Keep all your receipts in a safe place

It has never ceased to amaze me how
many small business owners are so laid back with regards to keeping
hold of their business documents and records. This includes receipts
and invoices for all business transactions, whether you compile your
own businesses bookkeeping or you use the services of an accountant
or bookkeeper not keeping all your records and keeping them in a
legible manner leads to all sorts of problems.




It seems to be the recurring problem of
people working so hard in their business that they don’t spend the
effort to work on their business.

If you don’t have a receipt you cannot
claim the expense against your business profits because you can never
prove that the purchase was bought in connection with the trade of
the business and, therefore, an allowable expense. This will
inevitable increase your tax liability.

In addition if you use the services of
a bookkeeper or accountant to prepare your businesses books and
records they will inevitably charge you by the hour for work carried
out and if they are searching for documents, telephoning you and
looking for discrepancies this will only add to their fee, so keeping
all your invoices and receipts is such a valuable time and cost
saving for your business. I can’t understand why people would work
hard doing the work in their business and waste money by being so
laid back and negligent with such a simple but important part of your
business. It also distracts you from working in your business if you
are having to answer the telephone to provide information and
documents that you should have provided in the first instance, if you
are doing your own bookkeeping you will soon realise how much easier
it is if you pay this small amount of extra attention to your
documentation.

When you keep your receipts and
invoices I always advise you mark each one stating how it was paid
and indeed if the purchase was on account with the supplier and not
paid for yet this should be recorded, do this at the time of getting
the receipt or invoice because it’s fresh in your mind and so easy to
do. Also, keep them in chronological order and in a readable
condition. I have lost count the amount of blank pieces of paper
(obviously till receipts) that I have been given because they were on
a vehicle dashboard and they have faded so badly they are totally
unreadable.

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