial transactions impacting your cash flow. This financial data helps keep an accurate and real-time record of your financial activities. 

Bookkeepers also use bank transaction receipts for data entry purposes to track your credit card payments, which can help you control your spending. Bank transaction receipts can even help you improve your credit score over time with good bookkeeping practices

Some people prefer to use receipt tracking mobile apps that automatically track this information in real-time instead of working with an accountant. You’ll no longer have to keep a hard copy of your bank transaction receipts by using mobile apps, as this information is readily available on your mobile device. You only need to make sure that you store these physical copies of your bank receipts before uploading them into a cloud-based system. After scanning your documents with a versatile mobile app, you can free your desk and drawers from piles of paper receipts and keep them for years!

See more: 5 Best Receipt Scanner and Organizer Apps for Small Businesses in 2021.

How to use bank transaction receipts for taxes

Bank transaction receipts can be very beneficial when preparing for tax season. To work on the tax reduction process, first, you need to collect all proof of purchases for your business expenses. Next, you need to find the right tax form and fill in all the details. The last step is to submit the form and then you’re good to go. 

Business owners can use their bank transaction receipts to balance their accounts. You can do this by reviewing the monthly bank statement and comparing the amount and transaction dates of items listed on the statement with their bank receipts. 

Typically, businesses will keep their bank receipts until the end of the year for tax preparation purposes. Individuals who claim tax deductions for certain types of expenses must also keep copies of bank transaction receipts to prove that they qualify for deductions related to banking transactions, such as interest charges or mortgages.

The bottom line

Bank transaction receipts, along with business plans, marketing strategies, and financial reports, are essential documents for all businesses. Keeping and managing these documents properly can help track your business’s financial performance, solve disputes, keep the bookkeeping up to date and even claim tax deductions with ease. A simple yet effective way to achieve this is to digitally scan and store your important documents. 

Shoeboxed is a painless receipt-scanning and organizing solution for freelancers and small business owners. After scanning your receipts with the Shoeboxed app, our OCR engine will automatically extract the most important data points and automatically categorize them by vendor, total spent, date, and payment type. After that, our staff will double-check to ensure that all of your data is human-verified, categorized, organized, fully searchable, and available on any device. Shoeboxed keeps your bank transaction receipts in a safe place with high accessibility. 

See also: How To Scan A Receipt Digitally With The Shoeboxed App.

The Shoeboxed app is available on iOS and Android. You can try Shoeboxed for free before choosing the perfect plan for your purposes!